What's with the Hotel Property Investments (ASX:HPI) share price today?

HPI shares are in the red today despite the company purchasing six new pubs.

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The Hotel Property Investments Ltd (ASX: HPI) share price is slightly lower this morning despite the company's announcement regarding new pub acquisitions.

The real estate investment company is trading 0.63% lower at $3.16 after the announcement it has expanded its property portfolio.

Investments update

Hotel Property Investments shares are on the slide today despite the company's latest update.

In a statement to the ASX this morning, Hotel Property Investments advised it has acquired six Queensland assets.

The purchase price for the properties totals $32.7 million, and comprises the following:

  • Surf Air Hotel – $10.45 million – Settled May 2021;
  • Commonwealth Hotel, Clermont – $3.06 million – Contracted to settle June 2021;
  • Grand Hotel, Clermont – $2.78 million – Contracted to settle June 2021;
  • Capella Hotel, Capella – $3.34 million – Contracted to settle June 2021;
  • Commonwealth Hotel, Roma – $9.78 million – Contracted to settle June 2021; and
  • White Bull Tavern, Roma – $3.25 million – Contracted to settle June 2021.

The company tapped into its existing debt facilities to fund the acquisitions.

Hotel Property Investments also stated the weighted average yield of the new acquisitions is 7.75%. The properties have been leased to hospitality and venue management group Australian Venue Company.

The lease agreement has an initial term of 20 years from the acquisition date.

Hotel Property Investment CEO Don Smith touched on the procurement, saying:

The acquisition of these assets demonstrates HPI's strong relationship with AVC and our ability to transact efficiently to the benefit of all parties.

Hotel Property Investments share price snapshot

Over the last 12 months, Hotel Property Investment shares have travelled in circles. The company's share price is posting a yearly gain of around 18% but is down almost 3% on year-to-date performance.

On today's price, Hotel Property Investments commands a market capitalisation of roughly $555 million, with approximately 174 million shares outstanding.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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