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Ascendas Hospitality Trust Q1 DPS falls 5.2% to 1.28 S cents

ASCENDAS Hospitality Trust will pay out a distribution per stapled security (DPS) for the three months to June 30 of 1.28 Singapore cents, down by 5.2 per cent on the same period in the year before, the managers said in results released on Thursday.

The trust, which is changing its financial year to end on Dec 31, posted a lower DPS on the absence of proceeds from the divestment of two hotels in Beijing the previous year.

But, shorn of the sale proceeds, distributable income from operations came 6.4 per cent higher in the quarter at S$15.6 million, the managers highlighted in the results.

Net property income was up by 13.6 per cent to S$21.3 million, on a 3.5 per cent rise in gross revenue to S$46.5 million, on contributions from five hotels that were bought in the year prior.

Tan Juay Hiang, chief executive of the managers, said in a statement that the full-year income from the five new hotels - which are under master leases in Japan and South Korea - is expected to outweigh the lost contributions from the Beijing hotels that were sold in the exit from China.

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But income from Australia - a core market, where Ascendas Hospitality Trust has six of its 14 hotels - was down on the Australian dollar's weakness against the Singdollar.

Average occupancy in the Australian properties fell to 80.7 per cent in the quarter, down from 81.8 per cent the previous year, while revenue per available room - a key industry metric - slipped lower by 2.2 per cent to A$133 (S$125.20).

Takings were hit by market competition in Sydney and Melbourne, although the managers expect the hotel scene in Brisbane to be supported by a limited pipeline of room stock and the opening of a new runway at Brisbane Airport in the year ahead.

"We remain positive on the longer-term prospects of the Australian market in general," said Mr Tan.

"We also continue to invest in the properties to keep the accommodation products competitive, as we ride out the challenging period."

Meanwhile, Tokyo and Osaka hotels are expected to benefit from the Rugby World Cup in 2019, alongside support from the 2020 Olympic Games in Tokyo.

The upcoming Universal Studios Japan should also help hotels in Osaka, although the market there faces more rooms in the medium term, the managers said in its outlook statement.

Ascendas Hospitality Trust's gearing stood at 34.1 per cent as at June 30, with a weighted average debt maturity of 3.5 years.

The trust, which is a stapled trust comprising Ascendas Hospitality Real Estate Investment Trust and Ascendas Hospitality Business Trust, unveiled plans on July 3 to merge with Ascott Residence Trust by year-end. A scheme meeting vote is scheduled for October 2019.

Deloitte & Touche was named the independent financial adviser to the independent directors of Ascendas Hospitality Trust's managers, in a separate announcement on Thursday.

The counter closed up by S$0.02 or 1.92 per cent to S$1.06 on Thursday.

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