Blackstone completes DB real estate deal

The US firm’s real estate group has agreed to pay $1.2bn to acquire a 51-site real estate portfolio in a sale and lease-back agreement with Deutsche Bank.

Blackstone Real Estate Partners, the real estate division of The Blackstone Group, has reached agreement on a deal to acquire a portfolio of European properties from Deutsche Bank for a total consideration of $1.2bn (E1.04bn).


The majority of the portfolio, spanning 51 office buildings, is located in Germany with further sites in eight European countries including Austria, Belgium, Italy, Luxembourg, the Netherlands, Portugal, Spain and Switzerland. Most of the assets are currently occupied by Deutsche Bank and will be leased back by it on a medium- to long-term basis, Blackstone said in a statement.


“This transaction adds to Blackstone’s track record of being an active acquirer of high-quality office buildings and other commercial properties throughout Europe,” said Chad Pike, a London-based senior managing director and head of Blackstone’s real estate operations in Europe. “It also demonstrates our success in working with major German corporations to assist them in optimising their long-term real estate strategies.”


Blackstone is investing from its Blackstone Real Estate Partners International Fund, which closed on E800m in 2002. Blackstone’s real estate group, with offices in New York and London, has raised five funds with a combined value of $5.6bn. The group has made more than 100 separate investments in hotels, offices and other commercial properties with a total transaction value of about $16bn.


The firm already owns chains such as the Savoy Group of luxury hotels in London, which has been put up for sale, and the Nikko hotel in Dusseldorf, Germany, which it acquired earlier this year.


Earlier this year, Blackstone announced that it had agreed a deal to acquire the Marriott Grosvenor Square Hotel in London’s West End from a private Japanese investor. Financial terms for the acquisition were not disclosed.


The sale by Deutsche is part of an ongoing strategy to dispose of non-core assets. To date this year, this policy has already seen the bank sell the bulk of its later stage private equity portfolio to MidOcean Partners for E1.5bn.


“This transaction is a further milestone for Deutsche Bank in its strategy of focusing on core businesses and optimising the use of available capital,” said Axel Wieandt, global head of corporate investments and corporate development. “We are exploring further opportunities to reduce the remaining real estate portfolio.”