Skelton and The Carlyle Group acquire Waterloo Development (UK)

The Carlyle Group and Skelton Group, through its Skelton Developments subsidiary, have announced they have agreed to acquire a 58,000 ft² office building in central London close to Waterloo Station for £15m from the Church Missionary Trust Association.

Occupying a 0.57 acre site on Waterloo Road, SE1 only 300 metres from the mainline station, the fully rent-producing 1960's building is being jointly acquired by Skelton Developments and The Carlyle Group through its European real estate fund, Carlyle Europe Real Estate Partners II. The partners plan to develop the site over the next few years into hotels, subject to planning permission.

The purchase is subject to a leaseback of the entire building to the Church Missionary Trust Association Limited at an annual rent of £937,500 for a 12 month period.

Kurt Little, Skelton Developments Managing Director, said: "The building provides us with a fantastic development opportunity. Its location makes redevelopment into hotel accommodation very attractive and we have already had strong expressions of interest from several hotel operators. And while we finalise plans for the site, we are receiving a well secured income stream."

Robert Hodges, Managing Director, The Carlyle Group said, "We are delighted to be investing in this asset. We believe that the hotel market is very strong in London and that the location is ideal for a hotel development with excellent transport links. We look forward to working with Skelton Developments on this asset."

Skelton has drawn up development plans that include the potential for creating two adjacent hotels. It is anticipated the scheme would have a development value of £65m.

Apart from its proximity to the mainline station, the site enjoys the benefits of being close to a major transport hub which includes three key underground lines – Bakerloo, Northern and Jubilee, with the latter providing direct links to both the West End and the main 2012 Olympics venues. It also has easy access to the South Bank's varied cultural attractions.

Skelton and Carlyle were advised by King Sturge and Creswell Estates while the vendor, the Church Missionary Trust Association, was represented by Atis Real.

Source: The Carlyle Group

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