TOKYO/HONG KONG (Reuters) – U.S. private equity fund Blackstone Group is raising $10 billion for one of the biggest ever global property funds, sources familiar with the matter said on Thursday.
The move comes in the wake of reports first aired in November, and confirmed by sources on Thursday, that Wall Street bank Morgan Stanley is separately raising an $8 billion global property fund.
The huge funds are being marshaled at a time when global private equity players are stepping up their exposure to hot property markets such as India and China, and financing giant real estate deals in mature markets.
“Blackstone has already raised about 80 percent of its $10 billion fund,” one of the property industry sources said.
Both Morgan Stanley and Blackstone declined to comment.
In November, Blackstone had nearly fully invested a $5.25 billion property fund — its fifth such fund — just five months after its closure to investors.
The Equity Office deal is the latest move in a push by Blackstone into North American property.
In March 2006, Blackstone agreed to buy commercial real estate investment trust CarrAmerica Realty Corp. for $5.6 billion and along with Brookfield Properties agreed to buy Trizec Properties and its Canadian arm for $8.9 billion. Both deals used cash from Blackstone's fifth real estate fund.
Morgan Stanley's new fund would be almost double the $4.2 billion it raised for a global property fund at the beginning of last year.
Morgan Stanley has taken stakes in three property developers in India in the last year, having made a name in the Asian market with deals for distressed assets in Japan and China. In Europe, the bank's property fund teamed up with Germany's DIC Asset AG in December to buy 51 properties for 147 million euros ($191.5 million) in Berlin.
Source : Reuters