Global investment giant BlackRock (NYSE:BLK) is looking to offload its office towers in Shanghai at a nearly 30% discount to its acquisition price, according to Bloomberg.
This move highlights the structural weakness in the Chinese property market that has been accompanied by a sharp selloff in the country’s equities market. BLK had acquired the two towers in Shanghai for nearly $167 million in 2018. The company is now offering a discount on the property to speed up the transaction.
Reportedly, office rents in Shanghai plummeted to a decade-low last quarter while oversupply continues to weigh on the country’s commercial property sector. For BlackRock, the asset sale in Shanghai comes after its recent acquisition of Global Infrastructure Partners (GIP) in a $12 billion deal and better-than-anticipated fourth-quarter numbers. Meanwhile, the Chinese Yuan is facing weakness, and major Chinese stocks remain in a slump. Further, the Hang Seng China Enterprise Index is now languishing at a nearly two-decade low, as reported by Bloomberg.
Is BLK a Good Stock to Buy?
Overall, the Street has a Strong Buy consensus rating on BlackRock, and the average BLK price target of $903.54 points to a modest 12.2% potential upside in the stock. Shares of the company have gained nearly 10% over the past year.
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