Carlyle bags 3 student housing units for EUR 55m

Global alternative asset manager, The Carlyle Group has strengthened its position in the London student accommodation sector through the acquisition of three sites, for a combined £46 mln (EUR 55 mln).

Carlyle has acquired the sites, which include Hammersmith Palais, the former concert venue and nightclub, a property on Ewer Street in Southwark and a site on Goswell Road in Islington, through its joint venture with Generation Estates. Generation will be responsible for the development of the sites, which have all received planning permission, and will ultimately manage the completed properties under a new student accommodation brand, which is to be launched in the second quarter of this year.

Carlyle and Generation aim to create a London portfolio of 4,000-5,000 beds over the next five years. Carlyle is investing through its third European real estate fund CEREP III, which raised EUR 2.2 bn of equity in 2008.

The three new developments will provide 1,400 beds in total and are expected to be delivered and ready for occupation during 2013 and 2014. In addition to Carlyle's Isledon Road project, these new acquisitions extend Carlyle's total capacity to 1,800 beds in London, with a total development value of around £300 mln. Carlyle also has a Benelux-focused student accommodation joint venture with City Living in the Netherlands, which was formed in October 2009.

'We remain convinced that the imbalance of supply and demand in the student housing market in London makes it an attractive investment proposition, regardless of changes to university funding; particularly as we believe supply will become further constrained by both the lack of availability of suitable development sites in London and the difficulty of subsequently getting schemes through the planning process,' said Robert Hodges, managing director of Carlyle European Real Estate. 'We will continue to seek similar suitable development sites and look for further relationships with both private sector educational providers and other universities, who are increasingly looking to partner with private companies to ensure they can fulfil their requirements at a time when public finances are limited.'