CDL Hospitality Trusts a ‘buy’ for its compelling long-term value

SINGAPORE (Jan 27): DBS Group Research is maintaining its “buy” call on CDL Hospitality Trusts (CD-REIT) with a revised target price of $1.65 for its compelling long-term value given its Singapore portfolio trades on a heavily discounted implied price per key.

In a Friday report, lead analyst Mervin Song says CD-REIT’s implied price per key for its Singapore portfolio stands at less than $500,000 which is below its replacement cost of $700,000, recent market transactions of above $650,000 and that of other listed Singapore hospitality REITs of between $650,000 and $1 million.

“Given the quality of the portfolio and CREIT’s long-term track record, we believe this discount is unwarranted. Thus, CDREIT is the cheapest REIT providing exposure to the eventual upturn in the Singapore hospitality market which we project will occur in 2018 as supply pressures ease,” says Song.

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