This article is from the Australian Property Journal archive
FOLKESTONE has acquired the Mercure Sydney International Airport Hotel for $76.4 million, as it looks to further entrench itself in the sector and capitalise on growing tourism numbers.
It will place 271-room asset into its newly established Folkestone Sydney Airport Hotel Fund, as it nears the launch of its Folkestone Green Square Hotel Fund for a hotel and commercial building it is developing in partnership with Furnished Property in nearby Alexandria.
The Sydney Airport hotel is operated by Accor Group and will undergo a refurbishment and repositioning program that will include works on guest rooms, function and conference areas, and bar and restaurant on the ground floor, as well the façade and plant and equipment.
“The Sydney hotel market remains strong, driven by both domestic and inbound tourism, growing corporate travel and a buoyant conference and exhibitions market which has been enhanced following the opening of Sydney’s new International Convention Centre,” Folkestone managing director, Greg Paramor said, adding that the group believe there continues to be strong demand from investors for quality hotel investments in the city.
A report from the Australian China Business Council this week forecast Chinese tourist numbers to more than triple in from the one million seen in 2016 to around 3.3 million by 2026.
Folkestone has been preparing its Green Square Fund since late last year, after acquiring the 18 O’Riordan Street site with accommodation provider Furnished Property.
It is developing a 5,810 sqm 142-room hotel, office and retail building within the $13 billion, 278-hectare urban renewal precinct, positioned just 100 metres from the Green Square train station that takes passengers to both the airport and CBD.
Folkestone’s is looking to fund its latest acquisition with a $50 million raising, with underwriting commitments currently totalling $31.9 million, $15 million of which will be provided by Folkestone, and a $49.4 million bank debt facility that will cover the balance, inclusive of a $15 million short-term debt facility the $50 million raising.
It expects the offer will launch on or around October 23rd.
Australian Property Journal
