Hospitality Property Fund acquires Radisson Blu Gautrain hotel for R443m

Posted On Thursday, 18 April 2013 11:36 Published by eProp@News
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Hospitality Property Fund says HPF Properties has entered into a new sale agreement with Savana Property to acquire 100% of the Radisson Blu Gautrain hotel in Sandton for R443.385m.

Hospitality Property Fund acquires Radisson Blu Gautrain hotel for R443mHotel-focused property loan stock firm Hospitality Property Fund said on Wednesday its wholly owned subsidiary HPF Properties or Propco had entered into a new sale agreement with Savana Property to acquire 100% of the Radisson Blu Gautrain hotel in Sandton for R443.385m.

 “Based on its anticipated trading performance and cost of funding‚ the property is expected to be earnings enhancing for HPF‚” Hospitality Property Fund said.

 
This follows the cancellation of the December 14 sale agreement in which Propco said it would acquire a 78.2% share of Radisson Blu Gautrain and 53 parking bays for R346.745m from Savana Property.
 
The company’s focus over the last past two years has evolved towards enhancing the quality of its assets. It has applied a two-fold approach of actively pursuing opportunities to acquire large hotel properties in major metropolitan areas with diverse source markets and strong brands while disposing of noncore properties that do not fit this profile.
 
The property is projected to yield approximately about 8.15% in year one with growth in rental for year two expected to be approximately 15%. This growth is underpinned by a limited rental guarantee from the seller for the first two years of trading following registration of transfer. Radisson Blu Gautrain is made up of various sections of the sectional title scheme known as Sandton Eye and comprises 216 rooms‚ 8 eight conference facilities‚ the Central One Restaurant and Bar‚ an outdoor bar and swimming pool‚ as well as a fitness centre.
 
Subject to the necessary bank guarantees being issued‚ the conditions precedent to the revised acquisition have all been fulfilled and registration of the property is expected during May. The total purchase consideration will be funded by a R275m vendor consideration placement‚ the issuance of R150m secured notes and the private placement of R18.4m unsecured notes.
 
In February‚ Hospitality Property Fund said the A-linked unit distribution amount for the six months to December last year grew by 5% to 66.51c‚ in line with the fund's distribution structure‚ while the distribution on the B-linked unit showed an increase of 16.2% to 9.19c compared to the previous corresponding period.
 
The fund said industry statistics had confirmed the recovery trend in the hospitality market that had commenced about 12 months ago‚ with growth in occupancies and room rates matching levels last seen prior to the global downturn in 2008.
Last modified on Monday, 20 May 2013 13:13

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