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Broker's take: CGS-CIMB says Trump-Kim and 3,000 reporters a boon for hospitality
CGS-CIMB said in a report this week that the upcoming Trump-Kim summit puts Singapore in the spotlight as a key arbitration hub, which should boost hospitality, services and office sectors in the medium term.
That being said, the brokerage said its channel checks with the hospitality S-Reits suggested that hotel bookings have not shown significant increases or cancellations ahead of the summit scheduled for June 12.
CDL Hospitality Trust's Orchard Hotel and Genting Singapore operate within the summit’s gazetted boundaries. Other Orchard hotels and retail Reits’ operations that are not bounded by the gazette are Far East Hospitality Trust’s The Quincy Hotel and The Elizabeth Hotel, Ascott Residence Trust's Ascott Orchard, OUE Hospitality Trust's Mandarin Orchard, Starhill Global Reit's Wisma Atria and Ngee Ann City, as well as SPH Reit's Paragon Shopping Centre.
In a separate joint statement by Sentosa Development Corporation and the Singapore Police Force on Friday, they said that the island's leisure spots will continue to be opened to locals and tourists during the Trump-Kim summit.
"With the exception of the compound within Capella Singapore, Sentosa Island will remain accessible to all, as the multiple modes of access into Sentosa continue to operate as usual."
CGS-CIMB noted that the last historic meeting was in 2015 between presidents Xi Jinping and Ma Ying-jeou over the cross-strait issues. The Singapore International Arbitration Centre (SIAC) has meanwhile seen a 32 per cent year-on-year jump in new cases in 2017 involving S$5.3 billion. SIAC is ranked the most preferred arbitral institution in Asia, and the third-most preferred arbitral institution in the world, after London and Paris.
"The Trump-Kim summit reaffirms Singapore as a preferred choice of venue for a high-profile global summit and arbitration hub," said CGS-CIMB.
"We think the heightened security measures in the gazetted areas could slightly disrupt hotel occupancy and footfall over the four-five days of the Trump-Kim summit. Conversely, overall visitor arrivals should increase from delegations, security entourages and more than 3,000 reporters."
It added that while Singapore is "not the cheapest place" to host events, such as the "special" Trump-Kim summit, it remains a key hub for such meetings because of the country's abundance in relevant space and excellent infrastructure and air links.
"In the longer term, we see multiplier effects from increased demand for business services, mainly in legal/consultancy services as well as office and co-working space," CGS-CIMB added.