Blackstone Group LP is conducting due diligence to acquire PAG Investment Management's half-stake in the over A$800 million office building at 60 Margaret St. in Sydney, The Australian Financial Review's Street Talk blog reported.

PAG, which bought the 50% stake in the property in 2015 for more than A$300 million, co-owns the building with Mirvac Group. The co-ownership gives the listed property developer a preemptive right on its partner's interest, which was taken to the market in June.

According to the Oct. 9 report, the listed property developer is believed to be responsible for the U.S. private equity giant's due diligence on the Hong Kong investment manager's stake in the building that provides 39,560 square meters of office space on top of the 6,418-square-meter Metcentre retail space at the base of the property.

Mirvac's remaining interest in the office asset was valued at A$280.6 million, while its stake in the bottom retail property was estimated at A$80.8 million, the publication added.