PRIVATE equity firm Blackstone Group has struck a deal to buy nearly 600 US shopping malls and other properties from Australia’s Centro Property Group for about $9.4bn, according to sources with direct knowledge of the transaction.
Blackstone beat rival bidders that include Morgan Stanley Real Estate, which had teamed up with Starwood Capital Group, and New York-based NRDC, said the source.
The portfolio includes 560 US shopping centres, whose tenants include grocery store operators such as Kroger, Safeway, and Koninklijke Ahold, which owns Stop & Shop and Giant.
It is the latest addition to Blackstone’s rapidly expanding property empire, which includes the Hilton hotels chain. A sale would allow Centro to reduce its debt load.
Centro shares were halted ahead of an expected announcement today.
A Centro spokeswoman declined to comment, while Blackstone wasnot immediately available.
The $9.4bn purchase price equals book value for the assets, according to the source.
Centro was one of corporate Australia’s first casualties of the global credit crisis, having saddled itself with too much debt.
The company said last week that its total portfolio was valued at A$16.5bn (£10.3bn), while it has A$16bn in debt.
Asset sales would need approval from Centro’s lenders, mainly hedge and distressed debt funds.
Blackstone is unusual among private equity firms in having a large number of real estate investments. It oversaw $33.2bn of real estate assets at year-end, up 63 per cent from a year earlier, according to a Friday regulatory filing.
City A.M. Reporter