Photo by: Duane Daws
Europe-focused hotel and leisure property investment vehicle International Hotel Group on Wednesday started trading on the JSE AltX, following a private placement among individuals and institutions last week that raised an aggregate R253-million.
At an opening price of R20.56, International Hotel Group had a market capitalisation of R308-million and was also listed on the Luxembourg Stock Exchange.
The company was established with the aim of affording property investors the opportunity to invest directly into a portfolio of income-yielding hotel assets and was led by South African hotel sector veteran Helder Pereira, who previously held executive positions at Tsogo Sun Holdings and Southern Sun Hotels.
International Hotel Group aimed to acquire assets that could deliver consistent cash returns of about 7% on equity.
It currently had a portfolio of three hotels in the UK valued at £18.3-million, primarily in the economy and midtier markets, but sought to expand into selected European markets, funding its pipeline of hotel investments through a combination of new debt and equity.
It would undertake further capital raisings in future should acquisition targets become available.
“Our focus on hotels in a particular market segment, located in the UK and Europe, sets the company apart from other property investment vehicles in the commercial and retail sectors. We will seek to invest in hotels with good locations and a track record, as well as greenfield and conversions where there is good opportunity for upside.
“Properties will be chosen for their capacity to deliver good cash returns and in areas with a less cyclical demand and will generally be branded to ensure access to good distribution channels,” Pereira said.