Morgan Stanley and private equity giant Blackstone are close to buying AUS$2 billion worth of distressed commercial property debt being offered for sale by Lloyds Banking Group for about AUS $640 million ($621 million), according to reports.
The consortium is understood to be paying about 34c in the dollar for the debt, beating a rival group comprising Goldman Sachs, private equity giant Brookfield and Singapore's Government Investment Corporation, according to Reuters.
The deal is the latest in a series of portfolio sales of loans extended before the global financial crisis that then went bad when property prices plunged.
Morgan Stanley and Blackstone, two of the largest property funds, are among a group of global real estate investors looking to pick up loans on the cheap as sellers seek to shed debt and store cash.
Deutsche Bank out of Asia was the lender for the latest MSREF/Blackstone debt acquisition, struck by MSREF’s Chris Tyan and Blackstone’s Allan Miyasaki out of Tokyo.
Blackstone is also believed to be among the groups that have lodged a bid for BlackRock’s $400 million property portfolio.
Richard Hunt of Fort Street advisers was selling the debt on behalf of Lloyds.
