Where Carlyle is found wanting, Blackstone rocks in real estate

New York

FIFTY kilometres south of London, residents of Tunbridge Wells are disgusted. Their ire is directed at Carlyle Group, which with Bellhouse Joseph Ltd bought a dilapidated cinema building in 2011 and then failed to develop the site. Ben Chapelard, a member of the local government, described it as the area's greatest "grot spot" and more than a fifth of the town demanded that the building be torn down. Two months after demolition, the lot sits empty, surrounded by blue construction boards.

The Washington-based firm's investors are also frustrated with Carlyle's international real estate efforts. One European property fund, which started before the financial crisis, has lost 80 per cent in value after ill-timed deals in the U…