United States private-equity firm Blackstone Group LP dropped a 1.1-billion-yuan (US$161-million) Shanghai property purchase amid the global financial crisis and China's real-estate price slump, South China Morning Post has reported.

Blackstone scrapped the planned purchase of a 90-percent stake in the Changshou Commercial Plaza, the Hong Kong-based, English-language newspaper said, quoting unidentified people. The plaza consisted of two towers with a six-level shopping center and commercial complex in one, Bloomberg News reported.

Blackstone, which agreed to buy the stake from VXL Capital Ltd four months ago at almost twice the 586 million yuan the Hong Kong-listed company paid for it in March 2006, had planned to use it as a springboard to more China real-estate investments.

It scrapped the agreement after the global financial crisis dimmed the economic outlook and mainland Chinese property prices continued to slide, the newspaper said.

Blackstone was reported in August to have agreed to buy Skymall, a new shopping center in Shanghai, for more than 4.5 billion yuan from Chinese developer Super Ocean Group. The two sides had yet to reach a compromise on pricing, the SCMP said yesterday.

(Shanghai Daily October 14, 2008)