Vanke Confirms $1.9B Deal for Blackstone Assets

Blackstone APAC real estate boss Chris Heady (right) invested in China’s SCP Group in 2013

China Vanke today confirmed a $1.9 billion deal with Blackstone Group to purchase unspecified real estate companies from funds managed by the world’s largest alternative investment manager.

The mainland developer, which was China’s biggest by sales in 2015, made the purchase on July 12^th, through a fund it has organised with unnamed partners, with Vanke contributing RMB 3.89 billion ($583 million) to the transaction, according to an announcement today to the Hong Kong stock exchange.

While Blackstone is active in China with investments in shopping malls, logistics and residential developments, neither Vanke nor Blackstone has commented on the nature or location of any assets held by the companies that Vanke’s fund would be purchasing from the US investment firm.

Today’s announcement was foreshadowed last week when Vanke disclosed that a potential deal with Blackstone was in the advanced stages. In that announcement to the stock exchange on 12 July Vanke also said that, together with its partners it would be acquiring a 96.55 percent share in commercial property companies, with the combined stake estimated to be worth RMB 12.87 billion ($1.9 billion), although the acquisition was not linked explicitly to Blackstone.

The two companies have already been working together in logistics real estate projects on the mainland, and Blackstone has invested in retail portfolios in China, including joining with Australia’s Macquarie group to invest in projects belonging to Dalian Wanda Group, and acquiring a 40 percent stake in Shenzhen-based mall developer SCP for $400 million in 2013.

A potential transaction between Vanke and Blackstone was first revealed last month, before the final signing took place, when the developer’s non-executive director Liping Zhang excused himself from voting on a proposal by Vanke management to purchase sites from a company belonging to Shenzhen’s metro operator. Zhang, whose day-job sees him suiting up as chairman of Blackstone China, abstained from that vote on the grounds that Blackstone and Vanke were negotiating a commercial real estate transaction.