Hotel Property is the owner/landlord of 42 hotels, of which 41 are leased by and operated by Coles ((COL)). Coles has entered a JV with Australian Venue Co in relation to its hotels business.
Deutsche Bank believes the value in Hotel Property is in its liquor and gaming licenses, assets that may be underutilised under the Coles JV arrangement.
Because of the size, relevance and client interest the broker initiates coverage with a Buy rating and $3.44 target.
Sector: Real Estate.
Target price is $3.44.Current Price is $3.24. Difference: $0.20 – (brackets indicate current price is over target). If HPI meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).