Folkestone Launches its Latest Real Estate Development Fund

Folkestone Funds Management (FFM) has launched the latest in its series of real estate development funds, the Folkestone Truganina Development Fund (Fund).

FFM is seeking to raise $18.25 million to develop, in Joint Venture with ID Dohertys, a circa 690 lot residential land subdivision and 3.1 hectare neighbourhood activity centre in Truganina, Melbourne (‘Project’). The Project, known as “Elements”, will be a carefully master planned community offering a selection of housing lot sizes to suit a range of buyers.

The key investment highlights of the Fund include:

• Attractive Investment Returns – target equity IRR of 18% p.a. (post-fees, pre-tax) and a forecast return on investment of 77% (post-fees, pre-tax)
• Strategic Location – approximately 20 kilometres west of the Melbourne CBD
• Strong Demographics – located in one of Australia’s fastest growing local government areas
• Efficient Acquisition Structure – the land is being acquired on deferred terms, with final payment due October 2016.
• Relatively Low Debt – forecast peak Project debt is $16.3 million or 13.9% of forecast Total Project Costs
• Site Readiness – development approved land with construction expected to commence in February 2015
• Underwritten and Co-investment – Folkestone has underwritten the Offer and will co-invest 20% in the Fund

Truganina is located approximately 20 kilometres west of the Melbourne CBD in the West Growth Corridor, one of the key Melbourne growth corridors. The area is well serviced by transport infrastructure – the new Tarneit railway station is approximately 1.5kms to the south-west of the Project, with the Western Freeway and the Ring Road network close by.

The Project is an 80/20 joint venture (Joint Venture) between the Fund (80 per cent) and ID Dohertys Road Pty Limited (ID Dohertys) (20 per cent), an entity associated with ID_Land, an experienced, privately owned Melbourne based residential developer. ID_Land has undertaken a number of successful residential developments across Melbourne and this is the third joint venture between Folkestone and ID_Land. Folkestone will co-invest 20% in the Fund.

The Fund has an expected term of 4.5 years.

Please find attached a copy of the Folkestone Truganina Development Fund Flyer for your consideration.

I look forward to your support of the Fund.

Kind regards

ADRIAN HARRINGTON
Head of Funds Management

About Folkestone

Folkestone (ASX:FLK) is an ASX listed real estate funds manager and developer providing real estate wealth solutions. Folkestone’s funds management platform, with over $800 million under management, offers listed and unlisted real estate funds to private clients and select institutional investors, while its on balance sheet activities focus on value-add and opportunistic (development) real estate investments www.folkestone.com.au