Blackstone wants a bigger slice of Australia’s build-to-rent market

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The largest manager of private real estate in the world has focused its exposure on rental income that keeps up with inflation. In Australia, that means Blackstone is keen to develop more build-to-rent projects.

For Blackstone’s real estate arm, generating rental income growth that can stay ahead of rising costs is paramount.

“Just about everywhere we invest and through the data – not only in our real estate portfolio but of course to our whole Blackstone ecosystem – we do see inflation metrics rolling over, coming down, which we think is a positive sign,” Ms McCarthy said.“But the great news for us is that we have been preparing for a higher interest rate, higher inflation environment for a very long time.”

As a result, Blackstone has directed its real estate investment into warehouses, rental housing, hospitality and life sciences accommodation. Those areas constitute about 80 per cent of its real estate portfolio. “These are all asset classes where we are able to drive strong cash flow growth, which really helping to mitigate an environment where there’s downward pressure on valuation multiples,” Ms McCarthy said, speaking from Blackstone’s new Sydney office at Deutsche Bank Place.It has about $23 billion under management and an expanding head count, now 55-strong, to manage that pool.

despite holding a large portfolio of rental housing in the US, UK and Europe. That gives it good reason to develop its BTR portfolio further in Australia where, similar to other markets, the supply of housing is not keeping up with demand, according to Ms McCarthy.Also high on the list for Blackstone is logistics investment.

 

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