Folkestone Announces to Sell Wollongong Asset and Wind-up Fund

Folkestone Funds Management as Responsible Entity for the Folkestone Real Estate Income Fund at Wollongong has announced that Unitholders today overwhelmingly voted1 in favour of the sale of the Fund’s sole asset, 43 Burelli St, Wollongong, and the windup the Fund.

The Property is a six level A-Grade office building comprising 9,688 square metres together with parking for 86 vehicles. The Property comprises a strong tenancy mix anchored by Commonwealth and State Government tenants who currently contribute more than 50 per cent of the Property’s income.

The Property has been sold for $46.1 million, a 67.5% premium to the April 2013 $27.5 million acquisition price (adjusted for the capital expenditure since acquiring the Property) and a 33.6% premium to the last independent valuation at 30 June 2016. The Property has been sold to a private investor.

Folkestone’s Managing Director, Mr Greg Paramor, said “We have undertaken an extensive refurbishment program, increased the Property’s NABERS energy rating from 1 Star to 5 Star and renewed a number of leases including the Department of Human Services lease until 2021. Given the strong demand for high quality office assets from both domestic and international investors, we decided to take advantage of the strong market and sell the Property ahead of the Fund’s expiry in 2019.”

“The sale price reflects an excellent result for our investors who will receive approximately $1.80 for each $1.00 invested and an internal rate of return of 23.6% per annum (post fees, pre-tax) since inception of the Fund four and half years ago. The result validates Folkestone’s active management of its unlisted funds on behalf of its investors” said Mr Paramor.

Folkestone Funds Management will receive a performance fee of approximately $2.9 million in November 2017 when the Property settles and the Fund is wound up.

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s