Private equity giant Blackstone edged lower from second to third place in our 2012 ranking of top investors compared to the previous year, but remained one of the players watched keenly by the market.
Private equity giant Blackstone edged lower from second to third place in our 2012 ranking of top investors compared to the previous year, but remained one of the players watched keenly by the market.
PropertyEU Research recorded just over €2 bn of direct investment transactions by Blackstone in European commercial property last year, down from €2.3 bn in 2011.
Distress was one of Blackstone's key targets last year, although the lot sizes weren’t necessarily always big. During the fourth quarter Blackstone paid €67 mln for the four-star Burlington Hotel in Dublin, thereby acquiring the top Irish hotel at a 77% discount to what it last traded for in 2007. Ireland would not be on everybody’s list of target markets, but Blackstone’s deal was one of the strongest indications yet that prices may have fallen sufficiently there to make the market attractive.
Ken Caplan, head of European real estate at Blackstone, said at the time: ‘This acquisition, and the additional €16 mln investment that we have planned for the hotel’s refurbishment, demonstrates our strong confidence in Ireland’s economic recovery...We hope to find additional investment opportunities here as well.’
The opportunistic player also found fertile hunting ground in London. In November it was reported to have exchanged contracts to buy the Adelphi office building on London's Embankment from Dubai’s Istithmar for €321 mln. The sale was triggered by a maturing loan.
Many opportunistic funds have found it difficult to source the high-return deals they need. Thanks to its good sources of debt financing, Blackstone can even look at core-type assets.
Michael Rhydderch of Cushman & Wakefield says the firm will be a ‘very big player’ again this year. ‘Their view at the moment is: if they can underwrite at 12% cash-on-cash, what’s not to like?’ Lone Star and Cerberus, two other major-league private equity firms from the US, made their presence felt in Germany. Lone Star relieved the German government of a mixed-bag portfolio inherited from the reunification with East Germany for over €1 bn, while Cerberus scored a distressed residential portfolio.
A full round-up with rankings of the top investors of 2012 is published in the January/February edition of PropertyEU Magazine.
Click on the link below for full acces to Premium Content
