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Blackstone pays $9.4b for Centro's US assets

  • Anita Davis
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In what is classified as Blackstone’s largest deal since the onset of the financial crisis, the buyout firm has bested two rivals to acquire distressed Australian shopping mall owner Centro Properties Group’s 588 real estate assets in the US, paying $9.4 billion for the properties.

The news comes weeks after Blackstone appeared on Centro's bidder shortlist, along with a team comprised of Morgan Stanley Real Estate and Starwood Capital Group, and US-based NRDC Equity. According to global reports, this is Blackstone's biggest deal since acquiring the Hilton Hotel Corp. franchise in July 2007, for $9 billion.

The multi-billion-dollar sale to Blackstone goes far to alleviate Melbourne-based Centro's debt. Reports note that Centro recently revealed that its entire portfolio, including its 112 shopping mall properties in Australia and New Zealand, totaled A$16.5 billion ($16.8 billion), but is saddled with A$16 billion ($16.3 billion) in debt. That figure is largely attributed to Centro's acquisition of these American properties two years ago, for which it paid $27 billion. Factors such as America's depressed economy, which resulted in slowed spending, have contributed to Centro's inability to regain revenue.

 

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