Hospitality is South Africa’s first specialised listed property fund invested exclusively in hotels and resorts and is managed by Hospitality Property Fund Managers, a joint venture between property fund managers Grapnel Group and hotel specialists Horwath Tourism and Leisure. The purchase consideration will be settled by the placement of an equal portion of “A” and “B” Hospitality linked units on behalf of the vendors.

“The acquisition is in line with the Hospitality’s objective of growing the asset base in a controlled manner which ensures enhanced liquidity, critical mass and risk diversification,” says Gerald Nelson of Grapnel, who has been appointed as the new CEO of Hospitality, effective 1 November 2006, after the resignation of Bruce Hutchison due to personal health reasons. Youseph Aminzadeh of Horwath will take up the reigns as Deputy CEO.

The 172 room hotel on the fringe of the Victoria & Alfred Waterfront is expected to be transferred to Hospitality in mid-November. All conditions of the sale have been fulfilled. Protea Hotel Victoria Junction’s lease agreement is of the Hospitality’s C-Corp type, comprising approximately 50% fixed lease rental with the remainder being a variable rental relating to the hotel’s earnings. The fixed lease portion is set to escalate at CPIX.

Hospitality is also exploring the opportunity, through the renouncement of these units, to enhance its BEE ownership. This will increase the BEE shareholding from the current level of 12.5% to 22.9%. Based on current pricing, the intention is to issue the units at an 8% discount.

This acquisition brings the number of assets in Hospitality’s portfolio to 17 hotel and resort properties 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 in Port Elizabeth and Richards Bay.

“Hospitality is actively pursuing a number of new acquisitions and will continue to grow its portfolio of landmark hotel properties,” says Nelson.