Grapnel Property Group and Horwath Tourism and Leisure Consulting, today announced the results of the Hospitality Property Fund Limited (Hospitality) private placement.

The private placement of Hospitality Property Fund A and B linked units was in respect of R512 million if fully subscribed. Applications received exceeded R3,8 billion, nearly eight times the amount of offer.

“The tremendous success of this application reflects strong market support for this specialised listed property vehicle, particularly given its private place status as opposed to an initial public offering,” affirms Gerald Nelson, MD of Grapnel Property Group.

Hospitality Property Fund is South Africa’s first specialist listed property fund invested exclusively in the hospitality sector with a portfolio of 16 landmark hotels, independently valued at R1,11 billion, including Mount Grace Country House & Spa, Champagne Sports Resort, Birchwood Executive Hotel and Conference Centre, Radisson Hotel Waterfront, Courtyard Hotels in Arcadia, Rosebank, Sandton, Cape Town and Eastgate and Protea Hotels East London, Port Elizabeth and Richards Bay.

The allotment process undertaken permitted BEE shareholders preferential allocations and thereafter equitable allocation was applied.

Grapnel, which has assets in excess of R4 billion under management, including blue chip property unit trust Sycom, conceptualised the assembly and listing of a specialised hospitality-focused property fund in early 2004 and approached Horwath Tourism and Leisure Consulting to work as co-promoter to the fund and provide a supporting role as expert hospitality and industry consultants.

“Hospitality will provide investors with the benefits of exposure to both the property and the hospitality sectors in South Africa through the ownership of a portfolio of hotels which provides diversification in terms of geographic location, star grading, fixed and variable income, lease expiry profile, market mix and brands,” points out Nelson.

“The outlook for the hospitality sector is positive with tourism identified as the fastest growing industry in South Africa,” explains Joseph Aminzadeh of Horwath Tourism and Leisure.

Listed property was the top performing asset class of 2005 and has grown from a market capitalisation of R13 billion to R60 billion over the past three years. It has outperformed equities, bonds and direct property ownership and there is currently strong institutional support and investor demand for listed property.

Hospitality Property Fund is set to list on the JSE Limited in the ‘Financial – Real Estate Holdings and Development’ sector in mid-February 2006 and will trade under the short names ‘Hosp A’ and ‘Hosp B’.

Source: eProp - www.eprop.co.za

Get commercial property news by email

Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »