Hospitality sees lower FY total distributions

Posted On Monday, 13 June 2011 02:00 Published by eProp Commercial Property News
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Hospitality Property Fund (HPA/HPB) said that trading conditions in the hotel industry remained challenging due to the continuing effects of restrained demand and oversupply of available room stock.

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The property fund said these had resulted in widespread discounting of rates. Substantial increases in overhead costs arising mainly from administered prices further continued to erode margins.

Therefore, the company expected full year total distributions for the year ended June 2011 to be 25% lower compared with the same period last year.

The fund's units in issue comprise A- and B-linked units. The A-linked units distribution were 116.30 cents last year, while distributions in respect of the B-linked units were 87.98 cents.

"In addition, the number of public holidays in April, and to a lesser extent May, severely impacted on corporate and conferencing business during these months. Given that the prior year comparative included the World Cup period in June 2010, and based on information currently available, the directors expect the fund's total distributions for the six months to June 2011 to be at least 25% lower than the distributions in the previous year," the fund said.

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