Regal Partners shares slide on new hotel strategy
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More news: Regal Partners shares lowered after the investment manager announced that it will partner with hotel investor Ark Capital Partners, and acquire the Mayfair Hotel in Adelaide, as part of a new hotel asset strategy.
Regal shares were down 3.2% to $2.11 at 1:30pm AEST, having retreated more than 40% since the start of the year.
Regal Partners unveils Ark Capital partnership as part of new hotel strategy
The news: Investment manager Regal Partners has acquired a 50% holding in hotel investor Ark Capital Partners as part of a new hotel asset strategy.
Regal will also buy the Mayfair Hotel, a five-star luxury hotel in Adelaide's CBD, for $75 million, in support of the strategy.
The numbers: The Mayfair Hotel purchase is expected to be funded via up to $45 million in debt from an unnamed big four Australian bank, and $35 million raised from a syndicate of external investors.
Regal paid $3 million in cash for the 50% stake in Ark.
The context: Regal said its partnership with Ark represents a "notable expansion" of its existing alternative investment platform, to include a direct alternative real estate investment capability focused on equity investments in the hotel accommodation sector.
Ark has deployed over $350 million in strategic acquisitions and initiatives across the premium hotel accommodation sector since its establishment in 2021.
Regal's acquisition of the Mayfair Hotel is expected to complete in August.
What they said: "The partnership with Ark represents a highly attractive opportunity for Regal Partners to further extend our existing investment capabilities across the real estate investment sector, supported by an attractive seed asset purchased at a significant discount to prior valuations that we anticipate will have the ability to generate strong risk-adjusted returns for our clients," said Regal CEO Brendan O'Connor.
Ark's co-founder and CEO Rahul Parrab said: "The Ark team is delighted to be partnering with Regal Partners to further grow and expand our existing pipeline of attractive acquisition opportunities across the ANZ hotel accommodation sector."
The source: ASX
