The property unit of Blackstone Group LP (BX) has forayed into the Singapore real estate market with the purchase of a property there. According to a Reuters report, the company has acquired StarHub Green project, a 400,000 square feet business park, from SEB Asset Management, a German company. Blackstone shelled out S$215 million ($173 million) for this acquisition.
The property was sold by SEB as part of its effort to raise cash to oblige to the redemption demands. In fact, in the midst of the financial crisis of Europe, a number of European financial institutions/financial institutions in the territory have resorted to asset sales for generating cash. Such a situation has opened up opportunities for companies like Blackstone to diversify and augment its real estate assets.
Based in Germany, SEB Asset Management is a unit of Skandinaviska Enskilda Banken, a Stockholm-based bank. Blackstone is an asset manager of alternative investments and a provider of financial advisory services. It is headquartered in New York, U.S.A.
Besides Blackstone, KKR & Co. LP (KKR) is also vying to expand its business in Southeast Asia. We believe this region attracts these companies with promises of growth in their investment value.
Last month, the Blackstone Group reported its first quarter 2012 economic net income (ENI) of 39 cents per share, missing the Zacks Consensus Estimate of 42 cents. This was also nowhere near 51 cents in the year-ago quarter.
Results declined due to the shrinking top line, which was, to some extent, softened by lower expenses. Despite the disappointing results, sturdy improvement in assets under management was a huge respite.
Going forward, we believe that investment appreciation in Blackstone along with the growing need for risk management, and alternative investment solutions within the financial service industry are expected to contribute positively to the company over the long run.
Nevertheless, the company’s poor performance combined with the persistent sluggish economic recovery will continue to put its financials under pressure.
Currently, Blackstone retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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