Private Equity: Blackstone Makes Bid for Soho China

March 11, 2020 | Private Equity, Real Estate

Soho China could be next. Proving once again that the firm is fearless, private equity and alternative form Blackstone (NYSE: BX) is stepping up to the plate to bid for real estate in China.

Blackstone is bidding $4 billion to take over Hong Kong-listed property company Soho China.

The bid is just 78% of book value and about half what Sohu China was considering selling its property portfolio back in October.

Blackstone and Soho China

Chinese and Hong Kong property markets have been in a free-fall that has accelerated with the spread of coronavirus in the region.

In spite of this Blackstone is betting that the premier status of many of Shu Chinas office projects will be worth far more than they are offering right now. Sohu China’s occupancy rate in 2019 was 94% so the private equity buyers may indeed be buying a bargain at current prices.

Originally founded as a build and sell developer Soho China switched strategies to become a build and own real estate company back in 2012. The firm currently owns holds 1.4 million square meters of office space in Beijing and Shanghai for long-term investment.

Blackstone has a history of making big bets in difficult times that pay off huge off for their investors. They raised $7.1 billion in their Asian property fund late in 2019 so do not be surprised if this is not the last Asian property company they bid for during the current tumultuous environment in Asia.

Recent: Real Estate: Indian Real Estate 2019-Big Deals Largely Concluded by Foreign PE Investors

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