Hotel Property Investments (ASX: $HPI) strategic announcement

Hotel Property Investments (ASX: $HPI) has entered into binding documentation to sell four assets to its major tenant, Australian Venue Co, for $48.6 million. The proceeds will be immediately allocated to a capital investment program to upgrade other assets within the HPI portfolio. This strategic move aims to deliver a package of benefits to HPI securityholders, including improved certainty on future rental cashflows, de-risking the portfolio, and strengthening HPI's relationship with its major tenant.

Executive commentary on strategic asset sales and capital investment program

Despite challenging capital markets conditions, we remain committed to implementing initiatives to further enhance HPI's market leading portfolio and drive long-term securityholder returns. The strong pricing outcomes on these asset sales reflect the attractive fundamentals of the sector in which we operate, and the asset enhancement program provides an efficient recycling mechanism to deploy capital into higher return investments that enhance the quality of our assets.

Summary of strategic asset sales and capital investment program

Hotel Property Investments (ASX: $HPI) has strategically divested four assets to Australian Venue Co. for $48.6 million, in line with the current book value. The proceeds will be reinvested at an attractive initial yield of 7.5% to upgrade other assets within the HPI portfolio, aiming to improve future rental cashflows, de-risk the portfolio, and strengthen the relationship with its major tenant. The company maintains its FY24 distribution guidance of 19.0 cents per security, barring any unforeseen events and no material change in market conditions. The strategic move reflects HPI's commitment to enhancing its market leading portfolio and driving long-term securityholder returns.