Blackstone Disposes of Significant Investment in Sydney

Blackstone Real Estate Partners VI, through its portfolio company, Valad, has agreed to sell its first major property investment in Australia.
Gold Fields House in Sydney

Blackstone Real Estate Partners VI, through its portfolio company, Valad, has agreed to sell its first major property investment in Australia, namely the iconic Gold Fields House in Sydney’s central business district.

Chinese real estate giant Dalian Wanda Group is buying the 1960s-era office building at Circular Quay for approximately A$415 million (or $327 million), with plans to redevelop the harbourside property into a five-star hotel, luxury residential and retail.

“We look forward to creating a new Sydney landmark,” the company said. Backed by Chinese billionaire Wan Jianlin, Wanda Group is planning to invest about $1 billion into the mixed-use development, the FinanceAsia reported.

The transaction, negotiated through CBRE and JLL, is expected to close in March 2015.

Blackstone took control of the asset in 2011, with the acquisition of the Valad portfolio. The U.S. private equity firm has successfully repositioned the building and obtained planning approvals for its conversion into a residential property.

“Gold Fields House is one of the most significant investments acquired in the Valad portfolio and is a great example of Valad’s capability to reposition assets to achieve their full potential,” Chris Heady, Blackstone’s Head of Real Estate Asia, said in a prepared statement.  “Blackstone has built a diverse real estate portfolio in Australia of over A$3.5bn [about $2.7bn] of assets and we are committed to pursuing acquisitions and disposals that benefit our investors and joint venture partners.”

Founded in 1991, Blackstone’s real estate business currently has more than $80 billion in investor capital under management. The company’s holdings include Hilton Worldwide, Invitation Homes (single-family homes), Logicor (pan-European logistics), SCP (Chinese shopping malls), as well as prime office buildings in the world’s major cities.