Blackstone pushes real estate activity

Having added a prime asset to its London hotel portfolio, the US private equity group is in talks with Deutsche Bank over the purchase of a E1bn portfolio of 50 Deutsche offices in Europe.

Blackstone Group, the US private equity firm, is close to reaching agreement with Deutsche Bank over the purchase of the German bank’s European property portfolio.

 

The portfolio, valued at around E1bn, comprises 50 Deutsche Bank offices in Branches across Europe, with more than two thirds of the properties located in Germany, according to the Financial Times.

 

The move is part of an ongoing strategy at Deutsche for the bank to dispose of its 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.

 

Under the terms of the agreement, the bank would continue to occupy most of the properties on long leases, the FT reported, while the rest will be occupied on shorter leases with Deutsche Bank likely to vacate the premises when the leases expire.

 

Deutsche Bank is expected to confirm the sale within the next few weeks.

 

Blackstone is investing from its Blackstone Real Estate Partners International Fund, which closed on E800m in 2002. Blackstone’s Real Estate Group has raised four funds representing approximately $4bn in total equity. The firm already owns chains such as the Savoy Group of luxury hotels in London and the Nikko hotel in Dusseldorf, Germany, which it acquired earlier this year.

 

Yesterday, 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, although Blackstone said the 221-room luxury hotel will undergo a £4.5m modernisation and refurbishment program.