News and Announcements
Folkestone Launches Fund to Raise $23.2M for New Hotel
- Published November 23, 2017 12:00AM UTC
- Publisher Wholesale Investor
- Categories Company Updates
KEY TAKEAWAYS:
- Folkestone Funds Management (FFM) announced the launch of Folkestone Green Square Hotel Fund
- FFM seeks to raise additional funding amounting to $23.2 million to add to borrowings worth $21.75 million to purchase a 144-room hotel in New South Wales from developer GS Hotel Development Pty Ltd. (Developer)
- The Fund acquired the land for $9.4 million through a loan from the Developer.
Folkestone Funds Management Limited (FFM), a subsidiary of Folkestone Limited, has launched the Folkestone Green Square Hotel Fund (Fund) to help raise $23.2 million in fresh funding.
The amount is expected to be added to the $21.75 million in borrowings which will be used for the acquisition of a 144-room hotel in Alexandria, New South Wales. The hotel, which is strategically located along the Green Square Urban Regeneration Area, is near the Green Square Train Station, the Sydney Airport Domestic and International Terminals and the Central Station.
This early, Veiru Hotels & Suites has already signed an agreement for lease that will allow it to operate the hotel for ten years with an 8×5 renewal option. The hotel operator is associated with property developer GS Hotel Development Pty Ltd, which happens to be a joint venture be-tween Furnished Property and Folkestone Limited.
“The Sydney hotel market is experiencing strong trading conditions, and we believe the outlook is positive. Inbound and domestic tourism is expected to continue to grow, buoyed by the opening of the International Convention Centre, a lower Australian dollar and Sydney continuing to rate as a major tourism destination” Folkestone Managing Director Greg Paramor said.
Mr Paramor said the acquisition of the Folkestone Green Square Hotel Fund is consistent with the company’s strategy of “manufacturing quality real estate investment product which can be owned long-term by a Folkestone managed fund.”
Given the attractive forecast returns, as well as recent developments such as the oversubscription of the Folkestone Sydney Airport Hotel Fund, the company expects to raise the much-needed capital from its investor base.
The $9.4 million land was acquired by the Fund through a loan from GS Hotel Development Pty Ltd. The Fund is expected to repay $9 million on December 2017 and the $0.4 million balance by May 2019 which is the expected completion of the hotel.
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