Australia's Dexus Property Group is selling 65 of its U.S. industrial properties to affiliates of Blackstone Real Estate Partners VII for $770 million and plans a share buyback with the proceeds from the sale, Dexus said on Monday.
The transaction will be settled in mid-June and underlines Dexus's strategy to exit the non-core U.S. markets and free up capital, Dexus said.
"This transaction further strengthens our balance sheet with gearing and interest cover ratio improving," Dexus's CFO Craig Mitchell said in a statement. "We will retain approximately A$600 million in headroom and will have no debt expiring before June 2013."
Many Australian property trusts have repatriated their overseas investments in the past few years after being hit by the global credit crisis and volatile moves in the Australian dollar.
Dexus said it would use the capital proceeds of the deal to start a securities buyback of up to A$200 million -- about 5 percent of equity on issue at the current trading price.
Shares of Dexus were down 0.3 percent in late morning on Monday in line with the broader market weighed by euro zone debt concerns.
The transaction would have no impact on its fiscal year 2012 guidance for funds from operations of 7.65 cents per share and distribution of 5.35 cents per share, Dexus said.
Blackstone has raised more than $10 billion for its latest real estate fund, Blackstone Real Estate Partners VII, and is looking to reach $12 billion, a person familiar with the plans said in February.
Last year the private equity firm bought nearly 600 U.S. shopping malls from Australia's debt-laden Centro Properties for $9.4 billion in one of the biggest global property deals since the credit crisis, and the third largest M&A deal in Asia Pacific in 2011.
