Blackstone Buying GE Japan's MF Business

TOKYO—In Japan's largest commercial property transaction of the year to date, the Blackstone Group is buying GE Capital's multifamily business for approximately US $1.6 billion, or more than 190 billion yen. The deal for more than 10,000 residential units across 200 properties primarily in Tokyo, Osaka, Nagoya and Fukuoka signals a greater focus on Asian markets for the New York City-based asset management firm.

Alan Miyasaki, a Singapore-based senior managing director who oversees Blackstone's real-estate acquisitions across Asia, says the firm continues “to believe strongly in the residential sector's fundamentals, especially in Japan's major cities.” In an interview with the Wall Street Journal, Miyasaki said he likes the sector's stability and the geographic diversity of the portfolio. The properties that Blackstone is acquiring from GE Japan Corp., through funds affiliated with Blackstone Real Estate Partners Asia, are mainly standard, non-luxury apartment units.

Francois Trausch, Asia-Pacific CEO at GE Capital Real Estate, says the sale “supports our global strategy to reduce our equity book as we continue to build our global debt operations. We are pleased that our Japan residential business will transfer to another premier owner/operator with a strong emphasis on tenant satisfaction.”

As a frame of reference, Bloomberg reported that the portfolio represents about 45% of the size of the portfolio held by Japan's biggest residential REIT, Advance Residence Investment Corp., which has 423.1 billion yen of assets under management. The deal tops last month's acquisition of the 32-story Pacific Century Place Marunouchi office tower in Tokyo, for which Singapore's sovereign wealth fund, GIC Pte., paid about 170 billion yen to private equity firm PAG.