Blackstone Inc. defaulted on a 531 million ($562 million) bond backed by a portfolio of Finnish offices and stores as rising interest rates hit European property values. https://www.wsj.com/articles/blackstone-property-fund-targeting-small-investors-passes-50-billion-11642510801. The real sting for tenants would come further down the line: Once the moratorium expired, tenants would find themselves on the hook for all of the rent in arrears. Harbour Exchange, located in the Docklands area, comprises two redeveloped office buildings, housing datacentre and office space, and was let to Equinix (UK) Ltd with an unexpired lease term of nearly 20 years. But with debt mounting, a sale was seen as preferable. Adam Dakin, managing director for new business and services at Telereal, denied that The Arch Co. was planning to drive up revenue solely by raising rents, pointing out that 900 of the arches were vacant at the point of sale, mostly due to poor condition, and were ripe for redevelopment. +44 (0) 20 3757 6890 Luxembourg: Blackstone European Property Income Fund Associates LP : Cayman Islands: Blackstone European Property Income Fund Associates Ltd. Cayman Islands: UKs Land Securities Group Plc said on Friday that it has agreed to sell Harbour Exchange, a London office property, to Blackstone Inc for 196.5 million pounds ($262.82 million) as the commercial landlord reshuffles its portfolio. The court of the adjudicating officer, or AO, issued the warrant on February 7 after hearing the complaints of the allottee, HRERA said in a official statement. We have various options to advertise with us including Events, Advertorials, Banners, Mailers, Webinars etc. All Rights Reserved. This is not as expensive as you may think, Ibrahim says. Shares of the private-equity firm fell 1.6% after news of the default was first reported by Bloomberg. tuition and home schooling, secondary and senior secondary level, i.e. The future for many of these tenants is unclear. 2023 proptech predictions | End of 'period of exuberance'? Knight Frank advised Blackstone. Angus Johnston, U.K. leader of real estate at PwC, says the relationship between landlord and tenants is irrevocably changed. Youre going to have a more symbiotic partnership between landlords and tenants, he says. In December 2020, one year after it took on the portfolio, The Arch Co. said its churn rate, or the number of businesses leaving, was 7 percent, down from 11 percent under Network Rail, while 150 arches had been brought back into use. Because in todays backdrop, where rates are so low, where a traditional 60-40 portfolio just isnt generating enough return in both appreciation of the underlying assets and also income, investors and advisers are realizing that to generate the income and return on a risk-adjusted basis, [you need alternatives], Todd Myers, senior managing director and chief operating officer of Blackstone Private Wealth Solutions, told Citywire. Last week, Landsec said it had bought a 75% stake in MediaCity, the UK's biggest tech and media hub outside London, for $580 million, just two days after it announced the purchase of Meanwhile, the LGIM U.K. Property Fund, which has over 2 billion in assets, offered investors a 7.96 percent return in the 12 months through June 30. In a note to investors sent on May 22, 2020, LGIM said its 2 billion U.K. property fund had collected just 76 percent of the rent owed by the end of March. Seppala says Blackstones size gives it access to vast amounts of data, allowing it to pursue bigger margins within its portfolios: The scale of the portfolio we manage gives us access to large amounts of proprietary data and real-time information, which is incredibly helpful in informing and guiding our investment strategies.. This file may have been moved or deleted. Blackstone's $71 billion unlisted real estate income trust (BREIT), which also defaulted, has run into trouble. London W1U 4DA Entrepreneurs like Dean are happy. When I called in June, she said journalists were calling every day to hear about the scheme. The $71bn Blackstone Real Estate Income Trust has become a barometer of the health of the commercial property market and a driver of asset and fee growth at Property values are dropping in Europe as rising interest rates put off buyers until a clearer picture about how far rates will rise emerges. As part of the project, LGIM Real Assets is giving ten businesses a shop on Kingland, where Dean opened her plant shop, with no rent or business rates for the first two years. We would suggest, as would most CIO offices, by having almost all assets in a daily liquidity structure, you give up return and income, Myers said. Read more: Pimco, Brookfield Office Defaults Signal Deepening Property Pain. Ive worked out how many plants I have to sell a week to break even., Giving away store space was not a decision LGIM took lightly. S&P Report (Nov-2022) Rating Agency Reports. Blackstone describes the arches as a unique portfolio within its real-estate division. WebThe Blackstone Group International Partners LLP (BGIP) is a limited liability partnership registered in England and Wales under number OC352581 and is authorised and Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. In 2018, Blackstone acquired Sponda.Despite the acquisition, Sponda operated as an independent company within the Blackstone portfolio, with its operations and management remaining largely unchanged. Blackstone Inc has defaulted on a 531 million euro ($562.5 million) bond backed by a portfolio of offices and stores owned by Finnish company Sponda Oy, Bloomberg News reported, as rising interest rates hit European property values. Bondholders voted against a further extension, the people said, asking not to be identified as the sales process was not public. Where once an investor thought it owned a lease with a reliable income, comparable to a bond income,it now owns a relationship with the underlying market in other words, a tenant. (Reporting by Jaiveer Shekhawat and Mehnaz Yasmin in Bengaluru; Editing by Anil D'Silva, Shinjini Ganguli and Josie Kao), Ukrainian pilot pair in Arizona to fly military simulators - US official, Another Norfolk Southern train derails in Ohio; company says no toxins aboard, UPDATE 1-China sets economic growth target of around 5% as parliament opens, China to develop more energy and mineral reserves and boost production, China Sets Modest Growth Target as Economic Risks Persist. Blackstone's $71 billion unlisted real estate income trust (BREIT) has also been in hot water. Right away, its purchase of commercial real estate in railway arches marked a departure from the funds usual buy it, fix it, sell it strategy of refurbishing unloved properties and selling them for a huge profit, in favor of a buy-and-hold approach. The firm has used Blackstone Real Estate Income Trust, a fund sold in increments as little as $2,500, has raised more than $50 billion since it started five years ago. Be sure to check your spelling. and other data for a number of reasons, such as keeping FT Sites reliable and secure, Blackstone Inc has defaulted on a 531 million euro ($562.5 million) bond backed by a portfolio of offices and stores owned by Finnish company Sponda Oy, In an interview with the London Times, Jones said that without transparency of rents, the entire commercial renters market will be in crisis across London and nationally within the next three years.. Elsewhere, a trail of smaller dominoes was falling. All the courses are of global standards and recognized by competent authorities, thus offers FT membership to read for free. Blackstone is buying the asset on behalf of Blackstone European Property Income Fund, a new perpetual life vehicle targeting the individual investor market. The Blackstone European Property Income Fund (BEPIF) has acquired a EUR 520 mln pan-European logistics portfolio from Elite Logistics Fund I. "The company has incorporated a wholly owned subsidiary named Reliance SOU (RSOUL) to carry on, inter alia, the business of development of properties for commercial use," it said in a BSE filing. In that case, the owner has to be good at producing what occupiers want and at filling gaps, says Bill Hughes, head of real assets at LGIM. In April 2020, it banned commercial property landlords from demanding rent arrears or evicting tenants. The universe of investment is wider, and the appeal of real estate has materially changed, Hughes says. BLACKSTONE PLANS EUROPEAN INFRASTRUCTURE FUND INITIALLY TARGETING UP TO $2 BILLION - BLOOMBERG NEWS | March 3, 2023 . in KSA, UAE, Qatar, Kuwait, Oman and Bahrain. This content is only available to registered users You must be logged in to continue Would you like to read more? What the SPR Refill Means for Oil Futures, Modern Slavery Act Transparency Statement. He says landlords are going to have a much closer understanding of the financial performance of their tenants and the different ways in which value is accrued to the tenant through the tenancy just as The Arch Co. is requesting to see the financial data of its tenants, and as LGIM is using turnover leases for new tenants and leveraging data analytics to be more fluid and flexible in the way it fills legacy shopping centers. Online tuition for regular school students and home schooling children with clear options for high school completion certification from recognized boards is provided with quality content and coaching. Thats something of an understatement. Fill all that empty store space by giving it to entrepreneurs for free. graduation. NIOS helped in fulfilling her aspiration, the Board has universal acceptance and she joined Middlesex University, London for BSc Cyber Security and Thats before you even get into the shift to online shopping. The changing makeup of these portfolios is a signal to investors that the landscape in commercial real estate has irrevocably changed. The Arch Co. said it had cleared 50 percent of the backlog of outstanding rent reviews within the first 12 months, lower than its target of 80 percent because of the onset of Covid-19. We still have complete faith in theSponda portfolio and itsmanagement team, added the company. SC asks Authum Investments to implement resolution plan for Reliance Home Finance22 hrs ago, Uttar Pradesh CM meets aggrieved Noida homebuyers, assures 'complete solution'22 hrs ago. Blackstone said the sudden influx of speedy grocery-delivery companies in this part of London is a result of demand from these companies for space, rather than the result of any company strategy. LGIM would not confirm where Kingland sits within its fund portfolio, saying only that its retail assets are found across a number of funds. The private equity group said the acquisition is another example of Blackstones long-term conviction in the UK and in high-quality, sustainable office assets in key European cities., James Seppala, head of real estate Europe at Blackstone, said: We continue to see strong demand for high quality, sustainable office spaces that attract the best talent and employers. Blackstones income-focused European real estate vehicle has bought a 520m logistics portfolio from Macquarie Capital Principal Finance and Elite Partners Capital. According to Landsec, the sale to Blackstone European Property Income Fund will be completed before the end of the year. Related Persons. It could wait out an 18 months suspension of rent increases and a moratorium on evictions that continues until March 2022. The fund had its first close and This copy is for your personal, non-commercial use only. At the time of the downgrade, 297.1 million of the senior loan remained outstanding, according to Fitch. Side-letter deals risk inflating the market, Guardians of the Arches has warned, as the contracted amounts are often different from the amounts being paid. Erin Peyman, head of property at Weezy, says the company has been working together with The Arch Co., using its property location requirement list to look for its next fulfillment centers. Landsec has sold 6-9 Harbour Exchange in Londons Docklands to Blackstone European Property Income Fund (BEPIF) for 196.5m. As consumer preferences continue to evolve, our sense is that the demand for distribution centers in infill locations may increase.. Mopeds line up in front of open arches filled with rows of metal shelving, bursting with dried goods and household cleaning products. Outside, Deliveroo drivers on bikes pull up near shuttered archways bearing small signs for chain restaurants. WebSince joining the firm in 2014, Mr. Jay has been involved in the financing of all European real estate investments including asset, stock and portfolio-level financings and in We use cookies to ensure the best experience for you on our website.If you choose to ignore this message, we'll assume that you are happy to receive all cookies on ET RealEstate. And because Network Rail still owned the tracks, the British taxpayer would foot the bill to inspect and maintain the structures, while Blackstone could focus on filling empty arches and revaluing tenanted ones. Advanced search Blackstone defaults on $562 million Nordic property-backed CMBS - Bloomberg News: RE. Its still a massive risk to open a shop in the pandemic, she says. Get ETRealty's top stories every morning in your email inbox. It opposed the privatization of the arches during the sale and although the privatization succeeded, the tenants managed to get Blackstone to sign a charter, an informal agreement to hold regular meetings and communicate any changes. On Londons crumbling high streets, two massive real-estate investors are banking on opposing strategies. Change the plan you will roll onto at any time during your trial by visiting the Settings & Account section. Marcus Geddes, Managing Director Central London at Landsec said: The sale of The strategy is an expansion of Blackstone Real Estates perpetual core-plus business, which has $116bn of assets under management globally. WebBlackstone European Property Income Fund (Master) FCP: Street Address 1 Street Address 2; 11-13 BOULEVARD DE LA FOIRE: City State/Province/Country L-1528: 212-583-5000: 3. -2.90 -2.90%. Asset owners and real estate investors plowed money into Nordic real estate after the 2008 global financial crisis. Blackstone Inc. is a leading asset management giant and a prolific real estate investor. The company was founded in 2000 and has been listed on the Helsinki Stock Exchange since 2006. (Bloomberg) -- Blackstone Inc. defaulted on a 531 million ($562 million) bond backed by a portfolio of Finnish offices and stores as rising interest rates hit European A week after she started working on a business plan for a plant shop, she heard about the opportunity to take on an empty retail unit on Kingland, with free rent and business rates for the first two years. Almost 30 million square feet of retail space permanently closed across the U.K. in 2020 alone. Blackstone European Property Income Fund is a buyout fund managed by The Blackstone Group. Dr. Judy Brown travels across the globe with a prophetic word for the masses. our Subscriber Agreement and by copyright law. Our Degree programs are offered by UGC approved Indian universities and recognized by competent authorities, thus successful learners are eligible for higher studies in regular mode and attempting PSC/UPSC exams. In Eastbourne, another south coast town, LGIM is transforming another shopping center with swings, roundabouts, and seating on the theme of play. Blackstone has dramatically debuted in the UKs regional office market after securing an office in Birmingham for 182m as part of its European core-plus yield-oriented strategy, React News can reveal. organisation Follow @ETRealty for the latest news, insider access to events and more. When permission was initially rejected by the local council in 2019, McWilliam doubled down, writing articles in the press about how the company would throw ourselves open to public opinion and seek a fairer balance of power between community, planning authority, and developer to win support for the new development. Increasingly, landlords are going to be providing space, whether its retail or office, on a more flexible basis, with rents that are more tied to performance. WebBlackstone European Property Income Fund Associates (German Minority) S. r.l. Compare Standard and Premium Digital here. In mid-August, a handful of business owners gathered in an arch in east London to discuss these developments and how they could resist rent hikes and eventual eviction. The property fund would not reopen until October, seven months later. Share your stories and opinions with us here. It underlines our commitment to long-term investments that will help build the UKs economy for the future.. In the U.K., institutional investors and pension funds with commercial real estate in their portfolio have been forced into this cuddly arrangement in the knowledge that shareholders everywhere are watching. For non-personal use or to order multiple copies, please contact Blackstone's $71 billion unlisted real estate income trust (BREIT) has also been in hot water. But as the pandemic accelerated the decline of brick-and-mortar stores, LGIM started to think about its real-estate portfolio more like the build-to-rent sector: Build something people want to rent and offer them a short lease. WebFeb 2022 by Property Forum | Investment Savills, together with Eastdil Secured, has advised Macquarie Capital Principal Finance and Elite Partners Capital on the sale of a pan-European logistics portfolio, Elite Logistics Fund I to Blackstone European Property Income Fund (BEPIF) for 520 million. In 2018, Blackstone became the U.K.s largest small-business landlord. Photograph:(Reuters). Even before Covid-19, a commercial real-estate portfolio of that size was risky.