Hospitality S-Reits among April’s top performers, averaging 6% gains

IN the month-to-date period, till Apr 26, the iEdge S-Reit Index saw marginal gains of 1 per cent in total returns terms.

However, by sub-segments within the index, hospitality S-Reits were the best performing segment with average total returns of 6.1 per cent followed by data centre S-Reits at 1.7 per cent.

Office S-Reits saw the biggest decline of 8.9 per cent across the same period.

All four hospitality trusts were among the top five best performers of the iEdge S-Reit Index.

The top five performing trusts and their respective total returns were: CapitaLand Ascott Trust (8.5 per cent), Frasers Hospitality Trust (6.7 per cent), Mapletree Logistics Trust (5.6 per cent), Far East Hospitality Trust (5.1 per cent) and CDL Hospitality Trusts (4.2 per cent).

These five trusts garnered a total of S$33 million of net institutional fund inflows in the month to date.

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CapitaLand Ascott Trust (CLAS), the first hospitality trust to report Q1 2023 business updates, saw strong performance over the quarter.

Q1 2023 gross profit increased 59 per cent year on year (yoy), due to stronger operating performance and contributions from new properties.

Excluding the new properties, gross profit was still up significantly at 53 per cent growth yoy.

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The trust noted that 59 per cent of Q1 2023 income were contributed by stable income including master leases, management contracts with minimum guaranteed income (MCMGI) as well as longer-stay properties.

In particular, under the longer-stay properties segment, 98 per cent of student accommodation is leased for the academic year (AY) 2022-2023, compared to over 95 per cent for the previous AY.

Q1 2023 revenue per available unit (RevPAU) for CLAS was also up 90 per cent yoy on higher occupancies and room rates.

While the Q1 2023 RevPAU of S$127 is 93 per cent of pre-Covid Q1 2019 pro forma levels, several of CLAS’ key markets – Australia, Japan, Singapore and the US – performed at pre-Covid levels or above.

In particular, Japan’s RevPAU jumped 351 per cent yoy to 105 per cent of same-store pre-Covid levels, following Japan’s reopening to independent leisure travellers in October 2022.

According to data from the Singapore Tourism Board, Singapore’s visitor arrivals in March 2023 reached 1.02 million, the highest since the pandemic.

Average hotel room occupancy rate for March 2023 was at 80 per cent.

This was down from 84 per cent in February 2023, but up 19 per cent yoy.

Average room rate was also down from February’s S$278 to S$264, but up 39 per cent yoy. SGX RESEARCH

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.

Source: SGX Research S-Reits & Property Trusts Chartbook.