Carlyle this week completed two deals with a value of more than £750m as the private equity firm continued a spending spree of equity from its third European property fund.
The company has made its first foray into UK student accommodation through a joint venture with sector specialist Generation Estates, which will see it develop a portfolio of four initial schemes with an end value of £350m, totalling 1,850 beds.
This week, it also completed the purchase of European hotel chain B&B Hotel Group for €480m (£413.4m). B&B operates 223 budget hotels across France, Germany and Italy. Equity for the deal came from Carlyle’s €5.4bn Carlyle Europe Partners III buyout fund, as well as the €2.2bn Carlyle Europe Real Estate Partners III property fund.
The deals come after Carlyle bought the Thames portfolio of London offices, part of the break up of Simon Halabi’s London office portfolio, for £671m earlier this year.
The student accommodation jv will roll out a concept called “City Living”, which Carlyle debuted in the Netherlands in 2009, and which will also be used in Paris in the near future.
Its first acquisition is a 0.9-acre site in Finsbury Park, N1, which has planning permission for a scheme featuring 400 beds and 15,450 sq ft of commercial space. It has also agreed to acquire a further three sites in London, once planning permission is achieved in 2011.
Robert Hodges, managing director of Carlyle Real Estate Europe, said: “We have been aware of the attraction of student accommodation for some time, given the strong fundamentals of the market, particularly the ongoing supply/demand imbalance in the UK.
“The new joint venture follows our entry into the student accommodation market in the Benelux region in October last year.”
He added: “The Isledon Road site fulfils our investment criteria of being well-located near to universities and transport connections in an area that has a strong supply/demand imbalance.”
Jones Lang LaSalle Corporate Finance advised Generation Estates.
mike.phillips@estatesgazette.com
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