LONDON-The New York City-based Carlyle Group is rapidly expanding its investment in the UK and has formed a euro 1.1-billion ($1.3-billion) joint venture with the Skelton Group to do so. The joint venture, called Carlyle Skelton Development Group, aims to buy both commercial and residential properties. About euro 217 million ($258.80) of the euro 1.1-billion ($1.3-billion) fund will be equity from each of the joint venture partners.

Carlyle managing director Robert Hodges says CSDG combines development-management experience with a strong capital base so that the group will be able to move quickly to take advantage of opportunities in the market. Duncan Moss, chairman of Skelton, says the joint venture with Carlyle will enable Skelton to participate in larger projects than otherwise would have been possible.

The investment board of the CSDG comprises Hodges and Moss as well as Carlyle managing director Eric Sasson and Skelton managing director Kurt Little. The joint venture fund includes two properties Carlyle and Skelton acquired together: one is a 58,000-sf office located on Waterloo Road, London, which is to be turned into two hotels, and the other is a freehold 41,000-sf office in Hay Hill, Mayfair, which is to be redeveloped to provide more office accommodation while maintaining the existing retail accommodation.

In addition to the joint venture properties, Carlyle has three developments in the UK: 107 Cheapside, London; a 64-acre brownfield site in Cumbernauld, Scotland; and 11/19 Monument Street.

Skelton was formed five years ago by Moss with the backing of a private family trust. Skelton currently has a euro 173.6-million ($207-million) development portfolio and euro 144 million ($172.5 million) of investment properties.

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