CDL Hospitality Trusts (CDLHT) has announced total distribution per stapled security (DPS) of 1.22 cents for the 1HFY2021 ended June, 19.2% lower than DPS of 1.51 cents in the same period the year before, as the group’s portfolio continues to be impacted by the Covid-19 pandemic.
1HFY2021 gross revenue grew by 27.2% y-o-y to $66.2 million, out of which $48.3 million – or 72.96% -- was contributed by the Singapore and New Zealand hotels and Maldives resorts.
Occupancies for the group’s Singapore and New Zealand portfolio were supported by demand for accommodation facilities for isolation purposes.
Property expenses increased by 30.93% y-o-y to $29.2 million on higher overall expenses, with the exception of property tax.
Accordingly, net property income (NPI) increased 24.4% y-o-y to $37.0 million, with higher NPI from the Maldives, New Zealand, UK, Germany and Italy.
The group saw inorganic contribution from W Hotel, which was acquired on July 16, 2020, although this was offset by the absence of contribution from Novotel Singapore Clarke Quay and Novotel Brisbane, which were divested on July 15, 2020 and Oct 30, 2020.
See also: CGS-CIMB remains positive on ART and CDLHT on gradual resumption of travelling activities
Total distribution to stapled securityholders, however, fell 18.5% y-o-y to $15.0 million as the NPI increase for the UK hotels and Raffles Maldives Meradhoo did not contribute to the corresponding increase in distribution.
According to CDLHT, this was due to the increase being largely attributed to the low base effect attributed to losses in NPI recorded in the 1HFY2020, along with expenses below the NPI line that have to be accounted for.
The lower distributable income was also attributable to the rent restructuring in the trusts’ hotels in Germany and Italy, where the accounting rents recorded were higher than the actual rents received.
The absence of a one-off contribution of some $0.8 million related to the divestment of Novotel Singapore Clarke Quay also led to the lower distributable income.
As at June 30, the trust reported an occupancy rate of 73.5% for its five hotels in Singapore, four percentage points higher than the 69.5% reported in the 1HFY2020.
Including W Hotel, CDLHT saw occupancy of 70.2% for the 1HFY2021, up 4.4 percentage points from the previous year’s 65.9%.
1HFY2021 revenue per average room (RevPAR) for the five Singapore hotels stood 19.5% lower y-o-y at $60, while RevPAR for the six hotels including W Hotel stood 9.5% lower y-o-y at $72.
CDLHT’s RevPAR for its New Zealand hotels increased by 31.8% y-o-y to NZ$164 ($155.20).
RevPAR in Australia stood 31.8% higher y-o-y at A$61 ($61.02), while RevPAR in Japan fell 27.9% y-o-y at JPY2,546 ($31.43).
In the Maldives, RevPAR for the 1HFY2021 surged 138.1% y-o-y to US$231 ($313.92). Hotels in the UK saw RevPAR fall by 21.8% y-o-y to £30 ($56.66).
Hotels in Germany and Italy saw RevPAR for the 1HFY2021 decline 61.2% y-o-y and 84.4% y-o-y to €14 ($22.50) and €5 respectively.
The trusts’ hotels in Singapore and New Zealand were supported by the demand for dedicated isolation facilities despite the lack of international tourists.
Visitor arrivals plunged in Japan with the restriction of non-resident foreigners. CDLHT’s hotels in the UK remained open to house aircrew and essential workers as well as elite sports teams and entertainment groups despite the lockdown in early January.
In Germany, non-essential travel was prohibited and remained in place for most of 1HFY2021 before it was lifted in May. The group expects that a recovery in Germany’s hospitality sector “appears imminent” amid the rollout of vaccines.
The hotel in Italy was temporarily closed since Oct 30, 2020, and reopened from May 26.
The Maldives was the exception, seeing an increase in total arrivals for year-to-date (y-t-d) June.
“The performance of our UK and Germany hotels has been encouraging, and we are experiencing some of the highest occupancies since the onset of Covid-19. We are optimistic that such form of recovery could follow in other markets upon the continued easing of restrictions and quarantine requirements,” says Vincent Yeo, CEO of the managers.
“As we head towards travel normalcy, we will continue to work closely with our operators and lessees to ride on the recovery, while maintaining tight costs control measures to protect the bottom line,” he adds.
For more stories about where the money flows, click here for our Capital section
On the revision of CDLHT’s principal investment strategy, Yeo says it is a “a natural extension within the spectrum of accommodation and/or lodging space. This enables future investments in a wider pool of assets, with the objective of enhancing our resilience and returns to stapled securityholders, while we look forward to the eventual recovery of the hospitality sector”.
As at June 30, cash and cash equivalents stood at $125.2 million.
Units in CDLHT closed flat at $1.23 on July 29.
Photo: CDLHT
