Blackstone to buy GE’s real estate business in Japan for $1.6 bn

US private equity firm Blackstone Group yesterday struck a deal to buy General Electric Co's (GE) residential real estate business in Japan for over ¥190 billion ($1.6 billion).

Blackstone will acquire GE Capital Real Estate's 200 residential properties, with more than 10,000 rental units, primarily in the major cities of Tokyo, Osaka, Nagoya and Fukuoka.

The transaction is the largest property deal this year in Japan, topping Singapore's sovereign wealth fund GIC's ¥170 billion acquisition of the 32-story Pacific Century Place Marunouchi office building in Tokyo's business district and Tokyo Tatemono's ¥184.5 billion deal to sell a building in Nakano to four buyers.

A falling the yen over the past two years has made Japan more attractive to international investors, who are moving beyond office and retail spaces in central Tokyo as prices keep rising.

''We continue to believe strongly in the residential sector's fundamentals, especially in Japan's major cities,'' said Alan Miyasaki, senior managing director at Blackstone. ''We are excited by the opportunity to invest in such a high-quality and well managed business.''

Francois Trausch, CEO – Asia-Pacific at GE Capital Real Estate, said, ''This transaction supports our global strategy to reduce our equity book as we continue to build our global debt operations. We are pleased that our Japan residential business will transfer to another premier owner/operator with a strong emphasis on tenant satisfaction.''

GE Capital Real Estate is a leading commercial real estate company, with global assets of $36 billion. GE Capital Real Estate Asia Pacific has a $5.1 billion assets portfolio and serves clients' equity investments, including direct acquisitions of single assets or portfolios, joint venture equity partnership financing, and asset management.

Blackstone's real estate business was founded in 1991 and has more than $80 billion in investor capital under management.

Its real estate portfolio includes hotels, offices as well as retail, industrial and residential properties in the US, Europe, Asia and Latin America.

Its major holdings include Hilton Worldwide, Invitation Homes, Logicor (pan-European logistics), SCP (Chinese shopping malls), and some other prime office buildings in the world's major cities.