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CDL Hospitality Trust posts 2.9% rise in Q2 DPS
CDL Hospitality Trust (CDLHT) posted a 2.9 per cent rise in distribution per stapled security (DPS) to 2.14 Singapore cents in the fiscal second quarter ended June 30, despite lower revenue and net profit for the period.
Revenue edged down 0.3 per cent to S$47.7 million from S$47.8 million, while net property income was down 3.7 per cent to S$33.6 million from S$34.9 million.
Net property income was boosted by new contributions from the Pullman Hotel Munich in Germany, whose acquisition was completed on July 14, 2017, and The Lowry Hotel, acquired on May 4, 2017. But this was offset by the absence of income from two divested hotels in Brisbane, the closure of a Maldives resort for renovation in June 2018, and lower contribution from Grand Millennium Auckland due to the absence of one-off sporting events in New Zealand along with a weaker New Zealand dollar and higher property tax.
The stapled group, which comprises a Reit and a business trust, saw total distribution - after retention for working capital - rise 3.6 per cent to S$25.8 milion from S$24.9 million in the year-ago period.
With the successful refinancing of two loans during the second quarter, CDLHT’s average weighted debt to maturity has increased to 3.2 years as at 30 June 2018, compared to 2.3 years in the previous year.
CDLHT said that with approximately two-thirds of its total borrowings being on fixed-rate interest, the group "is well-positioned in a rising interest rate environment and remains disciplined in maintaining a balanced debt maturity profile".
For the group's Singapore hotels, the average occupancy rate slipped 2.7 per cent in the second quarter to 83.5 per cent, while the average daily rate rose 2.4 per cent to S$184. Revenue per available room (RevPAR) fell 0.9 per cent to S$153, which CDLHT attributed to corporate demand in Singapore being hurt by two mid-week public holidays in May and the Trump-Kim summit in June.
Noting renovation works at Orchard Hotel and Grand Copthorne Waterfront, CDLHT said other asset enhancement opportunities in other hotels are being evaluated.
RevPAR was also down in New Zealand due to a high base effect from the year-ago period; in Japan due to high competition, though the hotel market is expected to benefit from regulatory changes affecting Airbnb listings; and in the Maldives due to new resort supply and tepid tourist arrivals from China.
In Europe, RevPAR for the United Kingdom hotels was also down but visitor arrivals are expected to grow in 2018. Pullman Hotel Munich saw strong RevPAR growth of 15.6 per cent for the quarter.
Vincent Yeo, chief executive officer of CDLHT's managers, said: “With a strong balance sheet and ample debt headroom, we are well-poised to actively pursue suitable acquisitions in markets with growth potential.”
As at June 30, CDLHT has a gearing of 33.2 per cent and regulatory debt headroom of S$609 million.