Asset injection by gaming giant invigorates Hospitality’s performance
Hospitality Property Fund (HPF) has undergone a substantial transformation in the past nine months, with Tsogo Sun taking over the group and injecting an assortment of 10 hotels into it. The company is now a bellwether for SA’s hotels and hospitality sector.
The group declared a distribution of 44.92c per share for the three months to the end of March 2017, resulting in a total distribution for the nine months to March of 101.01c per share, financial results showed on Wednesday. Distributable earnings rose 56.8% to R345m compared with the nine months to March 31 2016.
HPF now owns 24 properties from 15 on June 30 2016. It has a market capitalisation of about R4.7bn and is the only property company listed in SA that is focused on hospitality.
Last week, Tsogo Sun said it had agreed to sell 29 more hotels to HPF for R3.6bn.
Since Tsogo took over HPF in 2016 and injected a slew of assets, the company’s fortunes have improved substantially.
The fund’s hotel properties are predominantly located in the Western Cape and Gauteng, and these properties generate more than 75% of the fund’s rental income.
The Western Cape properties, mostly in central Cape Town, performed well during the reporting period. Room occupancy grew 4.8% to 71.1% while the average daily rate grew 7.4% to R1,751 and resulted in revenue per available room growth of 12.6% to R1,245.
Occupancy in Gauteng properties increased 1.9% to 60.4%. The average daily rate grew 4%, resulting in revenue per available room growth of 6%.
Tsogo CEO Marcel von Aulock said HPF’s name would change. After Tsogo became a majority shareholder, the board proposed to change the name from Hospitality Property Fund to Tsogo Sun Property Fund.