Carlyle consortium drops out of London development bid

The private equity firm was bidding alongside local operating partner Development Securities to develop at London’s Shell Centre in a £300m deal, but another consortium involving Canary Wharf Group backed by Qatar are now reportedly favourites.

The Carlyle Group and UK property company Development Securities have reportedly pulled out of a competition to buy a £300 million (€341 million, $483 million) development site from oil giant Shell in London which would have seen it develop a scheme of up to 2 million square feet.

Private equity and real estate firm Carlyle and London-listed Development Securities were interested in partnering Shell in the huge redevelopment project at the oil firm’s Shell Centre on the south side of the River Thames, but Property Week magazine reported that Canary Wharf Group backed by Qatar is now favourite to land the partnership deal instead.

The eventual partner of Shell is expected to develop a property on a 5.25 acre site. While the eye-catching 1950s Shell Centre tower would be retained, Shell’s selected partners would knock down three other buildings on the site and create up to 2 million square feet of residential and office space.

Carlyle’s interest in such schemes is noteworthy as it constitutes an example of the kind of large London assets it wants to invest in.

In a recent interview, Robert Hodges, managing director of European real estate, told PERE its answer to the competition for prime central London assets coming up for sale was to tend towards involvement in larger, more complex situations.

At the time of the interview, Carlyle was also in contention to take on a major development in New Covent Garden.