Blackstone has closed on its sixth European opportunistic real estate fund, Blackstone Real Estate Partners Europe VI, with a total capital commitment of $10.7 billion, or €9.8 billion. It is the largest dedicated European real estate fund.
Bloomberg reports it will give the firm about $30 billion in buying power, while also marking the largest private equity capital raise since the Covid-19 global outbreak. James Seppala, head of Real Estate Europe for Blackstone, said in prepared remarks the scale and reach of BREP Europe VI will allow the global private equity giant to work strategically during this period of elevated volatility due to the pandemic. Seppala said the fund received support from both first-time and returning investors from around the world, including public-sector pension plans representing millions of retirees. He called the demand for the fund “significant” and stated it is a testament to the confidence the firm’s investors have in its ability to deploy strategic long-term capital across Europe.
In September, BREP Europe VI made its first investment, purchasing all the subsidiaries and assets of Dream Global REIT, the first Canadian REIT to invest exclusively outside of Canada, in a deal that was valued at $4.7 billion, or about C$6.2 billion. The high quality and diversified portfolio included office and logistics assets throughout Western Europe, with most in Germany and the Netherlands as well as Austria and Belgium. The portfolio at the time of sale encompassed at least 215 properties including Wahlzmuhldstrasse 65-65a, an 114,100-square-foot office building in Ludwigshafen, Germany, and the 116,300-square-foot office building at Transformatorweg 38-72 in Amsterdam.
That deal came soon after the investment firm closed Blackstone Real Estate Partners IX, with $20.5 billion in total capital commitments, making it the largest real estate fund ever raised.
When Blackstone announced its fourth-quarter and 2019 year-end results on Jan. 30, the firm said its real estate business had a record $163 billion in assets under management, with inflows of $8 billion in the fourth quarter and $34.2 billion for the year. It also noted an additional $442 million in inflows to BREP Europe VI, which had begun its investment period on Oct. 9.
Record UK investment
In late February, Blackstone agreed to buy the UK’s iQ Student Accommodation from Goldman Sachs and Wellcome Trust for a record-breaking $6 billion, or £4.7 billion. Said to be the largest private real estate deal in British history, it gave Blackstone control of one of the leading providers of purpose-built student housing in the UK, with a portfolio of 67 properties and more than 28,000 beds, plus more than 4,000 beds in the development pipeline.