US investor Blackstone has started 2020 in an acquisitive mood, and two looming deals in London show just how big it is aiming.
The firm is in talks to boost its London offices portfolio by more than £1bn, with talks to buy the 1.5m sq ft One and Two Southbank Place, SE1, from Almacantar, and 452,878 sq ft The Cabot in Canary Wharf, E14, from Hines for about £380m.
If the deals close, they will follow the recent completion of Blackstone’s £4.7bn purchase of student housing business IQ – the largest ever private real estate transaction in the UK.
This will boost its property assets under management, which hit a record $163.2bn during the fourth quarter, up 20% over the course of 2019.
The acquisitions in the final quarter of the year included the £500m takeover of UK warehouse firm Hansteen, the $18.7bn purchase of a last-mile US logistics portfolio from Singapore-based logistics provider GLP, and a $4.3bn operator of Las Vegas leisure properties, MGM Resorts.
In its full year earnings for 2019 Blackstone said it still had $45.7bn of ‘dry powder’ in its real estate division.
Blackstone also reported that inflows into its real estate division hit $34.2bn over the course of 2019, while it deployed $22.5bn during the year. Realisations stood at $18bn in the fourth quarter.
More than $16bn of the inflow was into the firm’s opportunistic property funds, while nearly $12bn went into its core-plus funds.
Blackstone currently owns four offices in London from a portfolio of 13 it bought between 2011 and 2015.
It has recently put one of those four, St Katherines Dock, up for sale with a price tag of £500m.
The other three are Broadgate Quarter, EC2M, Times Square, EC4, and 25 North Colonnade, E14, which the firm is currently refurbishing.
Almacantar initially put One and Two Southbank Place, home to oil giant Shell and a 280,000 sq ft WeWork, on the market last May for around £875m.
Completed in 2018, the two office buildings form the commercial element of a wider 1.5m sq ft redevelopment on the 5.5-acre site around the Shell Centre, which is being delivered by Braeburn Estates, a joint venture between Canary Wharf and Qatari Diar.
The scheme, which consisted of refurbishing the building formerly known as the Shell Centre and the new-build Two Southbank Place to provide 572,616 sq ft of office space, was delivered on behalf of Almacantar by Canary Wharf and Qatari Diar.
Almacantar acquired the site from Braeburn Estates for more than £550m in August 2015, using a loan facility from Cain International.
In February last year, Almacantar agreed a £420m debt refinancing for the properties with LGIM Real Assets.
To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette
