Blackstone pulls out of Taipei 101 tower deal, say sources: Reuters

Blackstone (BX.N) has pulled out of a potential $700 million investment in the Taipei 101 tower operator after the Taiwanese group declined to disclose certain financial details, two sources with direct knowledge of the situation told Reuters.

Taipei Financial Center Corp (TFCC), which operates the iconic Taipei 101 skyscraper, agreed to open its books in October to the U.S. private equity giant, which was looking to make its first investment in Taiwan.

Taipei 101 is the hottest spot for Chinese tourists visiting the island as it is among the world’s 10 tallest buildings with a shopping mall filled with luxury brands such as Louis Vuitton.

“The deal has fallen apart,” one of the sources said. “(Blackstone) did not even start the due diligence,” a crucial step if Blackstone wanted to pursue a purchase.

Blackstone had asked TFCC to disclose lease contract details of every tenant at Taipei 101 but TFCC refused on grounds of client confidentiality, said the sources. TFCC instead offered in March to provide lease contract details by categorized groups, rather than for each individual tenant, the sources said.

No conclusion was reached at that time and Blackstone has not been in touch with TFCC since then, the sources said.

Contacted by Reuters in Hong Kong, Blackstone declined to comment. A spokesman for TFCC said the group has not heard from Blackstone in the last few months.

A deal for the 37.17 percent stake that TFCC is putting up for sale on behalf of a major shareholder would have been Blackstone’s first investment in Taiwan.

“Taipei 101 is an excellent building with most of its revenues coming from rent,” said the other source. “From Blackstone’s point of view, they hoped to see details such as the period and rent range of each contract, which unfortunately TFCC did not offer.”

Some 98 percent of the tower’s space has been occupied, with its average rent the highest in Taipei, said Michael Liu, a TFCC vice president.

In its most recent effort to stand taller among global rivals, Taipei 101 won the certification in leadership in energy and environment design, version 4, last month, making it the first tower with such a green building credential outside the United States.

TFCC posted a record profit of T$2.036 billion ($65.2 million) in 2015, up 18 percent from 2014, Liu said. Its net profit in the first half of 2016 was T$1.077 billion, 8 percent higher than the same period a year earlier.