Blackstone Group LP, the famous asset management and financial services company, is planning to invest more than $4 billion in the Asian property market
According to the Wall Street Journal, the firm is planning to raise funds worth more than $4 billion to invest in China and other Asian countries. Though the exact amount of the fund is not known, the sum is twice the value of what Blackstone had initially planned to raise.
Blackstone LP is one of the world's largest real estate investment firms. The company hopes to find great opportunities in the region as property values have declined in many Asian countries on account of an economic cool-down.
The firm is applying the age-old rule of "investing in real estate when values are low and making a huge profit out of those investments when the economic tables turn". Some Asian experts predict that raising the amount will not be very difficult for the firm as there is not much competition in the region. Only some niche players have been able to pull off a real estate investment fund, reports WSJ.
However, the investment plan involves a huge risk as many of its rivals who have invested in the markets have either minimized their investments or completely pulled out of the region in the recent past.
Meanwhile, investors are worried that Asia will suffer due to slowdowns in Europe and the U.S. Although industry pioneers believe that Asian nations have become key players in driving global economic growth, reports BBC News.
"This is the era of Asian-consumption led global growth. From a region wanting to be an economic superpower, Asia has become one. It now rivals the US in terms of global economic and trade influence," Shaun Rein, managing director of China Market Research Group said to BBC.
In terms of real estate, the U.A.E is one of the most prosperous Asian regions for investment. Singapore and Hong Kong are also profitable areas. There is a property boom in China despite tight regulations and leading domestic investors going offshore. Considering the opportunities, Blackstone's investment plan might be a reaper for the company.
