Hotel Property Investments

HPI: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$1.70	Byb	Dbnjhfkk

Hotel Property Investments: Attractive Distribution, Solid Reinvestment Initiatives; Securities Fairly Valued

Adrian Atkins

May 16, 2024

No-moat Hotel Property Investments continues to refine its pub portfolio. In March this year, management announced the sale of four pub properties for AUD 49 million to its major tenant, Australian Venue. We view these asset sales favorably as they enable Hotel Property Investments to allocate funds for venue improvement, leading to higher rents, longer leases, and a better-quality portfolio. Aligned with our unchanged earnings estimates and expected fiscal 2024 distribution of AUD 0.19, we maintain our fair value estimate of AUD 3.40. At current prices, the stock screens as fairly valued.

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