Sirona Capital Launches its Latest Real Estate Investment Fund

Wednesday, 18 May 2015

Sirona Capital (Sirona) has launched a second round capital raise for one of its real estate investment funds, the Pakenham Street Investment Fund (Fund).

Sirona is seeking to raise $2.365 million to facilitate the development of a 120 key, 4 ½ star apartment hotel in Fremantle (Development) underpinned by a 15+ year lease to Quest, Australia’s leading apartment hotel operator. These funds are additional to the first round capital raise of $9.675 million which enabled the acquisition of the development site and pre-construction works to be undertaken.

The key investment highlights of the Fund include:

• Attractive investment returns – forecast income distribution of 13.0% p.a. (average and post fees, pre-tax) over an 8 year term, with distributions paid quarterly following completion of the Development
• Prime CBD location with an established tourism market – strategically located in the historic “West End” heritage precinct of Fremantle, a strategic metropolitan centre with a long established commerce and tourism economy
• Undersupply of hotel rooms – the local hotel market is experiencing an acute supply shortage and leads the nation of key industry metrics (occupancy and RevPAR)
• Strong leasing covenant – 15+5+5+5 year lease with 4% fixed annual escalation, underwritten by a Quest corporate guarantee
• Development risks mitigated – all planning approvals have been obtained, a well experienced builder has been appointed under a fixed price contract and pre-construction works completed
• Construction finance in place – credit approved senior construction and term debt facilities in place with a leading Australian commercial bank
• Barriers to entry – significant land, planning and financing barriers for new market entrants limiting supply side competition

The Fund has an expected term of 8.0 years.

Please find attached a copy of Sirona’s Pakenham Street Investment Fund flyer for your consideration.  A full investment information memorandum is available on request.

To download the additional document, please click on the link below.