No Surprises in Hotel Property Investments Interim Result, Fair Value Lifts on Lower Cost of Capital

Hotel Property Investments reported a solid first-half result. This was anticipated as fiscal 2015 distribution guidance was lifted in January. Higher rental income and lower financing costs saw adjusted funds from operations at AUD 11.6 million and slightly ahead of prospectus guidance of AUD 10.6 million. This translates to a distribution of AUD 0.079 per security for the first half with full-year distribution guidance reiterated at AUD 0.161 per security. Our forecasts remain largely intact. Our fair value estimate increases to AUD 2.90 from AUD 2.60 to reflect a lower cost of capital, in line with our global reassessment of required investment returns.