January 20, Private equity investment firm Blackstone Group LP has sold its stake in a joint venture with Chinese developer Evergrande Real Estate Group Co. Ltd. (3333.HK), the second time it has divested China-based property assets.
Late on Wednesday, Evergrande said in a filing to the Hong Kong Stock Exchange that one of its subsidiaries had bought back a 40% stake in the Royal Scenic Peninsula housing project in Guangzhou for $161.6 million. One of the sellers was Blackstone-owned MB Asia Real Estate Fund.
The PE firm said it would continue to actively pursue further property investments in China.
"We are strong believers in the long-term growth prospects for the real estate market in China and will be looking for further investment opportunities for our funds," senior managing director Stuart Grant told Reuters.
But that doesn't mean the company is optimistic about the short-term prospects for the local property market, property insiders said.
"The statement is too political, without doubt the long-term growth prospects are good, but that doesn't mean it [Blackstone] believes the same for the current outlook," an executive from an unnamed listed property firm was quoted as saying by the Oriental Morning Post.
China's sovereign wealth fund owns just under 10% of Blackstone through a 2007 deal.
Last September, Blackstone sold its 95% stake in the Channel One shopping mall in Shanghai to Hong Kong developer New World Development Co. Ltd. (0017.HK). That deal triggered speculation of the firm's future investments in China.
"It's normal for a fund to exit a project, and that doesn't mean Blackstone's exit from the Chinese real estate market," Chen Limin, general manager of CBD Commercial Investment Management Ltd. said of the Channel One sale.
Evergrande said 2011 revenue was RMB 80.4 billion ($12.8 billion), making it the country's second-largest developer after China Vanke Co. Ltd. (000002.SZ) with RMB 121.5 billion.
edited by Kendra KE
