Blackstone raises $15.8B for its new global real estate fund

The world's largest alternative investments asset manager Blackstone has hit final close of its latest global real estate fund—Blackstone Real Estate Partners VIII (BREP VIII)—where it has raised $15.8 billion, the company said on Thursday.

It currently manages two regional opportunistic real estate funds—the $8.2 billion Blackstone Real Estate Partners Europe IV and the $5 billion Blackstone Real Estate Partners Asia.

Jon Gray, global head of real estate, Blackstone, said, “The size of this fund gives us the ability to commit capital in scale with speed and certainty.”

Kathleen McCarthy, global chief operating officer, real estate group, Blackstone, said, “The fund is already 20 per cent committed and we continue to see compelling opportunities to deploy capital.”

Its initial investments have gone towards acquiring significant real estate assets from General Electric Capital Corporation and Strategic Hotels, a publicly traded real estate investment trust.

The company said a substantial portion of the money has come from investors that had previously participated in Blackstone’s previous realty funds. These investors are both from the US and around the world, it said.

In India, Blackstone has been particularly active in acquiring commercial assets through large scale transactions. It has grown to be one of the top owners of office space in India over the years.

As first reported by VCCircle, the company is in talks with North-based Alpha G:CorpCorp for a mega deal which may result in a complete buyout of the developer. Recently, it completed its long-pending deal to acquire Mumbai commercial asset 247 Park from Milestone Capital and Hindustan Construction Company.

Prior to that, it lapped up two IT Parks from IDFC Alternatives in Pune and Noida for Rs 1,100 crore.

Industry watchers expect the firm to pool in its assets in India and eventually list them under real estate investment trust (REIT) but how that pans out is something to watch out for.

Another global investor which has ramped up its activity in Indian real estate market is Singapore's sovereign wealth fund GIC. With back-to-back deals across residential and commercial segments, it has emerged as the king of deals in Indian real estate market of late.