Tsogo Sun in Hospitality deal
Sale of 29 hotels expected to reduce cost of funding while providing access to capital for future opportunities
Tsogo Sun has sold 29 hotels to its subsidiary, the listed real estate investment trust (Reit) Hospitality Property Fund (HPF), for R3.6bn. Since Tsogo took over HPF in 2016 and injected a slew of assets, the company’s fortunes have improved substantially. Tsogo Sun has added 39 hotels including these 29, since it bought a controlling stake in the group. Tsogo has injected the assets in exchange for more than 50% of HPF’s ordinary shares. HPF now has a market capitalisation of about R4.58bn. After the deal, it will own 53 hotel or hospitality industry assets. HPF CEO Keith Randall said the transaction was in line with the company’s growth strategy of acquiring "value-enhancing properties", from within Tsogo’s existing portfolio and external opportunities. Randall said the transaction represented an attractive acquisition for Hospitality, with the Tsogo portfolio comprising 29 successful and established hotel properties. "We are broadening Hospitality’s earnings base, brand and produ...
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