Hotel Property Investments (ASX:HPI) buys six hotels

• Six Australian Venue Company (AVC) leased hotel freehold assets have been sold to the continually acquisitive Hotel Property Investments (HPI)
• The six hotel properties totalling $32.7 million are all located in Queensland and will be given new 20-year leases by AVC, representing a weighted-average yield of 7.75 per cent
• The listed pub landlord is nearing a $1 billion property portfolio, with 47 pubs on the cards for a value of $850 million reported in its latest half-year results
• Pub brokers HTL said the sale of the six hotels to HPI ensures the national hotel transaction volumes for the current financial year will exceed the $1.3 billion record high of FY2019
• HPI shares are unchanged at $3.19 at 1:23 pm AEST

Six Australian Venue Company (AVC) leased hotel freehold assets have been sold to the continually acquisitive Hotel Property Investments (HPI).

The six hotel properties totalling $32.7 million are all located in Queensland and will be given new 20-year leases by AVC, representing a weighted-average yield of 7.75 per cent.

“The acquisition of these assets demonstrates HPI’s strong relationship with AVC and our ability to transact efficiently to the benefit of all parties,” HPI CEO Don Smith commented.

The listed pub landlord is nearing a $1 billion property portfolio, in their half-year results the company had 47 pubs on the cards for a value of $850 million.

Since then the company has acquired a further seven properties, pushing their portfolio close to $900 million across 52 properties.

Pub brokers HTL said the sale of the six hotels to HPI ensures the national hotel transaction volumes for the current financial year will exceed the $1.3 billion record high of FY 2019.

It also said the deal highlights the national footprint such deal activity now encapsulates.

“Sydney publicans have typically looked North to Queensland when local opportunities have been limited, but with Merivale’s latest incursion into Victoria with over $80m worth of assets already acquired, we are witnessing a shift in the lens through which the national market is now being viewed by the leading players” advised HTL Property managing Director Andrew Jolliffe.

“As such, HPI’s svelte acquisition of these geographically strategic properties, indexed to such a strong lessee covenant, applies further rigidity to the long term trajectory the asset class is enjoying,” Jolliffe concluded.

The recent acquisitions include Surf Air Hotel ($10.45 million), Commonwealth Hotel, Clermont ($3.06 million), Grand Hotel, Clermont ($2.78 million), Capella Hotel, Capella ($3.34 million), Commonwealth Hotel, Roma ($9.78 million) and White Bull Tavern, Roma ($3.25 million).

Surf Air Hotel was settled this month, with the five remaining properties expected to be settled in June, conditional on AVC regulatory approvals.

HPI shares are unchanged at $3.19 at 1:23 pm AEST.