Blackstone Buys Sydney Office Towers for $1B
The transaction price represents almost $800 million in additional value created.
Blackstone has made a slightly more than $1 billion investment in Sydney, Australia’s CBD market with its acquisition of two towers from Scentre Group, a regional real estate investor that owns shopping centres in Australia and New Zealand. Funds managed by Blackstone paid A$1.52 billion (US$1.06 billion) for the properties at 100 Market St. and at 77 and 85 Castlereagh St.
The towers were developed by Scentre and delivered in 2011. The transaction price represents almost $800 million in additional value created and has generated an unlevered internal rate of return of over 16% per year for the company, according to Scentre Group CEO Peter Allen.
As part of the deal, Blackstone has secured a 299-year leasehold interest in these properties.
Scentre will also begin a $800 million securities buy-back.
“Together with the recent joint venturing of Westfield Burwood, Scentre Group has now released $2.1 billion of capital to further pursue our strategic objectives, creating long-term value for securityholders,” Allen said in prepared remarks.