CDL Hospitality Trusts’ H2 DPS up 17.3% to S$0.0359 on continued global travel recovery

CDL Hospitality Trusts’ : J85 0% (CDLHT) distribution per stapled security (DPS) rose 17.3 per cent to S$0.0359 for the second half of 2022 ended Dec 31, from S$0.0306 a year earlier. 

Managers of the stapled group on Monday (Jan 30) observed positive momentum in rate growth across all its portfolio markets due to continued global travel recovery during the half-year period. The return of corporate groups and citywide events reinforced the recovery initially spurred by leisure demand, they added. 

Gross revenue for the half year rose 42.9 per cent to S$130.7 million from S$91.5 million, while net property income (NPI) increased 48.1 per cent to S$72.8 million from S$49.1 million. 

The rise in NPI was mainly attributed to the Singapore portfolio, which saw an NPI increase of SS$27.4 million year on year. 

CDLHT’s fourth quarter revenue per available room (RevPAR) for Singapore hotels, which includes W Singapore Sentosa Cove and Grand Copthorne Waterfront Hotel, grew 105.2 per cent to S$220 from S$107. This brought the H2 RevPAR to S$209, a 129.3 per cent rise from S$91 a year earlier.

Despite the absence of inbound visitors from China, Singapore’s biggest pre-pandemic inbound market, marquee events such as the Singapore Grand Prix in September 2022 drove the tourism rebound.

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On the other hand, the NPI for its New Zealand Hotel and Maldives Resorts declined by S$11.3 million over H2, while RevPAR for New Zealand also decreased 46.7 per cent to NZ$98 (S$84) from NZ$185 a year ago as long-haul flight capacity remained limited to only certain types travellers. 

Nonetheless, the managers expect the upcoming 2023 Fifa Women’s World Cup jointly hosted by Australia and New Zealand in Q3 2023 to boost international tourism numbers to the region.

Meanwhile, H2 RevPAR for the Maldives also decreased 5.8 per cent to US$263 from US$280 the year before, impacted by weaker top-line performance in Q4 amid the reopening of competitor resorts, as well as rising inflationary costs. 

With China’s border reopening, the managers noted that the return of the largest pre-pandemic visitor source market to the Maldives should mitigate the impact of the new supply of resorts, as well as the reopening of other resort destinations. 

CDLHT’s Japan hotels saw NPI increase by S$700,000 year on year to S$1 million for H2 2022, on the lifting of pandemic-related entry restrictions last October. 

DPS for FY2022 was S$0.0563, up 31.9 per cent from S$0.0427 a year earlier. 

Gross revenue for the full year was S$229.4 million, up 45.4 per cent from S$157.7 million last year. NPI rose 43.7 per cent to S$123.7 million from S$86.1 million.

As at Dec 31, CDLHT’s total portfolio value increased by 6.2 per cent or S$163.7 million year on year to S$2.8 billion, mainly due to the Singapore portfolio, the inclusion of Hotel Brooklyn and construction progress of The Castings.

Vincent Yeo, chief executive officer of CDLHT’s managers, said that amid a gloomy economic environment, exacerbated by higher borrowing costs and inflationary cost pressures, it is gratifying to see travel demand continuing its robust recovery trajectory.

“China’s reopening should boost international tourism in 2023 and beyond, helping to mitigate the inflationary cost challenges and higher interest rate environment,” Yeo added.

Stapled securities of CDLHT rose 0.8 per cent or S$0.01 to close at S$1.35 on Friday.