HOSPITALITY PROPERTY FUND LIMITED - Trading statement

Trading statement

HOSPITALITY PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A-linked units: HPA
ISIN for A-linked units: ZAE000076790
Share code of B-linked units: HPB
ISIN for B-linked units: ZAE000076808
("Hospitality" or "the Company")

TRADING STATEMENT

In terms of the Listings Requirements of the JSE Limited,
property entities are required to publish a trading
statement as soon as they are satisfied that a reasonable
degree of certainty exists that the distribution for the
next distribution period will differ by at least 15% from
that of the previous corresponding period or a profit
forecast previously provided to the market in relation to
such period.

Hospitality’s 2014 annual results announcement released on
20 August 2014 included a distribution forecast for the
year ended 30 June 2015 of 181.87 cents per combined unit.
This comprised of 148.42 cents and 33.45 cents respectively
for the A-linked and B-linked unit distributions. Further
details disclosed in the 2014 Integrated Annual Report
included the forecast for the six-month period to 31
December 2014 (“interim period”). The combined distribution
for the interim period was forecast at 89.73 cents per
linked unit, made up of 73.33 cents for the A-linked unit
and 16.40 cents for the B-linked unit. This forecast forms
the baseline for the purpose of this trading statement.

Shareholders are advised that growth in the hospitality
trading environment has remained weak during the current
financial   year,  with   occupancy   in  particular under
pressure. According to the latest STR Global South Africa
Hotel Review, overall year to date occupancy (July to
October 2014) for the local hotel industry showed subdued
growth of 1.8% to 63.7%, average daily rate (“ADR”)
increased by 5.8% to R973 resulting in revenue per
available room (“RevPar”) growing by 7.8% to R620.

Factors impacting   the South African   hospitality   industry
include:
   -   reduced international travel as a result of the Ebola
       epidemic. Although no cases have been reported in
       South Africa to date and South Africa is further from
       the epidemic than most European countries, there
       appears to be a negative perception concerning travel
       to the African continent as a whole;
   -   arrivals from Asian countries have been negatively
       impacted    by   the    recently   implemented   Visa
       requirements; and
   -   restricted public sector spending in line with cost
       saving measures imposed by the Finance Ministry has
       also contributed to the lower demand.

Hospitality’s trading performance has been in line with the
overall hotel and leisure market, with occupancy growing by
0.4% to 61.7%, ADR increasing 7.2% to R 1 109 resulting in
RevPar growth of 7.6% to R685 for the four months to 31
October 2014. Due to the current trading conditions, which
were tighter than anticipated when the forecast was made,
the combined distribution for the interim period is
expected to be at least 8% lower than the forecast, or a
revised maximum forecast of 82.33 cents, with the A-linked
unit in line with the distribution policy at 73.33 cents
and the B-linked unit is expected to be at least 45% lower
than forecast, or a revised maximum forecast of 9.0 cents
per linked unit.

The management of Hospitality will continue to monitor
demand in the domestic hospitality sector and should
conditions not improve in the second half of the financial
year, further guidance will be provided to shareholders.

Johannesburg
25 November 2014

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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