The Blackstone Group L.P. (NYSE:BX) To Acquire General Electric Company (NYSE:GE)’s Japan Residential Business

The Blackstone Group L.P. (NYSE:BX) said that it would acquire General Electric Company (NYSE:GE)’s Japan Residential Business for more than 190 billion yen. It will make as one of the largest property deal in Japan this year. Prior to it, GIC Pte bought an office tower in Tokyo for more than 170 billion yen. Japan is witnessing a rise in larger property transactions this year. In August, Mori Trust acquired Meguro Gajoen for 130 billion yen from Lone Star Funds.

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The details

The Blackstone Group L.P. (NYSE:BX) will purchase over 10,000 apartments units in 200 properties of General Electric in Japan. These properties are based in largest cities of Japan including Nagoya, Osaka and Tokyo. General Electric Company (NYSE:GE) is withdrawing from the investments made in property globally. It wants to shift its focus on lending property. The new deal with Blackstone supports its plan to reduce GE’s equity book as it continues to work on global debt operations.

The extended association

General Electric Company (NYSE:GE) sold its development land and warehouses in the U.S. to Blackstone at the start of the year. It also sold more than 30,000 units in apartment buildings in the U.S. for more than $2 billion to Blackstone last year.

Investing in Japan

Alan Miyaski, Senior MD at Blackstone, said that the company is delighted to invest in a well-managed business in Japan. The residential industry remains strong in major cities of Japan. However, given recent news of Japan heading into recession, it can be a risky investment for Blackstone and a wise decision made by General Electric Company (NYSE:GE).

Currency benefit

On the currency front, the U.S dollar is trading firm against the yen, which should work in benefit of The Blackstone Group L.P. (NYSE:BX). A strong dollar will make the assets look attractive to real estate buyers. At the same time, dollar results into weaker commodity prices that allow stimulus to move into the real estate sector.

About the Author

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.

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