Mirvac sells Westpac building share to Blackstone for $435m

Property developer and manager Mirvac has sold its half share of Westpac’s headquarters at 275 Kent Street to the US giant Blackstone for $435 million.

Blackstone is exepected to place the property into one of its current fund, possibly the pan-Asia real estate fund.

The sale is another step in the growth of Mirvac’s ”capital partnering” plans, whereby Mirvac’s single asset risk is diluted and cash is unlocked from the balance sheet and used to develop other parts of the business.

As part of the deal, Mirvac has also granted Blackstone interdependent call options  over a portfolio of seven non-core office and retail assets in NSW, Victoria and Queensland, for $391.4 million, and will provide $156 million in vendor financing as part of the transaction.

The deal, brokered by JLL and CBRE, comes on the eve of Mirvac’s third quarter investor update.

It is said the new Blackstone Real Estate Asia fund will target investors from China, Korea, Singapore and possibly Japan.

Mirvac’s chief executive, Susan Lloyd-Hurwitz, said the transactions are key capital management initiatives for Mirvac, which will allow the group to deploy capital across the group and into opportunities that align with its strategic criteria.

”In total, over $826 million will be released from sale proceeds over time to be re-invested into the growth of the business,” she said.

It follows the partnership deal that Mirvac struck with the US financial services group TIAA-CREF for the sale of a 50 per cent stake in 699 Bourke Street in Melbourne for $73 million.

Blackstone’s Head of Real Estate Asia, Chris Heady, said 275 Kent Street represented a unique opportunity to invest in a high quality, strategically located building in the Sydney CBD, as well as partner with Mirvac.

”This transaction also underscores our long term commitment to investing in the Australian real estate market,” he said.

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