PRESS RELEASE: Hilton and Transcorp Hotels sign 20 year extension for Transcorp Hilton Abuja management

2017_11_01_14_14_20_Abuja_Hotels_Transcorp_Hilton_Abuja_Hotels_in_Abuja_NigeriaDeal sees the iconic hotel remain under the flagship Hilton Hotels & Resorts brand

MCLEAN, United States of America, October 31, 2017/ — Hilton (NYSE: HLT) (http://Newsroom.Hilton.com) and Transcorp Hotels Plc (https://TransCorpHotelsplc.com), a subsidiary of Transnational Corporation of Nigeria Plc (Transcorp Plc) (www.TransCorpNigeria.com) today announced the signing of a 20-year extension to the current agreement to manage the iconic Transcorp Hilton hotel in Abuja. The agreement will see Hilton manage the property until 2037. The hotel, which is a national landmark for having hosted countless heads of state and global events like the World Economic Forum on Africa, has been operated by Hilton since its opening in 1987.

Speaking at a signing ceremony in Washington DC, Chris Nassetta, Hilton’s President and CEO, said: “We have had an incredible relationship with the Transcorp team and we are happy to announce that we will continue to grow that relationship throughout the next 20 years. With our mission to be the world’s most hospitable company, I am delighted we will be able to continue welcoming guests to this hotel until at least 2037.”

The award-winning 667-room hotel – one of the largest in sub-Saharan Africa – is currently undergoing a multi-million dollar renovation which will transform the property. The extensive refurbishment will continue the Transcorp Hotels legacy as the leading provider of hospitality in Nigeria.

Tony O. Elumelu, Chairman of Transcorp Plc, the largest listed conglomerate on the Nigerian stock exchange and owners of hospitality subsidiary Transcorp Hotels confirmed: “We are delighted to continue our long-standing owner-operator relationship with Hiton. Our investment in the renovation reflects our commitment to shaping Nigeria into a leading hospitality centre in the West Africa region and with Hilton as our operating partners, we are confident that we will continue to lead in the sector.”

Hilton and Transcorp Hotels have two additional properties in the development pipeline. Furthermore, Hilton expects to open six hotels in the next six months across Africa, and open properties in 15 countries where it currently does not operate in the next three years.

Also at the signing ceremony, Valentine Ozigbo, CEO of Transcorp Hotels who leads the management of the relationship between the owners and Hilton, commended Hilton for their clear commitment to delivering excellence and restated the owners’ commitment to continue to use technology and products to develop the hotel as a destination not just for high-end clientele, but also for those travelling to Abuja for business and leisure.

Hilton, which has more than 5,000 hotels globally, has had a continuous presence in Africa for more than 50 years, expects to more than double its current presence across the continent in the next five years.

Distributed by APO Group on behalf of Hilton.

 

South African Listed Property Funds – The Case For Hotel REITs

Same as last year the South African Property Owners’ Association’s (SAPOA) 51st Convention came and went with great pomp and ceremony as much as could be expected in Cape Town. Judging by some of the media stories that started floating around shortly after the event, it is clear that the South African listed property fund industry is experiencing some rough times, after a very good run for many years. The main reasons for this phenomenon are there for all to see. An economy in recession due to policy uncertainty, a volatile political environment with no immediate prospects for recovery as a result of a depressed global demand for commodities and the volatile Rand (ZAR)- US Dollar exchange rate.

With a persistent climate of reduced positive cash flows and rising expenses in the local environment, it is no wonder funds and asset managers are looking outside our shores to hunt for more optimum returns. Dollar- and Euro-based returns make sense to diversify against the ZAR-based returns, however in my assessment, property funds do not necessarily have to go off-shore to chase after the dollars. Good quality hospitality funds are totally capable of bringing in those dollars. It can reliably be argued that half of the demand for South African hotel accommodation is generated from overseas visitors including Americans, Europeans, Asians and other sources from around the world. Wealthy visitors from some west African countries like Nigeria and Ghana also bring in dollars when they land on our shores, and they also stay in hotels.

Professor Brian Kantor recently sounded a warning to Johannesburg Stock Exchange (JSE) listed property funds to consider very carefully their reasons for investing their funds in foreign markets because the nature of the returns in these markets may not necessarily be superior to those found on the JSE. It is my submission that more hotel funds may offer the required returns.

In the Fin24 article why firms are hoarding R14 trillion the writer points a finger at the listed property sector as having hoarded the most cash. “The surprising thing is that the major cash hoarders, apart from banks, are the rapidly growing listed property investment firms”, said Thando Vilakazi, a senior researcher at the centre. South African listed property funds are investing less in the local market and are using the JSE to source funds which are then used to invest in overseas markets. South Africa needs all the investment it can get and the sooner this happens the better so that business can further help tackle the problems of joblessness, poverty and unemployment.

The usual arguments against investment in hospitality property will need to be reviewed in order for these to be accepted as a viable alternative to put into listed property funds. More and more global chains are entering our markets and with them come operational and management expertise. It is also worth mentioning that the latter bring their client base with them and do not necessarily only rely on the domestic tourism market for hotel accommodation demand.

The graphs below depict the performance of a global Hotel Real Estate watchlist against the Dow Jones, the S&P 500 and the NASDAQ. The watchlist consists of REITs from the United States, Malaysia and a few from Europe and was observed during the period May to August 2017. Over the last three months the watchlist underperformed the Dow, the S&P and the NASDAQ.

3 Month 2017_08_06_13_34_35_Google_Finance_Track_your_portfolio_the_market_for_free

Over a six month window the watchlist was a star performer, clicking in a double-digit growth at just above 10%.

6 Month 2017_08_06_15_12_27_Google_Finance_Track_your_portfolio_the_market_for_free

When compared over a 12-month window, both year-to-date in 2017 and over the last year, the Hotel Real Estate watchlist has done well to narrow the percentage growth differential between itself and the Dow and the S&P 500. Only the NASDAQ outperformed the watchlist over this period.

YTD 2017_08_06_15_17_15_Google_Finance_Track_your_portfolio_the_market_for_free

1y 2017_08_06_15_20_56_Google_Finance_Track_your_portfolio_the_market_for_free.png

It is hoped that the above basic analysis can be sued by the South African investor community, property industry funders and the hotel industry to reconsider their decisions to expand off-shore and to give more hotel REITs on the JSE a chance.

 

 

South African Listed Property Funds – The Case For Hotel REITs

Same as last year the South African Property Owners’ Association’s (SAPOA) 51st Convention came and went with great pomp and ceremony as much as could be expected in Cape Town. Judging by some of the media stories that started floating around shortly after the event, it is clear that the South African listed property fund industry is experiencing some rough times, after a very good run for many years. The main reasons for this phenomenon are there for all to see. An economy in recession due to policy uncertainty, a volatile political environment with no immediate prospects for recovery as a result of a depressed global demand for commodities and the volatile Rand (ZAR)- US Dollar exchange rate.

With a persistent climate of reduced positive cash flows and rising expenses in the local environment, it is no wonder funds and asset managers are looking outside our shores to hunt for more optimum returns. Dollar- and Euro-based returns make sense to diversify against the ZAR-based returns, however in my assessment, property funds do not necessarily have to go off-shore to chase after the dollars. Good quality hospitality funds are totally capable of bringing in those dollars. It can reliably be argued that half of the demand for South African hotel accommodation is generated from overseas visitors including Americans, Europeans, Asians and other sources from around the world. Wealthy visitors from some west African countries like Nigeria and Ghana also bring in dollars when they land on our shores, and they also stay in hotels.

Professor Brian Kantor recently sounded a warning to Johannesburg Stock Exchange (JSE) listed property funds to consider very carefully their reasons for investing their funds in foreign markets because the nature of the returns in these markets may not necessarily be superior to those found on the JSE. It is my submission that more hotel funds may offer the required returns.

In the Fin24 article why firms are hoarding R14 trillion the writer points a finger at the listed property sector as having hoarded the most cash. “The surprising thing is that the major cash hoarders, apart from banks, are the rapidly growing listed property investment firms”, said Thando Vilakazi, a senior researcher at the centre. South African listed property funds are investing less in the local market and are using the JSE to source funds which are then used to invest in overseas markets. South Africa needs all the investment it can get and the sooner this happens the better so that business can further help tackle the problems of joblessness, poverty and unemployment.

The usual arguments against investment in hospitality property will need to be reviewed in order for these to be accepted as a viable alternative to put into listed property funds. More and more global chains are entering our markets and with them come operational and management expertise. It is also worth mentioning that the latter bring their client base with them and do not necessarily only rely on the domestic tourism market for hotel accommodation demand.

The graphs below depict the performance of a global Hotel Real Estate watchlist against the Dow Jones, the S&P 500 and the NASDAQ. The watchlist consists of REITs from the United States, Malaysia and a few from Europe and was observed during the period May to August 2017. Over the last three months the watchlist underperformed the Dow, the S&P and the NASDAQ.

3 Month 2017_08_06_13_34_35_Google_Finance_Track_your_portfolio_the_market_for_free

 

Over a six month window the watchlist was a star performer, clicking in a double-digit growth at just above 10%.

6 Month 2017_08_06_15_12_27_Google_Finance_Track_your_portfolio_the_market_for_free

When compared over a 12-month window, both year-to-date in 2017 and over the last year, the Hotel Real Estate watchlist has done well to narrow the percentage growth differential between itself and the Dow and the S&P 500. Only the NASDAQ outperformed the watchlist over this period.

 

YTD 2017_08_06_15_17_15_Google_Finance_Track_your_portfolio_the_market_for_free

1y 2017_08_06_15_20_56_Google_Finance_Track_your_portfolio_the_market_for_free.png

 

It is hoped that the above basic analysis can be sued by the South African investor community, property industry funders and the hotel industry to reconsider their decisions to expand off-shore and to give more hotel REITs on the JSE a chance.