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CDL Hospitality Trusts’ (CDLHT) distributable income increased to S$24.18 million in the third quarter of 2016, up by 3.8 percent from S$23.29 million during the same period a year ago.
However, for the first nine months of the year, the income available for distribution declined by 2.8 percent to S$67.46 million versus the S$69.40 million recorded from Q1 to Q3 2015.
Nevertheless, net property income (NPI) for Q3 2016 rose 5.3 percent to S$34.83 million in Q3 2016 from S$33.08 million a year ago, while that for the first three quarters edged up by 0.7 percent to S$99.87 million from S$99.20 million previously.
The growth was mainly due to inorganic contribution from its hotel at Cambridge in the United Kingdom, improved performance from its Auckland hotel, as well as incremental contribution from the Claymore Connect shopping mall adjacent to Orchard Hotel.
Earnings of its hotels in Japan also improved due to the stronger Japanese Yen. However, the growth in NPI was partially offset by continued weakness in the Singapore and Maldives hospitality markets, while the hotels in Australia posted lower rent contributions amidst the smaller variable income contribution from FY2015.
In particular, the combined average occupancy rate of its hotels in Singapore climbed to 90.7 percent in the third quarter from 90.2 percent in Q3 2015. But for the first three quarters, it dipped to 86 percent from 88.2 percent during the corresponding period last year.
Its six hotels in the city-state are Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King’s Hotel, Novotel Singapore Clarke Quay and Studio M Hotel.
The average daily rate for these hotels also fell by 7.5 percent from S$201 to S$186 in Q3 2016, while that for the first nine months declined by 5.5 percent from S$199 to S$188.
Their revenue per available room (RevPAR) for the latest quarter also dropped by 7.2 percent to S$168 from S$181 a year ago, while that for nine-month period receded by 8.0 percent to S$162 from S$176 previously.
According to Credit Suisse, the RevPAR for Q3 2016 was lower mainly due to a softer F1 race in Singapore this year, Zika fears and the continued softness in corporate travel. Furthermore, RevPAR for the first 26 days of October was down 13.4 percent year-on-year.
“Zika has not had a significant impact on room cancellations but may have impacted travellers’ decisions to come to Singapore,” added the bank.
As such, CDLHT’s RevPAR is expected to fall by 9.0 percent for the whole of 2016 compared to a 6.0 percent drop last year. Nonetheless, Credit Suisse maintains its outperform rating on the trust.
Singapore-listed CDL Hospitality Trusts, a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust, is one of Asia’s leading hospitality trusts with assets valued at S$2.5 billion.
As of September 2016, it owns six hotels and a retail mall in Singapore, five hotels in Brisbane and Perth, two resorts in Maldives, two hotels in Tokyo, one hotel in Auckland and a hotel in Cambridge, UK.
Image: Room at Hilton Cambridge City Hotel (Source: CDL Hospitality Trust)
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.