CapitaLand Ascott Trust H1 DPS flat at S$0.0253

[SINGAPORE] The manager of CapitaLand Ascott Trust (Clas) posted a distribution per stapled security (DPS) of S$0.0253 for the first half ended Jun 30, unchanged from the year-ago period.

The distribution will be paid out on Aug 28, after the record date on Aug 5.

Distributable income rose 11 per cent to S$107.1 million in H1, from S$96.5 million in the previous corresponding period. Total distribution rose 1 per cent year on year to S$97.5 million from S$96.5 million, after retaining S$9.6 million in non-periodic items.

Excluding non-periodic items related to realised exchange gain from bank loan repayments and from cross currency interest-rate swap settlements, core DPS fell 10 per cent year on year to S$0.0216.

The decline was largely due to transitional factors such as timing differences in acquisitions and divestments, where proceeds from the sale of Citadines Central Shinjuku Tokyo have yet to be fully received and redeployed.

Clas divested the property in 2025 for 25 billion yen (US$152.6 million) in 2025.

At Clas’ earnings briefing on Tuesday (Jul 28), CEO of the trust’s manager Serena Teo said the first tranche of proceeds from the sale, received in April, was used to pay down floating-rate sterling debt. The second tranche is expected to be received in September.

Revenue for the first-half fell 7 per cent to S$370.9 million from S$398.5 million in H1 2025, while profit declined 11 per cent to S$161.6 million from S$182.5 million.

Revenue per available unit (RevPau) for H1 2026 slipped 2 per cent year on year to S$147 from S$150. On a same-store basis, RevPau rose 1 per cent year on year, reflecting operational resilience despite macroeconomic uncertainties.

Clas’ Singapore assets recorded a 3 per cent year-on-year decline in RevPau to S$158 in the second quarter of 2026.

This was due to the progressive wind-down of operations at The Robertson House by The Crest Collection, which is being sold for S$360 million, and a moderation in visitor arrivals and transient travel. RevPau was flat at S$173 in H1.

The planned opening of Somerset Clarke Quay is on track for completion in 2026. Its expected opening in early 2027 should provide an additional income stream to Clas, mitigating the absence of income from The Robertson House.

In the US, Clas’ student accommodation segment recorded a 3 per cent year-on-year decrease in gross profit in H1, improving from the 15 per cent decline in the preceding half-year period.

For the academic year ending July 2026, the eight student housing properties have an average occupancy of 88 per cent and rent decreased marginally by 0.9 per cent due to softer leasing performance.

In the upcoming academic year, starting August, the properties are more than 95 per cent leased, with revenue expected to increase over 5 per cent year on year, said Teo.

She added that the Clas remains focused on recycling capital into higher-quality assets and value-enhancing asset enhancement initiatives (AEIs).

Clas completed refurbishment works at Sheraton Tribeca New York Hotel ahead of schedule in June 2026.

Total capital expenditure for its four ongoing or completed AEIs, together with the remaining redevelopment costs for Somerset Clarke Quay, is estimated at about S$270 million, of which Clas will fund around S$180 million. The balance will be borne by the properties’ master lessees or operators.

Renovation works at The Cavendish London is expected to be completed in 2027; Clas will distribute non-periodic and/or past divestment gains to mitigate the impact of the AEI.

Two projects to boost DPS

Teo said the combined contribution from Somerset Clarke Quay and The Cavendish London revamp, including the distribution top-up, is expected to lift DPS by about S$0.0016 in 2027 and S$0.0021 in 2028.

“In 2029, we think that these two projects could add another about S$0.005 above our current 2026 DPS,” she added.

On the proposed AEI for its Sydney Central Hotel, Teo said Clas is unlikely to proceed with the project at the scale originally planned, due to rising costs and inflation in Australia.

On divestments, she added that Clas continues to explore opportunities and is “looking for buyers for some of the fully priced assets”.

When asked about potential sales in the pipeline, Teo said: “We are constantly in discussions and when the price and conditions are right, we will bring these to market. We’re fairly close to closing at least one, so expect to see at least one more divestment for the rest of the year.”

Proceeds from divestments will be recycled into acquisitions, with a preference for living-sector assets, as Clas targets a medium-term portfolio allocation of 25 to 30 per cent in the segment.

Asked about expansion opportunities in the living sector, Teo said: “Clas is evaluating opportunities globally but will prioritise markets with resilient demand, deep and transparent institutional investment markets, and those denominated in its six core currencies.”

These are the Singapore dollar, US dollar, euro, sterling, Australian dollar and Japanese yen, which together account for more than 80 per cent of Clas’ gross profit.

As at Jun 30, Clas’ gearing stood at 37.7 per cent, with an average cost of debt of 2.8 per cent per annum and an interest cover ratio of 2.9 times.

Weighted average debt maturity was 3.5 years, with around 77 per cent of its total debt on fixed interest rates.

The counter closed 0.5 per cent or S$0.005 lower at S$0.91 on Tuesday, after releasing its H1 results in the morning.