Inn On The Square, the contemporary business and leisure hotel was sold to African Hotel Development Cape Town, which is part of the Onomo Hotel Group, for a total cash consideration of R157 million on 10 October 2016.

Inn On The Square is an economy hotel located adjacent to the Greenmarket Square in the central business district of Cape Town and is managed by aha Hotels & Lodges (“AHA”), a subsidiary of the Tourvest group.

The hotel consists of 165 rooms, the Dish Restaurant, the Cigar Lounge and Bar, a small outdoor swimming pool, as well as a small fitness centre.

It is expected that registration of transfer of the property will take place during November 2016, subject to the fulfilment of the conditions precedent below.

AHA will continue to manage the property and business on behalf of AHDCT in terms of the current Fixed and Variable Lease Agreement (“F&V Lease”) until 30 April 2017 after which the F&V Lease will terminate.

The Disposal Consideration, which is receivable in cash on the effective date will be held in a cash account and will either be utilised by Hospitality towards future acquisitions or to settle a portion of the R600 million notes expiring in February 2017, either of which are better aligned with the overall strategy of the Fund.

An independent valuation of the IOTS was conducted by JHI (Gensec Property Services Limited), who attributed a value of R106 million to the IOTS as at 30 June 2016. The Disposal Consideration represents a 36.8% premium to the open market value.

The implementation of the Disposal is subject to the fulfillment by Propco, or waiver, as the case may be, of the written consent from Hospitality Guarantee SPV (Pty) Ltd to release the immovable property as a security and cancel the mortgage bonds on the immovable property.