Hospitality S-Reits’ DPU rebound 32% in 2022

AS the earnings season conclude, Reits and property trusts listed in Singapore have announced financial results or published business updates for the period ended Dec 31, 2022.

Of the 30 S-Reits which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year on year (yoy). By sub-segments, the hospitality segment saw the highest median increase of 31.6 per cent while the healthcare and diversified segments were resilient at 1.6 per cent and 1.5 per cent respectively.

The five trusts with the highest yoy DPU increments for FY22 are: ARA US Hospitality Trust : XZL 0% (760 per cent), Paragon Reit : SK6U 0% (34 per cent), CDL Hospitality Trusts : J85 0% (32 per cent), CapitaLand Ascott Trust : HMN 0% (31 per cent) and Far East Hospitality Trust : Q5T 0% (24 per cent).

ARA US Hospitality Trust (ARA H-Trust) declared a distribution per stapled security (DPS) of 3.054 US cents for FY22, up 760 per cent from FY21’s 0.355 US cents.

This came on the back of stronger operating performance as the US lodging market continued to recover. It achieved higher revenue of US$169.0 million and net property income (NPI) of US$41.4 million in FY22, up 29.3 per cent and 66.4 per cent yoy respectively. This contributed to the 767.6 per cent yoy growth in FY22 distributable income.

Paragon Reit announced a change in its financial year-end from Aug 31, 2022 to Dec 31, 2022. Its latest FY22 reporting period was therefore a 16-month period from Sep 1, 2021 to Dec 31, 2022 and comparison of yoy DPU change was based on the current 16-month period in FY22 to a 12-month period in FY21.

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Its FY22 DPU was up 34.1 per cent to 7.24 Singapore cents from 5.40 Singapore cents in FY21. DPU for the four-month period ended Dec 31, 2022 was 1.72 Singapore cents, unchanged from the same period a year earlier.

CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent yoy. Accelerated global travel recovery saw most of CDLHT’s portfolio markets experience robust performance growth in FY22.

Driven by higher revenue achievement, its FY22 NPI increased by 43.7 per cent to S$123.7 million. The higher NPI was largely attributed to the Singapore portfolio and UK hotels.

In FY22, revenue per available room (RevPAR) for its Singapore portfolio increased 104 per cent to S$166 from S$82 in FY21.

CapitaLand Ascott Trust (CLAS) announced a FY22 DPS of 5.67 Singapore cents, up 31 per cent yoy. The trust saw strong operating performance as international travel recovers, lifting FY22 revenue per available unit (RevPAU) to S$120, up 74 per cent yoy.

As a result, FY22 revenue and gross profit increased 58 per cent and 63 per cent respectively.

The trust noted that to further enhance income stability, CLAS invested S$420 million in 15 accretive acquisitions in FY22, predominantly in the longer-stay segment.

Far East Hospitality Trust (Far East H-Trust) declared a FY22 DPS of 3.27 Singapore cents, up 24.3 per cent yoy.

NPI for FY22 increased by 2.9 per cent while total distributions increased by 25 per cent to S$65 million on the back of higher NPI, lower finance expenses, and sharing of gains from the Central Square divestment.

The trust noted that with the recovery of the hospitality sector, its hotels and serviced residences benefited from the increased flow of business and tourist traffic into Singapore. RevPAR for its hotel portfolio grew 64.3 per cent in FY22 to S$92 while RevPAU for its serviced apartment portfolio increased 39.3 per cent to S$195 in FY22. 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.