CDLHT posts 7.4% rise in Q1 distribution per stapled security to 2.17 cents

CDL Hospitality Trust (CDLHT) reported a 7.4 per cent increase in distribution per stapled security (DPS) to 2.17 Singapore cents for the first quarter ended March 31.

This came on the back of higher net property income (NPI), which grew 5.4 per cent to S$37.82 million. Gross revenue rose 11.6 per cent to S$51.8 million.

Inorganic contribution from The Lowry Hotel in the UK and Pullman Hotel Munich in Germany, which was absent last year, boosted the portfolio's performance. Despite a competitive retail and hospitality landscape, the Singapore portfolio recorded an improvement in NPI.

These were partially offset by weaker contribution from Japan, Maldives and Australia properties, given the divestment of the Mercure Brisbane and Ibis Brisbane on Jan 11.

Vincent Yeo, CEO of CDLHT's managers of the stapled group comprising a Reit and a business trust, noted that the acquisitions undertaken in the past year has enabled CDLHT to benefit from a broader earnings base as different markets experience varying cycles.

Singapore, CDLHT's core market, is also showing improvement despite the strong hotels supply growth last year, he said. "We will continue to focus on the long-term potential of our assets by seeking asset enhancement opportunities to strengthen their competitiveness."

Part of the divestment gains from Mercure Brisbane and Ibis Brisbane in January this year will be used to make distributions to stapled security holders in fiscal 2018 to mitigate the net effect on the distributable income.

"With ample debt headroom and a robust balance sheet, CDLHT will continue to actively pursue suitable acquisitions to diversify and grow its income stream," it added.

Meanwhile, the renovation of guest rooms in the Orchard wing and the public spaces incorporating the un-refurbished food and beverage outlets of Orchard Hotel is likely to commence in the second-half of this year.

A phased room refurbishment exercise is also being planned for the second-half this year for Grand Copthorne Waterfront Hotel, which completed a makeover of its lobby, F&B outlets and a number of meetings rooms in 2016.

"Other asset enhancement opportunities in other hotels are also being evaluated to better position CDLHT for the recovery in the Singapore hotel sector," CDLHT managers said.