Blackstone buys stakes in three Asia malls from Taubman in $480m deal

Blackstone funds have agreed a $480m (€425.5m) deal to buy 50% of Taubman Centers’ interests in three Asia-based shopping centers.

Blackstone will be making this investment through its Asia core-plus real estate investment arm which targets stabilised office, logistics, residential and retail assets.

Taubman said following the sale, it will hold a 17.15% stake in Starfield Hanam in South Korea, and in China, it will retain a 25% stake in CityOn.Xi’an and a 24.5% stake in CityOn.Zhengzhou.

The interests being sold are valued at $480m. Net cash proceeds to Taubman are expected to be about $315mn, after transaction costs and the allocation to Blackstone of its share of third-party debt.

Taubman said it will remain the partner responsible for the joint management of the three shopping centres.

Robert S Taubman, chairman, president and CEO of Taubman, said: “It’s consistent with Taubman’s history of recycling capital for growth, once value is created from development projects.

“We think Blackstone will be a valuable strategic partner that can help us grow our platform in Asia.”

Chris Heady, the chairman of Asia Pacific and head of real estate Asia at Blackstone, said: “We’re excited to partner with a best-in-class developer and operator in Taubman and add these high-quality assets to Blackstone Property Partners’ recently launched core plus real estate investment unit in Asia.

“In partnership with Wangfujing in China and Shinsegae in South Korea, Taubman has built an impressive platform of three world-class and dominant shopping centres and we look forward to working closely together in the future.”

Simon J Leopold, an executive vice president and CFO at Taubman, said: “This transaction not only confirms the success of our platform in Asia, it increases our liquidity and strengthens our balance sheet in an earnings-accretive manner.”