Private equity firm The Carlyle Group has entered the UK residential market with the GBP40m acquisition of a development site in the heart of Chelsea in a 50:50 joint venture with the Athos Group.
The acquisition, on behalf of Carlyle’s third European fund, Carlyle European Real Estate Partners III, will look to capitalise on a central London market which has proven resilient during the economic downturn.
The site is expected to benefit from continued strong demand due to a shortage of new build luxury apartments in the area.
The site, the former Chelsea College of Arts, which fronts on to both Manresa Road and Dovehouse Street, is located in of one of London’s most exclusive residential areas, close to the King’s Road.
Planning consent has been granted by The Royal Borough of Kensington and Chelsea on the 0.32 acre freehold site for 58,000 square feet of residential accommodation, consisting of 15 luxury apartments, two villa houses, and 38 secure parking spaces.
As part of the development Carlyle and Athos will undertake a number of infrastructure improvements to the local park, educational facilities and public art in the nearby vicinity.
Construction is set to start in Q4 2010 and finish in the summer of 2012.
Carlyle will work with Athos Group and development advisers who have experience in developing high-end residential projects in London, with recent developments including Albert Bridge House in Battersea and 268 luxury properties in Richmond.
Robert Hodges, managing director, The Carlyle Group, says: “This is Carlyle’s first residential acquisition in the UK and we believe that Manresa Road represents an excellent opportunity to invest in an asset class which, has proven its resilience over the course of the recession and is set to benefit from the continued strong demand for high end accommodation in one of the most sought after locations in London. Our joint venture partner, the Athos Group, has extensive experience in this type of development and will be working closely with our own in-house expertise, to deliver a high quality, desirable product in an improving residential market.”