ARA H-Trust H2 DPS rises to US$0.01627 on travel recovery

ARA US Hospitality Trust (ARA H-Trust) posted a distribution per stapled security (DPS) of US$0.01627 for the second half ended Dec 31, 2022, higher than the US$0.00355 reported in the same period in 2021.

This came as revenue and net property income improved, leading to a higher distributable income, the real estate investment trust (Reit) said on Thursday (Feb 23).

Revenue was up 12.8 per cent to US$87.8 million for the half-year period, from US$77.8 million in the same period in 2021. Net property income (NPI) grew 28.9 per cent on year to US$20.3 million for the half year, from US$15.8 million.

Distributable income more than trebled year on year to US$9.4 million, from US$2 million.

The distribution will be paid out on Mar 30, after the Reit’s books’ closure on Mar 3.

For the full year ended Dec 31, DPS was higher at US$0.03054, versus US$0.00355 the previous year. Distributable income increased to US$17.5 million from US$2 million. Revenue was 29.3 per cent higher at US$169 million from US$130.7 million in FY2021, while NPI rose 66.4 per cent to US$41.4 million from US$24.9 million.

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Portfolio occupancy for the year rose to 65.3 per cent, from 57.1 per cent in FY2021. ARA H-Trust recorded a 33.9 per cent year-on-year increase in revenue per available room (RevPAR) to US$85.

Its aggregate leverage ratio stood at 39.4 per cent as at Dec 31, while net gearing was lower at 35.4 per cent. There are no refinancing requirements for FY2023, the managers said.

The managers also noted that amid inflation concerns and risks of an economic slowdown, lodging demand stayed resilient and continued to recover. This was mainly led by pent-up travel demand from the leisure segment.

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Recent acquisitions made by CapitaLand India Trust and ARA US Hospitality Trust

In the third quarter of FY2022, the trust disposed of five Hyatt Place properties with declining performance, yielding net proceeds totalling about US$38 million. A portion of the funds was channelled into acquiring a new hotel, with the proposed acquisition expected to complete by end-Q1 FY2023.

ARA H-Trust said it would redeploy capital into higher-yielding core assets to improve portfolio occupancy and RevPAR.

Stapled securities of ARA H-Trust closed S$0.015 or 3.9 per cent higher at S$0.40 on Thursday, after the results were released.