Folkestone's Folkestone Funds Management Ltd. subsidiary signed an agreement to purchase the AccorHotels-operated Mercure Sydney International Airport Hotel for A$76.4 million, excluding costs.
The 271-room hotel, which was acquired on behalf of the company's new Folkestone Sydney Airport Hotel Fund, is roughly 1.0 kilometer away from the Sydney Airport International Terminal, according to a release. Folkestone intends to renovate and improve the asset's appearance to boost its revenue and occupancy, with work expected to begin in 2018.
The fund has secured underwriting commitments worth A$31.9 million, out of which A$15.0 million will be provided by Folkestone, and a debt facility of A$49.4 million from an Australian bank to help finance the hotel deal.
Additionally, the Folkestone subsidiary is planning to raise A$50.0 million in an offering expected to launch on or around Oct. 23.