Carlyle moves into European property

The private equity firm says it will get returns of more than 20 per cent.

The Carlyle Group is set to launch its first European real estate fund.

Carlyle will invest its E500m fund in commercial properties in France, Germany and Italy.

The Washington-based private equity firm aims to harness growing appetite for property assets from institutional investors on both sides of the Atlantic.

According to Carlyle, higher property yields are possible because Europeans do not manage their real estate as aggressively as they could.

Property in Europe is also attractive because European cities are only now coming out of the property recession of the early 1990s. Carlyle says Rome, Dusseldorf, Lyons and Berlin are all on the up.

The private equity firm is confident it can deliver returns of more than 20 per cent by investing early in the property upswing.

Eric Sasson will lead a 14-strong team to run the fund. Sasson used to run LaSalle Investment Management in France, part of property firm Jones Lang LaSalle.

Carlyle’s move follows in the footsteps of Doughty Hanson, the European buy-out firm, which closed an E704.8m fund for Europe last summer.