Blackstone buying shopping centre stake

By Nikki De Guzman: Blackstone Group recently announced it will buy a majority stake in 40 US shopping centres valued at US$1.1 billion, as it expands into grocery-anchored retail property.

Considered the largest real estate private-equity firm in the US, it will pay an estimated US$274 million in cash and about US$463 million in debt for a two-thirds stake in the properties spread across the metropolitan areas of New York, Washington D.C., San Francisco and San Diego. Selling the stake is UBS Wealth Management North American Property Fund.

Real estate investment trust Kimco Realty, the joint venture partner of UBS, will boost its stake to 33 percent from 18 percent. Kimco will pay approximately US$61 million in cash and undertake an additional US$104 million of the project's debt.

In 2011, Blackstone bought the US shopping centres of Australia's Centro Properties Group for US$9 billion and rebranded the company as Brixmor Property Group. Last year, Blackstone and Beachwood formed a partnership to buy 46 US malls for US$1.43 billion from a unit of Tel Aviv-based Elbit Imaging.

This latest deal was put together by Kimco and the UBS fund between 2005 to 2007. David Henry, Kimco's President and Chief Executive Officer, said the malls are "very high quality assets".

"We are happy to continue our role as the operating partner and should continue to be paid for that," he added.

Kimco owns stakes in 896 shopping centres globally. Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg Related Stories: Hilton expands in India

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