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Hot on the heels of court approval for its Crown Casino takeover, international fund manager Blackstone has sold its stake in a Melbourne landmark, the Southern Cross Towers complex at 111-121 Exhibition Street.
Cushman and Wakefield and CBRE brokered the transaction, which saw Charter Hall Group’s Charter Hall Prime Office Fund snap up a half stake in each tower for $2 billion.
Aspects of the deal and what was offered changed several times since April this year when Charter Hall initially joined Singapore’s GIC to offer $2.1 billion for a 75 per cent stake in the towers.
Stakeholders Blackstone and Brookfield then offered the entire complex for sale before finally moving back to offering half interests in the towers.
Brookfield now has a 25 per cent stake in the east tower and a 50 per cent stake in the west tower. After the latest sale, Blackstone owns 25 per cent of the east tower alone.
Charter Hall now has a 50 per cent stake in both towers.
The complex has frontages on Exhibition, Little Collins and Bourke streets with a total area of 126,000sq m.
The east tower has 37 levels with 80,000sq m of space and a weighted average lease expiry of six years.
The west tower has 45,000sq m of space across 20 levels, including key tenant Australia Post, which will move to a Richmond office in 2025.
The Charter Hall Group also owns other key office properties including the Wesley Precinct, 555 Collin Street and Chifley Square.
Its $9-billion Charter Hall Prime Office Fund portfolio is only part of its entire office portfolio worth $25 billion.
Stephen Schwarzman founded Blackstone as a mergers and acquisitions company in the US in 1985.
The company is now an alternative investment management company with, as of 2021, $1.27 trillion of assets under management.
The Vanguard Group is the largest shareholder currently in the Charter Hall Group with 7.58 per cent in shares either directly or through subsidary companies.
Schwarzman worked at Lehman Brothers with Larry Fink who went on to found US investment management firm Blackrock Inc in 1988.
Blackrock Inc has a 1.25 per cent stake in Charter Hall Group through its subsidary company iShares but it also owns a 13.69 per cent interest in The Vanguard Group, Charter Hall Group's largest shareholder.
