CDL Hospitality Trusts (CDLHT) has reported a total distribution per stapled security (DPS) of 5.70 cents for the FY2023 ended Dec 31, 2023, 1.2% higher y-o-y.
Including capital distributions, which rose by 99.5% y-o-y to $12.7 million for the year, total distribution to stapled securityholders – after retention for working capital – increased by 1.8% y-o-y to $71.0 million.
FY2023 revenue rose by 12.3% y-o-y to $257.6 million due to improvements across most of CDLHT’s portfolio markets.
FY2023 net property income (NPI) rose by 11.8% y-o-y to $138.3 million due to higher revenue and higher NPI contribution from most of the REIT’s markets except for New Zealand and the Maldives.
Interest costs for the FY2023 increased mainly due to higher funding costs on CDLHT’s floating rate loans and on re-financing of its fixed rate loans. The higher interest costs were also attributable to the amounts drawn to finance the group’s asset enhancement works.
2HFY2023
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During the 2HFY2023, DPS fell by 11.1% y-o-y to 3.19 cents due to higher interest costs.
Distribution to stapled securityholders – after retaining working capital – also fell by 10.7% y-o-y to $39.8 million from higher interest costs.
Revenue for the six-month period increased by 5.8% y-o-y to $138.3 million due to the continued recovery in global travel across all of CDLHT’s market segments.
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NPI grew by 3.7% y-o-y to $75.5 million in line with the higher revenue and higher NPI across all of CDLHT’s markets except for its hotels in Singapore and Perth, Australia. The lower NPI for CDLHT’s Singapore portfolio was due to higher property taxes and increased operating costs.
RevPAR growth
In Singapore, CDLHT’s revenue per available room (RevPAR) grew by 19.0% y-o-y to $198 in the FY2023. 2HFY2023 RevPAR rose by 3.5% y-o-y to $217 due to moderation in demand during the 4QFY2023. RevPAR for the corresponding period the year before also formed a higher base as it was a period of strong pent-up demand.
The average occupancy rate for CDLHT’s Singapore hotels inched up by 0.1 percentage points to 76.2% in the FY2023 but fell by 3.7 percentage points to 83.1% in the 2HFY2023.
The average daily rate (ADR) rose by 18.8% y-o-y to $260 for the FY2023 and grew by 8.1% y-o-y to $261 in the 2HFY2023.
RevPAR across CDLHT’s markets also grew on a y-o-y basis in the 2HFY2023 except for the Pullman Hotel Munich in Germany, which saw a y-o-y decline due to the high base in the 2HFY2022 where there were major events such as the European Championships.
As at Dec 31, 2023, CDLHT’s total portfolio value increased by 7.8% y-o-y to $3.2 billion. As at the same period, the REIT’s gearing stood at 36.7% with an interest coverage ratio of 2.65 times. Its fixed-rate borrowings stood at 52.3% as at Dec 31, 2023.
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“While international travellers from China have yet to fully return, global travel continued to recover in 2023. In Singapore, our core market, the hospitality sector witnessed remarkable growth in the first three quarters of 2023, building on the momentum of the strong rebound in 2022. In the final quarter, the pent-up demand that fuelled the industry's resurgence began to normalise, in contrast to the fervour experienced in 2022,” says Vincent Yeo, CEO of CDLHT’s managers.
“The year 2023 was a challenging one where we were pleased to achieve growth amidst a difficult economy and an elevated interest rate environment. The prospects for our portfolio hotels continue to be healthy while interest rates have shown signs of peaking,” he adds.
Units in CDLHT closed at $1.05 on Jan 29.
