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Blackstone pays $770m for Dexus Property assets

  • Susannah Birkwood
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The Blackstone Group has paid $770 million for 65 US industrial assets owned by Australia’s Dexus Property Group. Investing via affiliates of Blackstone Real Estate Partners VII, the firm will acquire properties including three warehouses leased to Whirlpool Corp.

Dexus boosted occupancies in its central US properties by 12.8% in the second half of 2011 in a bid to attract higher offers. The sale price is in line with the net book value projected for the company for June 2012.

"This sale is consistent with Dexus's current strategy to exit non-core U.S. markets," said Dexus CEO Darren Steinberg.

Dexus plans to use part of the excess capital arising from the deal to carry out a securities buyback of up to $200 million. According to the current trading price, this will equate to around 5% of issued equity. "A buyback represents a sensible use of surplus capital while Dexus securities trade at a discount to their underlying value," added Steinberg.

The purchase adds to the more than 45 million square feet of industrial real estate that Blackstone's Chicago-based entity IndCor Properties already holds.

Last year, the investor acquired Melbourne-based Centro Properties Group's 588 shopping mall assets in the US. At $9.4 billion, it was considered the largest global private equity transaction since the onset of the financial crisis in 2007.

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