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China Investment Corp, Blackstone close to agreement on Chiswick Park- FT report

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November 10
7:52 PM 2013

According to a report on the Financial Times, China Investment Corporation was close to acquiring Chiswick Park. Citing people familiar with the negotiations, the report said CIC was talking exclusively with US private equity firm Blackstone to buy one of London's biggest office developments. The 32-acre real estate property is located in West London. The sources added that the discussions were already in the advanced stage and that a deal could be reached before the end of this month.

Should the deal proceed, the Financial Times report said this would be one of the highest value real estate acquisitions undertaken by CIC's European investment arm. This would also be the Beijing-based company's second purchase in the property market in the UK. Last year, it bought Deutsche Bank's City of London headquarters in a deal worth GBP 245 million. Unlike the sovereign wealth funds of Singapore, Qatar and Malaysia, CIC had so far not entered into mega deals since then.

Blackstone originally put the business park up for sale last year with a price tag of GBP 800 million. Tenants of the sprawling property included Swarovski, Pepsi, Tullow Oil and QVC. However, the sale did not lure buyers who were willing to pay the price and Blackstone decided not to push through with it. Instead, the private equity company refinanced its outstanding debt on the project worth GBP 600 million. It then built and then rented out the last 12 office blocks of Chiswick Park.

The sources told the Financial Times that the deal between CIC and Blackstone could be worth anywhere from GBP 650 million to GBP 800 million. CIC has a stake in Blackstone. It invested USD 3 billion in the company before Blackstone went public six years ago.

Since January this year, Blackstone has offloaded billions of dollars worth of real estate in a bid to capitalize on the increasing prices of real estate, the report added.

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