Hospitality Property Fund Limited is a property loan stock company which invests in hotel and leisure properties. The Fund is a publicly traded company and was listed on the main board of the JSE Limited (‘JSE’) under the Financials – Real Estate sector in February 2006.

Photograph: Arabella Hotel and Spa, Hermanus

The Fund listed with a portfolio of sixteen properties valued at around R1,0 billion and the portfolio has since grown to twenty-six properties with a market value of appoximately R3,9 billion. The Fund was established with the aim of offering unitholders an investment vehicle with exposure to the hospitality sector through the ownership of hotel and leisure properties.

Hospitality is the largest multi-branded hotel owner in South Africa and has built strong partnerships with well-recognised local and international hotel brands. Through these long-term partnerships, the Fund leverages the value of its portfolio.

The Fund’s profits are distributed in full as debenture interest, free of tax and linked unitholders are consequently taxed according to their individual tax status.

The Fund comprises a total of 88,8 million A-linked units and 88,8 million B-linked units, which are traded on the JSE as HPA and HPB codes respectively. The A-linked units have a preferential claim to earnings with capped growth. The B-linked units receive the balance of the earnings.

As at 30 June 2011 the properties were independently valued at R3,9 billion, which translated into a net asset value of R12,71 per linked unit (excluding deferred tax). At year-end the Fund was trading at a 11,9% discount to net asset value on a combined linked unit basis.