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Blackstone acquires PAG's 50% stake in Sydney building for A$420M

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Blackstone acquires PAG's 50% stake in Sydney building for A$420M

Blackstone Group LP spent A$420 million on the acquisition of a half-stake in the grade-A tower at 60 Margaret St. in Sydney from Hong Kong investment management firm PAG Investment Management, The Australian Financial Review reported.

The U.S. private equity firm was reported to be conducting due diligence for the deal involving the over A$800 million office building in October. An affiliate of Blackstone Real Estate Asia executed the trade, the publication said.

As the owner of the remaining 50% interest in the property, local diversified real estate investment trust Mirvac Group did not exercise its pre-emptive right on the sold half-share. The REIT instead issued a A$63 million junior debt funding to Blackstone at a commercial interest rate. Mirvac will additionally extend investment and property management services as part of the deal.

PAG paid superannuation fund MTAA Super over A$300 million for 50% of the building in 2015. Separately, Mirvac's half-stake is valued in the books at A$280.6 million, while the two-level retail MetCentre at the base of the 36-level office tower is noted to be worth A$80.8 million.

ING is among the tenants at the office portion of the 39,560-square-meter tower and center, according to the paper, which added that MetCentre is home to a Woolworths Group Ltd. supermarket and 80 shops.

Mirvac once resided at the premises before relocating to the EY building it developed at 200 George St. Savills oversaw the sale to Blackstone, the Dec. 19 report added.