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Blackstone Real Estate Partners VII, the fund that has proved one of Blackstone Group LP's most popular offerings with investors, has secured a rare commitment from the Chinese government, a source familiar with the matter said on Thursday.

The investment underscores China's growing appetite for alternative assets with little correlation to securities such as stocks and bonds, that are currently rocked by macroeconomic volatility, but also its faith in U.S. commercial real estate.

The secretive State Administration of Foreign Exchange (Safe), which manages China's more than $3 trillion in foreign exchange reserves, has agreed to invest about $500 million in Blackstone's latest real estate fund, the source said.

Blackstone declined to comment while Safe could not immediately be reached for comment.

Blackstone's global real estate arm is active in nearly every major sector of commercial real estate, owning offices, warehouse and distribution centers, shopping centers and hotels. It has been able to capitalize on limited supply and slowly increasing demand for commercial space in the United States and benefit from occupancy improvement and rent growth.

Blackstone has raised over $12 billion for Blackstone Real Estate Partners VII and expects to reach its $13.3 billion fundraising target in a few months, Blackstone CEO Stephen Schwarzman told analysts on a conference call last week.

China, which holds close to $1.2 trillion in U.S. treasuries, has also been looking to capitalize on the liquidity concerns of assets managers such as pension funds amid financial market volatility by snapping up their private equity assets.

General Motor Co's underfunded pension plan has agreed to sell a private equity portfolio to Safe for a price tag in the region of $1.5 billion to $2 billion, the Financial Times reported last week.

The Wall Street Journal reported on Safe's investment in Blackstone's real estate fund earlier on Thursday.

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