Blackstone favors industrial realty

Stephen Schwarzman, Chairman and Chief Executive Officer of The Blackstone Group, speaks during an interview with Maria Bartiromo, on her Fox Business Network show; "Opening Bell with Maria Bartiromo" in New York Feb 27, 2014. [Photo/Agencies]

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Global alternative asset manager Blackstone Group LP likes commercial and industrial real estate in China and regards residential property as less interesting, its chairman and CEO told China Daily on Thursday.

"Industrial warehouses in China are very interesting, and are set to benefit as Internet and retail sales increase," said Stephen Schwarzman. "So are office buildings and shopping centers."

Schwarzman, in Beijing to attend the fifth annual US-China Consultation on People-to-People Exchange, said Chinese residential real estate has the potential for volatility and regards it as "the least interesting in the nation's real estate sector".

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He added that real estate markets vary across China. "The imbalance of China's real estate among different classes and regions is interesting," said Schwarzman.

A decrease in value of some real estate assets and the shortage of credit from banks have created opportunities for Blackstone to purchase good assets from developers and other sellers.

Schwarzman said his company specializes in buying very large properties, as liquidity and capital can be difficult for some competitors, but these conditions provide a terrific advantage for Blackstone to buy at favorable prices.

"The long-term prospects for the Chinese real estate market are quite good, but it's normal in a certain period of time for the value of some properties to go down and at some time later to become stable again," he said.

Schwarzman said China is still growing very quickly compared with most other countries, and mentioned that some people seem overly concerned about China's growth.

"The perception of China's slowing economy can keep other investors away, and we look at the same situation and think that's an opportunity," he said.

Schwarzman said that if a country undergoes economic reforms, many business opportunities will be generated, and so it goes in China.

He said that his company has just finished a deal in China's healthcare sector but declined to release the name.

Blackstone Group LP, with Chinese technology consulting and outsourcing firm Pactera's CEO and other managers, took that company private last October in a deal in which Blackstone paid $539 million.