Blackstone marks first close of Asia real estate fund at $5b; breaks earlier record

Photo: Bloomberg

Global investment giant Blackstone Group LP has reportedly hit the first close of its Asia-focused real estate fund at over $5 billion, surpassing its initial targets.

Earlier this year, the US-based private equity firm had floated Blackstone Real Estate Partners Asia II with a target of $5 billion, and a hard cap of $7 billion, according to a PERE report.

Blackstone had already eclipsed the previous Asia fundraising record with this new fund of $5.08 billion.

Its second region-specific realty fund  was floated after its first Asia-focused property fund that had successfully raised $5.08 billion in 2014, majority of which has already been deployed.

Through the second fund, the firm now intends to beef up investments in warehouses and shopping malls in China, India, Southeast Asia and Australia. With its first fund, Blackstone had invested in a Japanese residential property, Chinese shopping malls and Australia office space. Even in India, Blackstone is one of the leading office space holders.

In April this year, Illinois Municipal Retirement Fund (IMRF) said that its Board of Trustees approved a $100 million investment in Blackstone Real Estate Partners Asia II, LP. Other investors in the fund include South Dakota Investment Council and the Texas Permanent School Fund.

Asia has emerged as one of the most attractive destinations for real estate investors, that are now increasingly launching funds targeted specifically at the region. Morgan Stanley Real Estate Investing is learnt to have raised a $650 million vehicle for making real estate investments in Asia while Savills Investment Management was also reportedly launching a billion dollar fund this year.

Asian real estate sector is seen as a market that would generate better returns investments amidst the current global economic outlook, when compared to the developed world.

In April, Blackstone had revealed it has $32.2 billion of “dry powder” to invest in global real estate, which amounted to roughly one-third of the $94.3 billion available to the private equity firm to invest across all asset classes. Its assets under management in real estate currently stand at over $104 billion.

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