HOSPITALITY PROPERTY FUND

ANALYSTS & FUND MANAGERS

PRESENTATION

May 2017

Certain statements in this document may constitute ’forward looking statements’. Such forward looking statements

reflect the company’s beliefs and expectations and involve known and unknown risks, uncertainties and other

important factors that could cause the actual results, performance or achievements of Hospitality Property Fund

Limited and its subsidiaries to be materially different from the future results, performance or achievements expressed

or implied by such forward looking statements. The company undertakes no obligation to update publicly or release

any revisions to these forward looking statements to reflect events or circumstances after the date of this document,

or to reflect the occurrence of anticipated events. Past performance of the company cannot be relied on as a guide to

future performance. Forward-looking statements speak only as at the date of this document. You are cautioned not to

place any undue reliance on such forward looking statements. No statement in this document is intended to be a

profit forecast.

This document is being supplied to you for informational purposes only. This document is not a prospectus or an offer

or invitation or inducement to subscribe for or purchase any securities, and nothing contained herein shall form the

basis of any contract or commitment whatsoever. This document does not constitute a recommendation regarding the

securities of the company.

No representation or warranty, express or implied, is given by the company, its subsidiaries or any of their respective

directors, officers, employees and affiliates or any other person as to the fairness, accuracy or completeness of the

information (including data obtained from external sources) or opinions contained in this document, nor have they

independently verified such information, and any reliance you place thereon will be at your sole risk. Without

prejudice to the foregoing, no liability whatsoever for any loss howsoever arising, directly or indirectly, from any use of

information contained in this document, or otherwise arising in connection therewith is accepted by any such person

in relation to such information. None of the data in this document has been reviewed or reported on by the group’s

auditors and no guarantee or warranty as to the data’s accuracy, expressed or implied, is given.

2

3

Public

50.6% 49.4%

Leases

Board of Directors

● Executive Directors

Keith Randall – CEO

Mara de Lima – FD

● Non-Executive Directors

John Copelyn – Chairman

Linda de Beer – Lead Independent and Audit

& Risk Chairman

Don Bowden – RemCo Chairman

Gerald Nelson

Zuko Kubukeli – Social and Ethics Chairman

Willy Ross

Syd Halliday

Zola Malinga

Rob Nicolella

Marcel von Aulock

Laurelle McDonald

Zibusiso Kganyago

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Executive Committee

● Keith Randall – CEO

● Mara de Lima – FD

● Rosa van Onselen – Company Secretary

● Leon Meyer – Director of Asset Management

● Kim Irmler – Investment Manager

● Mario Monica – Group Development & Facilities Manager

● Ashleigh Christie – HR & Training Manager

5

6

7

14%

36%

50%

Hotel Grade

Luxury Upscale Midscale

28%

44%

28%

Geographic Location

Western Cape Gauteng Rest of SA

8

Nine months to March’17

Year to June’16

Rental income 499 474

Western Cape 238 224

Gauteng 150 174

Rest of South Africa 111 76

Operating expenses (38) (44)

Ebitdar 461 429

Property rentals (1) (1)

Exceptional items 200 231

Net financial costs (116) (158)

Attributable earnings 544 501

Adjustments (200) (229)

Distributable income 344 272

Distributions per share

(cents)(1)

105.09 148.54

Interim 60.17 73.23

Final 44.92 75.30

(1) Restated

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Nine months to March’17

Year to June’16

Attributable earnings 544 501

Investment property disposal (profit)/loss (37) 14

Goodwill impairment 16 12

Investment property fair value revaluation (184) (251)

Headline earnings 339 276

Interest rate swap fair value adjustment 5 (6)

Debenture discount amortisation - 2

Distributable income 344 272

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Nine months to March’17

Year to June’16

Ebitdar per income statement 461 430

Working capital adjusted for non-cash and

exceptional items (50) 24

Cash generated from operations 411 454

Interest paid (net) (116) (158)

Maintenance capex (73) (131)

Free cash flow 222 165

Distribution to shareholders (335) (248)

Disposal proceeds 147 206

Move in net IBD 34 123

Opening net IBD (1 531) (1 654)

Prepaid borrowing costs and accrued interest 7 -

Transaction costs (18) -

Closing net IBD (1 508) (1 531)

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Nine months to March’17

Year to June’16

Bank facilities 755 755

Corporate bonds 970 970

Prepaid borrowing costs and accrued interest (7) -

Gross IBD 1 718 1 725

Cash on hand (210) (194)

Net IBD 1 508 1 531

Cost of net debt 10.4% 10.0%

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Based on the year end portfolio

for the 12 month period ended

31 March 2017

Hotels Rooms

Luxury 3 749

Upscale 10 1 894

Midscale 11 2 589

Total 24 5 232

Statistics Year to March’17

Year to March’16 % Change

Occupancy (%) 65.5 64.0 1.5pp

Average room rate (R) 1 218 1 144 6

RevPar (R) 797 732 9

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Hotel Number of rooms Occupancy

ARR (R)

RevPar (R)

Rent received

(Rm)

Western Cape 1 450 71.1% 1 751 1 245 276

Westin Cape Town 483 151

Radisson Blu Waterfront 177 39

StayEasy Century City 175 20

Protea Hotel Victoria Junction 172 25

Southern Sun Newlands 162 13

Arabella Hotel & Spa 145 19

SunSquare Cape Town Gardens 136 9

Gauteng 2 297 60.4% 1 022 617 214

Birchwood Hotel & Conference Centre 665 57

Crowne Plaza Rosebank 318 30

Holiday Inn Sandton 301 22

Garden Court OR Tambo 253 25

Garden Court Milpark 251 20

Radisson Blu Gautrain 220 39

Kopanong Hotel & Conference Centre 168 7

Mount Grace Country Hotel & Spa 121 14

Total c/fwd 3 747 490

Note : Based on the year end portfolio for the 12 month period ended 31 March 2017

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Hotel

Number

of rooms Occupancy

ARR

(R)

RevPar

(R)

Rent

received

(Rm)

Total b/fwd 3 747 490

Rest of South Africa 1 333 68.3% 912 622 163

Garden Court South Beach 414 51

Garden Court Polokwane 180 19

Southern Sun Bloemfontein 147 10

Garden Court Kimberley 135 10

Protea Hotel Edward 131 16

StayEasy Rustenburg 125 9

Protea Hotel Marine 114 11

Protea Hazyview 87 6

5 080 65.5% 1 218 797 622

Champagne Sports 152 31

Total 5 232 653

Note : Based on the year end portfolio for the 12 month period ended 31 March 2017

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Rent

received Valuation Yield on valuation

Western Cape 276 3 413 8.1%

Westin Cape Town 151 1 850

Radisson Blu Waterfront 39 519

StayEasy Century City 20 285

Protea Hotel Victoria Junction 25 330

Southern Sun Newlands 13 141

Arabella Hotel & Spa 19 166

SunSquare Cape Town Gardens 9 122

Gauteng 214 2 534 8.4%

Birchwood Hotel & Conference Centre 57 587

Crowne Plaza Rosebank 30 309

Holiday Inn Sandton 22 310

Garden Court OR Tambo 25 334

Garden Court Milpark 20 324

Radisson Blu Gautrain 39 472

Kopanong Hotel & Conference Centre 7 66

Mount Grace Country Hotel & Spa 14 132

Total c/fwd 490 5 947

Note : Based on the year end portfolio for the 12 month period ended 31 March 2017

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Rent

received Valuation Yield on valuation

Total b/fwd 490 5 947

Rest of South Africa 163 2 157 7.7%

Garden Court South Beach 51 729

Garden Court Polokwane 19 277

Southern Sun Bloemfontein 10 126

Garden Court Kimberley 10 129

Protea Hotel Edward 16 201

StayEasy Rustenburg 9 133

Protea Hotel Marine 11 134

Protea Hazyview 6 80

Champagne Sports 31 348

Total 653 8 104 8.1%

Central costs (47) Ebitdar 606

Note : Based on the year end portfolio for the 12 month period ended 31 March 2017

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Valuation at 31 March 2017

Shares in issue (million) 330

Price (R) 13.50

Market capitalization (R’000) 4 455

Net debt (R’000) 1 508

Enterprise value 5 963

Indicative F’17 12 months Ebitdar (R’000) 606

Implied yield pre gearing 10%

Capital restructure

● Dual share structure collapsed into single-class capital structure

● One ordinary A-share for every 3.5 B-shares owned

● Alignment of shareholder objectives

1st Tsogo Sun Transaction

● Effective 1 September 2016

● Ungeared acquisition of 10 established hotels

● Improved spread of HPF’s properties across hotel grading spectrum to

broaden earnings base

Disposals

● Inn on the Square sold for total a cash consideration of R157m (20 November

2016)

● Two units at Kapanong were sold for a total cash consideration of R2m

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2nd Tsogo Sun transaction

● Acquisition of 29 established hotel properties

● Aggregate purchase consideration of R3.6bn : R1.0bn in cash and R2.6bn in

shares

● Subject to shareholders’ approval

Rights offer

● Fully underwritten rights offer to raise R1.8bn

● Funds to be applied to reduce interest bearing debt and fund current and

future acquisitions

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Sandton Eye

● Agreement to acquire various additional sections and exclusive use over

Sectional Title Scheme (Radisson Blu Gautrain) in Sandton Eye, including real

right of expansion by ± 10 000 bulk square metres or additional 7 floors

● Aggregate purchase consideration of R302m : R272m in cash and R30m in

shares

Reduced funding costs

● Increased scale and reduced gearing has improved rating and potential to

reducing funding cost on net debt

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Well diversified rental income from tenants, both geographically

and in terms of product offering across brand segments

Committed to ongoing capital expenditure programme

● Five year planning horizon

● Low gearing provides headroom to pursue opportunities aligned with HPF’s

investment strategy

● Investment in existing properties for maintenance purposes

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THANK YOU