Blackstone passes $3b mark on Asia real estate fund
The Blackstone Group has received more than $3 billion in capital commitments for its first Asia real estate fund, which is targeting $4 billion.
A regulatory filing shows that Blackstone Real Estate Partners Asia (BREP Asia) has attracted $3.025 million in capital from 44 investors so far. The fund launched in April 2013 and reached a first close at $1.5 billion in June.
According to an investor document from March 2013, the fund's initial size was $3.5 billion.
The vehicle will follow an opportunistic strategy, primarily focusing on assets in mainland China, India, Australia, and Japan. Singapore, Hong Kong, South Korea, Vietnam, and Thailand are also part of the remit, and the GP moved Alan Miyasaki, Blackstone's senior managing director for real estate, to its new Singapore office in October.
The fund will target investments with expected returns of 20% gross IRR and 2x gross multiple of invested equity, and offers co-investment opportunities.
The Teachers Retirement System of Texas has committed $100 million to the fund, joining the LP base alongside The New Jersey Division of Investment, which will commit $500 million.
While this is Blackstone's first regional fund, in 2010 it assumed responsibility for $2 billion worth of regional property assets when it replaced Bank of America Merrill Lynch as the GP for the Merrill Lynch Asian Real Estate Opportunity Fund.
Blackstone deployed $1.46 billion in equity across 15 transactions in Asia between 2010 and 2013, and these investments are projected to achieve a 15% net IRR and a 1.8x net multiple, according to the New Jersey pension fund.
In 2013 alone, it invested nearly $1 billion in equity. Deals included 40% of Chinese shopping mall developer and operator SCP for $400 million, real estate developer Tysan Holdings for approximately $322.5 million, and the Greensborough Plaza retail mall in Melbourne for $321 million. It also owns one of India's largest portfolios of office space.
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