SINGAPORE (April 30): The managers of CDL Hospitality Trusts (CDL HT) – a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-REIT) and CDL Hospitality Business Trust (HBT) – have declared a DPU of 2.09 cents for the 1Q ended March, down 3.7% from its 1Q18 DPU of 2.17 due to lower revenue.
Revenue for the quarter fell 10.6% to $46.3 million from $51.8 million in 1Q18 mainly attributed to reduced contribution from the trust’s Singapore, New Zealand, Australia and UK Hotels. This was exacerbated by the full closure of Dhevanafushi Maldives Luxury Resort since June last year for rebranding works.
Collectively, revenue contributions from these properties fell by $6.7 million y-o-y, partially mitigated by a $0.5 million inorganic contribution from the Italy hotel acquired in Nov 2018, as well as higher contributions from Pullman Hotel Munich and the trust’s Japan hotels.
Total net property income (NPI) for the quarter fell 10.7% to $33.8 million from $37.8 million as a result.
In Singapore, RevPAR fell 2.4% on-year to $157 from $161 a year ago.
The managers attribute this to a competitive environment amidst uncertain global economic conditions, while Singapore’s hospitality market was further affected by the absence of the biennial Singapore Airshow and a series of meetings and events hosted during Singapore’s Chairmanship of ASEAN in 2018.
Overall RevPAR performance was also dampened by upgrading works such as Orchard Hotel as 8.6% of its room inventory closed during the quarter for renovation of guest rooms, while its F&B revenue was also affected by the closure of facilities for upgrading works.
There was also some room inventory taken out due to pipe works at M Hotel and Copthorne King’s Hotel during the quarter.
Excluding the out of order room inventory, RevPAR for the Singapore Hotels in 1Q 2019 increased 0.4% y-o-y.
Elsewhere, Angsana Velavaru secured a RevPAR gain of 17.6% y-o-y due to growth in tourist arrivals into Maldives for the YTD Feb 2019, although gross revenue in local currency terms remained unchanged on-year due to fixed rental income received during the quarter.
Revenue contributions from the Australia hotels fell due to foreign exchange changes, as did hotels in the UK, where the conference and events business has been dampened by uncertainty surrounding Brexit.
While hotels in Japan performed positively in terms of both RevPAR growth and contributions, NPI contribution was comparatively lower due to higher operating expenses.
Pullman Munich achieved a RevPAR growth of 23.9% y-o-y, aided by a healthy events calendar including a large biennial trade fair.
The managers also highlight that its Italy hotel attained an “impressive” RevPAR growth of 23.9% y-o-y notwithstanding a traditionally low demand season for the quarter, due to the adoption of a volume strategy.
“With a strong balance sheet and ample debt headroom, we will continue to seek acquisitions as a key priority. Moreover, we will invest in maximising the long-term potential of our properties. We will also continue to evaluate suitable divestment opportunities as they arise to unlock underlying asset values and/or recycle capital for better returns,” says Vincent Yeo, CEO of CDL HT’s managers.
Units in CDL HT closed 1 cent higher at $1.60 on Monday.
