Hotel Property Investment (ASX: HPI) has announced the sale of four properties to Australian Venue Co. for AU$48.6 million, proceeding in two phases. This strategic move allows the immediate reinvestment of the sales proceeds into a capital investment program aimed at enhancing other assets within HPI's portfolio. This strategy is expected to yield an attractive initial return of 7.5%, enhancing the quality of HPI’s assets and strengthening its relationship with its major tenant, Australian Venue Co., now owned by PAG. The divestiture aligns with HPI’s ongoing strategy to optimize its portfolio, having sold eight assets since FY20 and acquired 22.
This reallocation of capital is geared towards venue improvements, including upgrades to food and beverage offerings and physical spaces across nine venues initially, with more investments planned following the settlement of the remaining two sales. These enhancements aim to solidify the venues' roles in their communities, improve rental cash flows, and extend lease tenures, thereby benefiting HPI’s securityholders by improving earnings and net tangible assets (NTA) while navigating challenging capital market conditions.
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