Folkestone Limited (ASX: FLK) Settles the Procurement of Sydney Airport Hotel

KEY TAKEAWAYS:

• The procurement of Mercure Sydney International Airport Hotel has been settled by a subsidiary of Folkestone Limited (ASX: FLK)
• The purchase has been settled at the cost of $76.4 million, which excludes the transaction costs.
• The acquisition of Sydney Airport Hotel will offer investors the opportunity to invest in a well-located hotel with a high forecasted Internal Rate of Return.

Mercure Sydney International Airport Hotel, a 271 room hotel situated about 3.0 km from Sydney Airport Domestic Terminal, 9.0 km from Sydney CBD and a kilometre from Sydney Airport International Terminal has been successfully secured. This procurement has been settled by Folkestone Sydney Airport Hotel Fund, a subsidiary of Folkestone Limited, at the cost of $76.4 million, which excludes the transaction costs. Folkestone Limited (ASX: FLK) is an ASX-listed real estate funds manager and developer with 1.18 billion funds under management.

The Mercure Sydney hotel boasts a variety of revenue mix that constitutes corporate, leisure, local and overseas tourism as well as airline crew. Three weeks following its launch, the Fund closed following an oversubscription. It has managed to secure commitments of $50 million from various high net worth family offices and investors.

Famous as a real estate funds manager and developer, Folkestone offers solutions to real estate and wealth. Folkestone Funds Management platform is renowned for its listed and unlisted real estate funds, which it provides select institutional investors as well as its private clients. The platform has $1.3 billion under management.

According to Greg Paramor, Folkestone’s Managing Director, “The success of the capital raising demonstrates the depth of Folkestone’s investor relationships and their appetite for quality real estate investments.”

“The Folkestone Sydney Airport Hotel Fund offers investors the opportunity to invest in a well-located hotel which Folkestone plans to refurbish and reposition and is forecast to generate an equity IRR of 14.4 percent per annum (post fees, pre-tax) over the life of the Fund,” said Mr Paramor.

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