Blackstone Group LP is on the verge of dealing the sell of IndCor Properties Inc., an owner of U.S. industrial real estate, to investors led by Singapore’s GIC Pte for more than $8 billion, according to some sources. That will add to the building next to Tokyo station it bought last month and plans announced previously to co-invest in Auckland’s Viaduct Quarter.
The GIC partnership is looking for $5 billion in debt to finance the acquisition, said one of the sources, who asked not to be identified because the negotiations are private. The two sides have reached an agreement in principle that could still fall apart, another person said. In the meantime, Peter Rose, a spokesman for New York-based Blackstone, as well as Jennifer Lewis, a spokeswoman for GIC, Singapore’s sovereign-wealth fund, both declined to comment.
“It appears that GIC is an exception as other state funds are investing less in real estate,” said Song Seng Wun, an economist at CIMB Research in Singapore. “They are thinking more long term than other state funds and go for higher risk and return.”
IndCor was formed in 2010 as a portfolio company of Blackstone and has a footprint of warehouses and distribution centers across the United States, according to the company website. On the other hand, GIC has stepped up its real estate purchases in recent months, buying office buildings in Tokyo and investing in Australian student accommodation as a way to diversify its portfolio and secure better yields. Moreover GIC is estimated by the Sovereign Wealth Fund Institute to manage around $320 billion in assets. Real estate accounted for 7 % of its portfolio in the financial year to April 1, according to its annual report.
In addition to GIC, Norwayâs state fund, the world’s biggest, is also expected to pursue more property deals. The fund formed a new real estate group in July and is seeking to invest almost $10 billion annually over the next three years. Property made up 1.3 percent of the fund’s $813 billion holdings in the third quarter, compared with 0.9 percent a year earlier, according to its quarterly reports.
Blackstone declined to comment on the IndCor sale, which was first reported by Bloomberg.