The Carlyle Group has bought three sites earmarked for student housing for £46m through its €2.2bn European real estate fund CEREP III.
The global asset manager purchased the sites, which include former concert venue Hammersmith Palais, a property on Ewer Street in Southwark and a site on Goswell Road in Islington, through its joint venture with Generation Estates after receiving planning permission.
Generation will be responsible for the development process 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.
The three new developments, which will provide around 1,400 beds in total, are expected to be delivered and ready for occupation during 2013 and 2014.
Including Carlyle’s Isledon Road project, which was acquired in September 2010 and will be ready for occupation in August, ahead of the 2012-13 academic year, these new acquisitions extend Carlyle’s total capacity to around 1,800 beds in London, with a total development value of around £300m.
Carlyle also has a Benelux-focused student accommodation joint venture with City Living in the Netherlands, which was formed in October 2009.
Robert Hodges, managing director Carlyle European Real Estate, said: “These three new sites fit with our strategy of developing high-quality, well priced student accommodation within easy reach of major academic institutions, and mean that, along with our existing projects which will be ready for occupation later this year, we are starting to gain some real critical mass in the London market.
“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.
“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.”
bridget.oconnell@estatesgazette.com
