ARA H-Trust posts NPI of US$9.1m for H1; no distributable income

ARA US Hospitality Trust (ARA H-Trust) on Thursday posted a net property income (NPI) of US$9.1 million for the six months ended June 30, reversing from a net property loss of US$2 million in the year-ago period, as the stapled group continues to recover from the pandemic.

Revenue was up 34.3 per cent to US$52.8 million, from US$39.3 million the year before, ARA H-Trust's managers said in a press statement.

Its managers reported no distributable income for the period, after deducting reserves set aside for capital expenditure for the Jan 1 to June 30 period. This relates to routine capital asset improvements and refurbishments for hotel properties.

The income before reserves set aside for capital expenditure amounted to around US$2.8 million, after deducting loan interest expenses, other trust expenses and fees payable to the Reit trustee and managers.

Net asset value per stapled security as at June 30, 2021, was US$0.61, down slightly from US$0.62 as at Dec 31, 2020. This was mainly due to accounting depreciation of the properties, partially uplifted by the income generated from hotel operations in H1 2021, the managers said.

The managers said the ARA H-Trust portfolio "picked up momentum" from rising domestic travel and hotel demand, leading to sequential improvements in quarterly performance across all brands. 

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

In the first half, average occupancy and average daily rate stood at 51.2 per cent and US$101 respectively. Revenue per available room was US$52. 

The stapled group's aggregate leverage stood at 49 per cent. There are no refinancing requirements until 2022, the managers added. They have also secured loan covenant waivers from Singapore-based relationship banks up to December 2021. 

The managers expect the US hospitality market to further strengthen and rebound closer to pre-pandemic levels in the months ahead as the summer travel surge continues. There have also been emerging signs of a return in business travel as more companies approve corporate travel. 

Lee Jin Yong, chief executive of the managers, said: "As our portfolio is oriented towards domestic leisure and business travellers, we anticipate that the trust's performance will be in the vanguard of the US hospitality market recovery."

ARA H-Trust is a pure-play US upscale select-service hospitality trust that was listed on the Singapore Exchange in May 2019. It is a stapled group comprising ARA US Hospitality Property Trust, a real estate investment trust, and ARA US Hospitality Management Trust, a business trust.

Stapled securities of ARA H-Trust closed 0.9 per cent or 0.5 US cent lower at 53.5 cents on Wednesday.