CDL Hospitality Trusts Q3 DPU down 3% on rights issue

Net property income (NPI) jumped 15.9 per cent to S$40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain.
Net property income (NPI) jumped 15.9 per cent to S$40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain.PHOTO: CDL HOSPITALITY TRUSTS

SINGAPORE - CDL Hospitality Trusts has posted a third-quarter distribution per stapled security (DPS) of 2.29 Singapore cents, down 3 per cent from 2.36 Singapore cents in the same period a year earlier.

The dip was due mainly to the effects of a right issue, excluding which DPS would have increased by 12.3 per cent.

Likewise, total distribution in the three months to Sept 30 was 13.3 per cent higher than a year earlier at S$27.4 million.

Net property income (NPI) jumped 15.9 per cent to S$40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain, which was acquired in May, and Pullman Hotel Munich in Germany, acquired in July.

A 56 per cent jump in NPI from Grand Millennium Auckland in New Zealand, as well as stable contributions from the Singapore hotels and Claymore Connect mall also lifted total NPI.

However this was partly offset by weaker takings from the Japan hotels and Maldives resorts, as well as a lower contribution from Hilton Cambridge City Centre which was further affected by a weakened Sterling pound.

Mr Vincent Yeo, chief executive of the trust's managers, said: "Our core market, Singapore, has shown incremental contribution this quarter despite the competitive trading conditions."

The trust's Singapore properties comprise Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King's Hotel, Novotel Singapore Clarke Quay and Studio M Hotel. Claymore Connect is a mall adjoining Orchard Hotel.

NPI from the Singapore properties rose 2.3 per cent in the third quarter from a year earlier.

Average occupancy rate at the six Singapore hotels in the third quarter was 88.7 per cent, down from 90.7 per cent a year earlier. Average daily rate was S$187, up from S$186 a year earlier.

Revenue per available room was S$166, down 1.4 per cent from S$168.

The trust said that the Chinese gourmet restaurant in Orchard Hotel, Hua Ting, is undergoing renovation and is expected to re-open by December. Refurbishment works are being planned for the guest rooms in one wing of the hotel in mid-December and are expected to be completed by April.

"While the hotel faces some disruption and revenue loss in the short term, the completed refurbishment exercise will improve overall guest experience and enhance the competitiveness of the asset," it said.

Earnings per stapled security was 2.22 Singapore cents, up from a restated 2.20 Singapore cents in the third quarter last year. Net asset value per stapled security was S$1.47 as at Sept 30, down from S$1.55 as at Dec 31 last year.

The units closed down two cents or 1.21 per cent to S$1.63 on Friday (Oct 27) after results were released.

Nomura analysts said in a note: "Overall, we expect the initial market reaction to be neutral - it appears that the hospitality market in Singapore could be close to bottoming out, but investors are waiting for the inflection point."