Blackstone to buy Shanghai office tower
The Blackstone Group has reportedly agreed to purchase Shanghai’s Huamin Imperial Building, an office tower valued at approximately RMB7 billion ($1.12 billion).
A source cited by Reuters confirmed the building as the 50,000-square-metre office tower after Blackstone's CEO and co-founder, Stephen Schwarzman, revealed on Friday that the firm had bought a building in Shanghai.
"It's a situation that became available as a result of some of the pressure among real estate developers that's occurring in China," said Schwarzman.
A grade-A office and 5-star hotel complex located in Shanghai's Jing'an district, the Huamin Imperial is 95% complete. Its new private equity owner plans to finish the construction and lease it out.
In China, Blackstone hasn't made any investments outside the property sector since the beginning of last year. In 2011, the investor sold its first property in the country, exiting a 95% stake in Shanghai's Channel 1 shopping mall to Hong Kong-based real estate group New World Development for RMB1.46 billion ($229 million).
Schwarzman predicts that Blackstone, whose latest real estate fund comes in at more than $13 billion, will become one of the largest buyers of commercial real estate in Australia and India, and said that the firm believes the slowdown in growth in China has reached its lowest point.
"We feel good about having been selective and disciplined in that time period," said Michael Chae, Blackstone's Hong Kong-based head of international private equity, of the firm's recent China activity.
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