Blackstone has called off the sale of its multi-billion-dollar retail portfolio in Australia, and will now reposition some of the assets to improve their appeal to investors.
As reported by IPE Real Estate earlier this year, the portfolio of shopping centres was the biggest to be put on the market in the country and had been expected to fetch up to AUD3.5bn (€2.35bn).
Some shopping centre specialists told IPE Real Estate the asking price was “too ambitious” and it is understood that the portfolio has received lukewarm interest from global investors – including large Australian listed groups that would have been potential partners for offshore buyers without local management platforms.
Blackstone did not explain why it withdrew the assets from sale, nor has it publicly commented on its decision.
However, parties involved with the marketing of the 10 shopping centres have told media that Blackstone has decided to retain the assets, which will be managed by 151 Property Group, Blackstone’s Australian subsidiary.
Industry sources told IPE Real Estate that, while Blackstone has done a “good job” repositioning some of the assets, others require more work to attract good prices. Blackstone is understood to have decided to allocate capital expenditure and work on the less attractive assets.
There has been interest in individual assets. The Blackstone portfolio includes Top Ryde City in Sydney, Blackstone’s first retail acquisition. Fund managers that have assessed the asset say it is the best in the portfolio.
A number of fund managers have noted the difficulty in moving large portfolios in Australia, despite heightened interest among global investors for real estate assets in the country. Another notable example of a large portfolio yet to be sold is the AUD2bn Campus Living Village portfolio.
