Blackstone to buy stake in Taubman’s Asia retail assets for $480m

US real estate investment trust Taubman Centers is selling a 50 per cent stake in three shopping centres in China and Korea to funds managed by private equity giant Blackstone Group in a $480-million transaction.

Net cash proceeds to Taubman are expected to be about $315 million, after transaction costs and the allocation to Blackstone of its share of third-party debt. The transactions are expected to close this year.

Blackstone will be making the investment through its Core+ real estate investment unit, which targets substantially stabilised office, logistics, residential and retail assets in Asian geographies and global gateway cities. It also targets to have longer hold periods.

Upon completion of the transaction, Taubman will be responsible for the joint management of the three shopping centres. It will also retain a 17.15 per cent stake in South Korea-based Starfield Hanam, 25 per cent in CityOn.Xi’an and 24.5 per cent in CityOn.Zhengzhou. Both the China properties are mixed-use developments.

Starfield Hanam produced total sales in excess of $825 million in 2018, per a statement. Collectively, sales across the three shopping centres were up by double digits in 2018.

Robert S. Taubman, chairman, president and CEO of the real estate investor, said the sale was consistent with Taubman’s history of recycling capital for growth.

“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,” said Chris Heady, chairman of Asia Pacific and head of real estate Asia at Blackstone.

Taubman manages a portfolio of 26 regional, super-regional and outlet shopping centres in the US and Asia, and one under development. Its Asia business was established in 2005 and is headquartered in Hong Kong.

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