CIC joins Blackstone in RBS commercial real estate deal

RBS will hold the remainder of the equity "for the time being," Dow Jones Financial News reported, citing a person familiar with the situation. The deal is expected to close in the next month.

Many banks are looking to offload non-core assets in anticipation of tighter regulation on capital requirements and commitments to alternative asset classes such as real estate, hedge funds and private equity. Private equity firms and sovereign wealth funds are among the interested buyers.

However, a number of banks have retained stakes in these assets following sales to institutional investors. Santander Consumer USA, which provides car financing, agreed to sell a 25% stake to Warburg Pincus, KKR and Centerbridge Partners. RBS also retained a minority interest in luxury boat maker Fairline Group following its sale to Better Capital, while Banco Espirito Santo is expected to retain a holding in a number of the loan portfolios it has put up for sale.

CIC's interest in real estate assets - like many sovereign wealth funds - is already well-established. In 2009, it took a 19.9% stake in Goodman Group, having committed A$500 million ($460 million) to an A$1.8 billion bailout package for the troubled Australian industrial property trust. CIC and Qatar Investment Authority also took over Songbird Estate, the majority owner of London's iconic Canary Wharf, after paying off GBP880 million ($1.5 billion) in loans.

Since then, CIC has been linked to numerous real estate assets. It made investments of $1 billion each into funds managed by New York-headquartered Brookfield Asset Management and Cornerstone Real Estate Advisers, and was reportedly closing in on real estate fund holdings owned by Harvard University's endowment. It was also said to be targeting Morgan Stanley's Japanese real estate assets, again in conjunction with Blackstone.

CIC's 2010 report shows that exposure to alternative investments - such as private equity, hedge funds, real estate and infrastructure - increased sharply to 21% from 6% in 2009.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Real estate
• Greater China
• Real estate
• China
• CIC
• The Blackstone Group
• Real estate