The Blackstone Group looks set to become the biggest foreign investor in Irish property after hinting that the majority of a newly-raised $5.5bn [£3.3bn] European fund could be targeted at Ireland.
The war chest, officially called the Blackstone Real Estate Partners (BREP) Europe IV, already has commitments worth €4.1bn [£3.3bn] but is yet to close, implying the final size of the fund could be even larger. It is already €1bn [£821m] bigger than the previous record for a European property fund, which closed in 2009.
A spokesman for New York-based Blackstone — which is already the biggest private equity group in the world — declined to comment on his company’s plans, but industry sources are clear that Blackstone, like many commercial property investors, see Ireland as 2014’s prime target.
“Clearly it will depend on what becomes available, but Blackstone specialises in distressed assets, whether they have been over leveraged or over financed,” explained the spokesman. “Ireland has arguably the largest amount of good quality property in a distressed position in the world, so it’s only natural that a company like ours will look to be involved.”
Under the guidance of Stephen Schwarzman, Blackstone played 2013 more as a watcher, making few acquisitions. But earlier this month it spent around €100m [£82m] on three offices, known as the Platinum Portfolio, and placed on the market by the National Asset Management Agency.
Now agents and analysts are even more convinced that 2014 will see Blackstone dominate the Irish property market. One agent admitted: “We were surprised that it moved on the Platinum Portfolio properties, but that deal was a signal that Blackstone is moving in in a big way. It would certainly be foolish to think that those offices will be the only deal it does here in 2014.”
While the group is not believed to be in negotiations over specific assets at the moment, Blackstone has a track record of investing in a wide range of properties from hotels and offices to apartment blocks. It has also earned itself a reputation as one of the world’s savviest investors — clinching deals only when the price is right.
Among the assets thought to be on Blackstone’s radar are the Irish Bank Resolution Corporation loan portfolios, Project Rock and Project Stone. The first is made up largely of loans secured against commercial real estate and commercial loans. Project Stone consists of European commercial real estate loans that were handed out by IBRC. Recently the special liquidators for IBRC pulled the contract for managing the bank’s remaining loans after it emerged that the amount that would not be sold off would be much smaller than had been estimated originally.
Earlier this month Blackstone lost out to Ireland’s newly-formed Green REIT which was named as Nama’s preferred bidder for Dublin’s Central Park development. On the market for €250m [£205m], Green is thought to have offered more than €310 [£254m] for the Central Park asset.
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