The Carlyle Group and developer Skelton Group have announced that they have formed a £750 million joint venture vehicle called Carlyle Skelton Development Group (CSD) to acquire and develop property throughout the U.K.
Carlyle Skelton Development Group will be able to invest approximately 750 million in U.K. real estate of which 150 million will be equity from The Carlyle Group and Skelton.
The joint venture plans to acquire a wide range of opportunities and investments with substantial development potential across all sectors, including both commercial and residential.
Carlyle and Skelton have been working closely over the past 12 months and have acquired two central London buildings for development - a 58,000 sq ft office building in Waterloo with hotel development potential, and a freehold 41,000 sq ft office building in Hay Hill, Mayfair also with potential for redevelopment.
Both schemes will be included in the new joint venture vehicle which, together with two further retail development properties currently under contract, will take the overall end day value of CSD, initially, from 120m to 225m.
The Carlyle Group is a global private equity firm with seven real estate funds totalling $4 billion of committed capital. In Europe, Carlyle manages two real estate funds totalling 1.2 billion and focuses on off market opportunities primarily in office, logistics, retail properties, as well as hotel and residential. Carlyle has invested extensively across France, Germany, Italy, U.K., Spain, Belgium and the Nordic countries.
In the U.K., Carlyle has acquired three development opportunities: in 107 Cheapside, London, and a 64 acre brownfield site in Cumbernauld, Scotland, and 11/19 Monument Street, in addition to the CSD investments. The team has a proactive and highly selective approach to acquisitions and asset management investing in both existing structures and land for development.
Robert Hodges, Managing Director, The Carlyle Group said: The creation of the Carlyle Skelton Development Group provides us with a strong team to build on our UK investment platform where we see many interesting opportunities.
The team will combine an effective development management expertise with a strong capital base enabling us to move quickly in the market. Our existing investments with Skelton, which form the initial base of the joint venture, are proving to be very promising, and we look forward to growing this business.
Skelton was formed five years ago by Duncan Moss with the backing of a private family trust. Since that time it has grown significantly and produced very high return on capital. Skelton currently has a 120 million development portfolio and 100 million of investment properties.
Duncan Moss, Chairman of Skelton commented, The joint venture with Carlyle is a great opportunity to take Skelton to the next business level and expand our development activities alongside a truly global player. It enables us to be involved in larger schemes than might otherwise have been possible and allows us to leverage off Carlyles substantial capital base while fully exploiting Skeltons development skills and expertise.
The investment board of the Carlyle Skelton Developments Group will comprise Robert Hodges and Eric Sasson of The Carlyle Group and Duncan Moss, Chairman of Skelton and Kurt Little, Managing Director.
Source: The Carlyle Group