Blackstone Partners on $1.2B Investment Platform for M-U Portfolio in Singapore
- Dec 17, 2014
Blackstone’s Tactical Opportunities Fund has committed to making a notable investment in Singapore. The fund has entered into a partnership with City Developments Ltd. and CIMB Bank Berhad, Labuan Offshore Branch, to develop an investment platform that will invest in the Quayside Collection, CDL’s über-upscale mixed-use development in Sentosa Cove, Singapore. With this arrangement, the partners will raise S$1.5 billion, or nearly $1.2 billion.
The investment instrument, or Profit Participating Security, has a total value of approximately $574.4 million, and Blackstone’s Tac Opps will invest $281.4 million of that sum. Concurrent with the investments, DBS Bank Ltd. and Oversea-Chinese Banking Corporation Ltd. will supply $574.4 million in value of senior loan facilities.
For the investors, the PPS will provide a fixed payout based on an annual 5 percent interest for five years, as well as a participation in the Quayside Collection’s cashflows–and the cashflow is notable.
The Quayside Collection consists of the 240-room W Singapore – Sentosa Cove, the 228-unit Residences at W Singapore and the Quayside Isle, a marina-fronting retail and dining destination. W Singapore boasts high occupancy levels and strong RevPAR; The Residences at W has seen more than 50 percent of its units claimed just months after its leasing program went into high gear in the second quarter. And there’s no reason to think that the good times will end anytime soon.
“At Quayside Collection in Sentosa, CDL has created a distinctive portfolio of assets. We are delighted to partner with them in this transaction and further cement our long-term commitment to Singapore,” Stephen Schwarzman, chairman & CEO of Blackstone, noted in a prepared statement.
Indeed, Blackstone is keen on Singapore; the gargantuan alternative investment manager opened an office in the city-state last year to further capitalize on opportunities in Southeast Asia. According to Bloomberg, more than half of Blackstone’s $5 billion of assets in Asia consists of real estate.