CDL Hospitality Trusts buys second Maldives property for US$59.6m

CDL Hospitality Trusts (CDLHT) has extended its foray into the Maldives with its acquisition of Jumeirah Dhevanafushi resort, its second property there, from Xanadu Holdings for US$59.6 million.

The 53,576-square-metre luxury resort, located on the private island of Meradhoo at the southern edge of the Maldives archipelago, comprises 19 beachfront villas, 16 over-water villas, an infinity pool, over-water gym and another two beachfront villas, to be built by Xanadu in 2014.

The resort's pro-forma annualised net property income yield is 6.2 per cent for the nine months ended Sept 30, CDLHT said in a statement yesterday. This translates into a distribution per stapled security (DPS) accretion of 2.2 per cent, with potential for upside as the resort is still undergoing gestation, having opened only two years ago, it added.

The acquisition, amounting to some US$61 million after transaction fees, will be funded entirely through debt financing via CDL Hospitality Real Estate Investment Trust's acquisition facility. Post-acquisition, CDLHT's gearing will increase from 28.1 per cent to 30.6 per cent.

CDLHT will provide working capital for all resort operations while Dubai-based Jumeirah Group will manage the resort.

This marks CDLHT's second acquisition in the Maldives this year, following its US$72.4 million purchase of Angsana Velavaru resort in January. Both transactions were brokered by Jones Lang LaSalle's Hotels & Hospitality Group.

"The Maldives has certainly captured the attention of the investment community across Asia and the Middle East," said Nihat Ercan, senior vice-president of Jones Lang investment sales for Asia.

"We are seeing significant interest and weight of capital from private investors, owner-operators, listed companies and institutional investors, and we expect this trend to continue into 2014."

Said Vincent Yeo, chief executive officer of M&C Reit Management, which manages CDLHT: "Jumeirah Dhevanafushi caters to the very top end of the upmarket resort sector in the Maldives. Notwithstanding that it is still undergoing gestation, it has achieved a healthy RevPAR (revenue per available room) of US$754 for the first nine months of 2013."

CDLHT posted a 2.9 per cent decline in DPS to 2.64 cents for the third quarter ended September, on the back of weaker hotel revenues despite a S$1.9 million revenue boost from Angsana Velavaru resort.

Its shares closed two cents lower at S$1.58 yesterday.