(Bloomberg) -- Private equity firm Blackstone Real Estate Partners LP has received a loan from Ares Management Corp. and United Overseas Bank Ltd. to refinance an existing facility that funded a commercial office block in Sydney, according to people familiar with the matter.
UOB funded the senior loan, while Ares provided the junior debt to refinance the existing bank facility and to fund a dividend payment, the people said. Blackstone had repaid around half of the existing A$980 million ($642 million) borrowing, with approximately A$450 million remaining, one of the people said. The quantum of the new financing was not disclosed.
Ares, Blackstone and UOB declined to comment.
Blackstone’s effort to increase leverage to fund a payout to investors underscores the softening valuations in Australia’s commercial real estate sector and the difficulties owners face when trying to sell assets. Local media reported last year the private equity firm pulled the sale of the tower, in which JPMorgan Chase & Co. is the anchor tenant.
Craig Parker, senior director for corporate ratings at S&P Global Ratings, said at a seminar in Sydney on Tuesday he expected more deterioration in Australia’s commercial real estate market and there would be further evidence to come.
--With assistance from Joyce Koh.
©2024 Bloomberg L.P.
