Carlyle Real Estate in UK debut

Investing from its European real estate fund, the US private equity firm has paid £67m to complete its first acquisition in the UK real estate market.

Carlyle Real Estate Partners, the real estate unit of the US private equity firm established in 2001, has completed its first UK acquisition, paying £67m to AXA Sun Life for the leasehold of 107 Cheapside, a property situated in London.


The investment is the first to be made in the UK from Carlyle Europe Real Estate Fund, the firm’s Europe-dedicated opportunistic property investment fund which has so far raised E350m and is thought to be targeting a final close of E500m at the end of the year. The fund will invest in mid-sized properties in the office, industrial and retail sectors.


107 Cheapside includes 125,000 sq ft of office space and 50,000 sq ft of retail space. The property is currently 95 per cent leased, but Carlyle expects that the property’s office space should become partially vacant over the next three years. Carlyle said that part of the acquisition strategy would see the firm refurbish the property in the medium-term when office space will be released. 


To date, the Carlyle Europe Real Estate Partners fund has invested in 14 transactions in France, Germany and Italy.


The fund’s most significant transaction was completed in March, when the firm acquired a portfolio of 36 commercial properties in Italy from the Italian ministry of finance. The deal saw the firm pay E230m for the assets, which cover a total of 290,000 square metres.


“We have made some good investments in France, Italy and Germany, and I am very pleased to be making a footprint in the UK market,” said Eric Sasson, a managing director of The Carlyle Group, who heads up the firm’s European real estate team. “We make each investment decision with a single asset approach but we hope to make more acquisitions in the UK over the coming months.”


Carlyle’s legal advisers on the London transaction were Herbert Smith. GVA Grimley also advised. Financing was provided by EuroHypo.