GI Partners provides UK RE grandee with £150m war chest

A start-up real estate investment firm, led by former Lend Lease Europe chairman Nigel Hugill, will receive investment capital from the US- and Europe-focused private equity firm’s recently closed $1.9bn Fund III.

GI Partners has backed the launch of Urban & Civic, a UK land and real estate investment firm led by former Lend Lease Europe chairman Nigel Hugill and deputy chairman Robin Butler.

The pair resigned from their positions in September and have set up Urban & Civic with a view to acquiring strategic land or existing real estate in the UK “of metropolitan or regional scale” in order to improve the assets through development.

Hugill and Butler have a background in redevelopment having worked on projects in areas including Stratford, which will host the 2012 Olympic Games, Elephant & Castle and Westfield White City in London.

The firm will be supported with capital from GI Partners’ latest private equity fund, GI Partners III, which closed in October on $1.9 billion and invests in both private equity and real estate deals. The firm will be provided with up to £150 million ($252 million; €168 million) from the fund, to be supplemented with debt as and when needed.

Although in this case GI Partners has taken a majority stake in Urban & Civic in advance of the firm acquiring a sizable portfolio of assets, typically, its real estate deals relate to private equity businesses the firm is building, Mark Tagliaferri, GI Partners executive managing director, recently told sister site PEO. In the past, for example, the firm has purchased vacant nursing homes in Europe that were later turned into part of the assets of a psychiatric care portfolio company.

GI Partners has also in the past, however, financed and created a publicly listed real estate investment trust, Digital Realty Trust. Established post dotcom collapse, the REIT went on “to become one of the best performing US REITs following listing on the NYSE in 2004, with a current market value of over $6 billion”, the firm said in a statement.

Urban & Civic has kicked off with the £27.5 million ($46 million; €30.8 million) purchase of a 1,100 acre plot 24 miles from Cambridgeshire. The plot, a former airfield declared surplus to requirements by the Ministry of Defence in 1995, houses more than 100 buildings including industrial and aircraft hangers as well as warehousing and office space.

The firm said it is “working on a pipeline of other prospective acquisitions and expects to make further announcements in due course”.