“It’s the largest city-centre transaction Birmingham has ever seen,” says Ashley Hancox, director for real estate adviser GSD/Cushman & Wakefield, of The Carlyle Group’s £150m ($300m) investment in new class-A office space in Birmingham, UK.

The project, dubbed Colmore Plaza, is a 14-storey, 307,297-square-foot glass structure, due to come on line in April 2008.

Advertisement

Carlyle Europe Real Estate Partners II, a fully invested fund that closed in September 2005, invests in off-market opportunities primarily in office, logistics and retail properties. Among other transactions in the pan-European fund are the acquisitions of prestigious office development sites at Richelieu in Paris’s central business district, the 258,000-square-foot Brahmsquartier in Hamburg and 12 buildings in the Globen area of Stockholm.

Carlyle Europe Real Estate Partners II is managed by a team of 27, including acquisition and asset management professionals based in the UK, France, Germany, Italy, Spain and Sweden. The fund focuses on a single asset approach, but also invests in portfolios.

European investment

The Carlyle Group manages 57 funds across four investment disciplines: buyouts, venture and growth capital, property and leveraged finance. The company is especially active investing in western Europe, where in the past six years it has invested more than €2.2bn. Approximately 25% of its equity is invested in the UK.

Initially, the company invested in office developments in London, then 18 months ago began rolling out a regional strategy.

“As an investor and a developer, that’s where we believe will be the most more compelling and potential growth,” says Robert Hodges, UK managing director of The Carlyle Group.

So far, The Carlyle Group has invested in office buildings in Bristol, Manchester, Edinburgh, Oxford and Birmingham. The company believes Colmore Plaza in Birmingham fits in perfectly with its business plan. More than £9bn has been invested in the city in the past decade and £14.4bn is already planned for the next 10 years. The city is attracting increasing national and international interest.

“Its livability is its biggest factor of change. Bars, clubs, nightlife and retail all have an impact on the office market, ” says Mr Hancox.

Business hub

Birmingham’s professional and financial sectors, which employ more than 100,000 people, have seen particularly strong growth in the past five years, making Birmingham, by some measures, the largest business community outside London. It is now home to about 200 law firms, 50 major properties services firms and one of Europe’s largest insurance markets.

Among them are PricewaterhouseCoopers, Ernst & Young, Royal Bank of Scotland, Barclays Bank, Fortis Bank, the State Bank of India and Allied Irish Bank. Public consultants Davis Langdon were the first to sign on as Colmore Plaza tenants.

“What partially drove us to Birmingham was a marketing strategy to have the best building outside of London,” says Mr Hodges.

The building features a modular glazed façade, floorplates of 23,000 square feet – the largest in Birmingham – and uninterrupted and stunning panoramic views of the city. It will be the city’s first ‘intelligent’ building.

“We have used innovative designs and technology to add the extra allure that modern business occupiers are seeking,” says Mark Harris, associate director of The Carlyle Group. “This is the kind of service that Birmingham must provide to prospective tenants to ensure that high profile investment continues.”

More than that, Colmore Plaza will become an iconic building, given its presence at the end of Colmore Row.

“It shifts the emphasis of Birmingham’s central business district largely around it,” adds Mr Hodges. “We don’t see why Birmingham should have anything less.”