Blackstone to sell European property JV for €1.3bn

Blackstone owned more than 300,000 residential units worldwide as of last June

Blackstone Group is cashing out of another residential real-estate investment.

The asset management firm, together with its joint venture partner Round Hill Capital, has agreed to sell a residential property portfolio to Swedish real estate firm Heimstaden Bostad for €1.3bn, according to a Round Hill spokesman.

The sale will see Heimstaden take ownership of the largest privately held portfolio of residential assets in the Czech Republic. The portfolio includes about 42,584 homes, Round Hill said.

Blackstone and Round Hill bought the portfolio in 2015. Since then, the consortium has refurbished the properties and introduced new services for residents such as opening community centres. The property investors have worked with local and central governments as well as tenant associations during the revamp, Round Hill said.

The exit marks the end of another of Blackstone’s wagers on residential housing.

The firm’s $157bn real-estate unit owned about 311,000 homes across the world as of June 30 last year. Its status as one of America’s largest landlords has drawn the ire of Democratic presidential candidate Sen. Elizabeth Warren. In a blog post late last year she accused Blackstone and other Wall Street firms of contributing to a global housing crisis.

Blackstone’s strategy has proven profitable. Among its most successful deals was Invitation Homes, a company Blackstone created in the wake of the financial crisis to purchase tens of thousands of homes out of foreclosure across the US.

The investment firm took advantage of plummeting home prices to buy up houses on the cheap. In total, Invitation Homes ended up owning around 82,000 homes, The Wall Street Journal previously reported.

Including dividends paid before and since Invitation’s 2017 initial public offering, Blackstone made about $7bn from the strategy, according to securities filings, more than double what it invested.

London-based real estate shop Round Hill has had similar success. Since the firm was founded in 2002, it has established itself as one of Europe’s largest private landlords.

Round Hill has bought and managed more than 100,000 residential units across Europe, according to its website. Last year, Round Hill said it sold a large portfolio of real estate assets in the Netherlands to Heimstaden in a €1.39bn deal.

Round Hill’s success investing in the European property market saw the firm open up offices in Boston and New York in 2017.

The next year, the firm sold a stake in itself to Dyal Capital Partners, a Neuberger Berman Group unit, to help fund growth. Round Hill now has 14 offices globally and employs 230 people, according to its website.

Source: Financial News

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