CDL Hospitality Trust (CDLHT) posted a 9.7 per cent drop in distribution per unit (DPU) to 2.36 Singapore cents for the third quarter ended Sept 30, 2015.
This came on the back of a 2.2 per cent decline in net property income to S$33.1 million, after deducting operating expenses of Jumeirah Dhevanafushi and the Japan Hotels, and the portfolio's property tax and insurance expenses.
Included in the group's net income is a depreciation expense of S$400,000 arising from the Japan Hotels, which was absent the previous year.
Gross revenue registered a 2.4 per cent rise to S$41.1 million, mainly attributable to the contribution of S$2.4 million from the acquisition of the Japan Hotels in December 2014 and incremental rental income of S$1.2 million from the newly refurbished mall Claymore Connect. These mitigated the reduction in rent contribution of S$2.3 million from the Singapore Hotels.
The Australia hotels and New Zealand hotel also recorded lower contributions due to the weakened Australia dollar and New Zealand dollar against the Singapore dollar.
"The widespread economic slowdown has led to unfavourable trading conditions in some of our markets," said Vincent Yeo, CEO of M&C Reit Management Limited and M&C Business Trust Management Limited, the managers of CDLHT.
"However, our Japan Hotels acquisition in December last year has performed remarkably well. We have continued to diversify our earnings base by acquiring a hotel in Cambridge, UK, on Oct 1, 2015 and we look forward to its maiden contribution in the next quarter."