Blackstone buys into China shopping mall developer
The Blackstone Group and ICBC International will acquire stakes of 40% and 6% respectively in Chinese shopping mall developer and operator SCP. The financial terms were not disclosed but Blackstone’s investment is reported to be worth $400 million.
SCP has been a shopping mall investor, developer and operator for over a decade. It has developed over 60 projects in that time and currently owns and manages 19 shopping malls under three brands - Incity, SCP Plaza and One City.
Its projects span cities across the Pearl River Delta, Yangzi River Delta and Bohai Economic Rim. Post the transaction, the company will have a total asset value in excess of $2billion.
"With China's economy increasingly driven by domestic consumption, the retail sector has tremendous potential," Chris Heady, Blackstone's senior managing director and head of real estate in Asia, said in a statement.
"Retail sales have grown on average by 16% per annum over the past 10 years. We look forward to working with SCP's first class management team to make SCP the leading retail platform in China through both organic growth and new acquisitions."
The investment is from Blackstone Real Estate Partners Asia fund, which also made a deal to buy real estate developer Tysan Holdings for approximately HK$2.5 billion ($322.5 million) in August. The fund launched in April with a $4 billion target and reached a first close of $1.5 billion in June.
Assets in Blackstone's real estate business rose to $69 billion from $64 billion at the end of the second quarter. It has deployed $3.05 billion in Asian real estate.
SCP has previously partnered with a number of financial institutions, including The Carlyle Group, Simon Property Group, CapitaLand Group, Morgan Stanley, Alliance Group and Harvest Capital Partners.
In May Carlyle acquired a 49% stake in two shopping malls in Suzhou and Hangzhou owned and operated by SCP as part of a strategic partnership. Both properties, Suzhou In-City Mall and Hangzhou Gudun In-City Mall, are located in tier-two cities and have foreign brands such as Wal-Mart, Sephora and Starbucks as tenants.
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