CDL H-Trust – BT

CDLHT Q2 distributable income rises 38.7%

CDL Hospitality Trusts (CDLHT) posted a stronger set of results for the second quarter ended June 30, 2010 as hospitality performance improved across its portfolio.

CDLHT – which comprises CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust – registered a 38.7 per cent year-on-year increase in income available for distribution to $24.1 million for Q2 2010.

Gross revenue was up 51.9 per cent to $30.7 million for the second quarter while net property income rose 49.2 per cent to $28.7 million.

Income to be distributed per stapled security is 2.57 cents, versus 1.89 cents in Q2 2009.

For H1 2010, CDLHT’s income available for distribution was $45.7 million, up 28.6 per cent year on year while gross revenue rose 34.1 per cent to $57.3 million, on the back of improved hospitality performance across the portfolio and contribution from recently acquired hotels in Australia.

With Singapore’s tourism industry continuing to see strong growth momentum, average occupancy at its Singapore hotels jumped 13.1 percentage points to 88.5 per cent for Q2 2010 while average daily rate rose 23.6 per cent to $220.

Revenue per available room surged 45.4 per cent during the quarter to $195.

With additional attractions to open at the two integrated resorts and upcoming events such as the Formula One Singapore Grand Prix, CDLHT expects to benefit from the anticipated increase in demand for hotel rooms.

The trust owns five hotels in Singapore and Orchard Hotel Shopping Arcade. It also owns five hotels in Australia, which it acquired in February this year, and a hotel in New Zealand.

Vincent Yeo, CEO of M&C REIT Management, the manager of H-REIT, said: ‘CDLHT experienced a very robust second quarter with the growth momentum of our Singapore hotels’ performance accelerating compared to the first quarter.’

Having raised $200 million on July 1 through a private placement – which helped to reduce gearing to 18.6 per cent – and with its recently announced $1 billion multicurrency medium-term note programme (through a wholly owned subsidiary), CDLHT is in a better position ‘to capitalise on acquisition opportunities’. It is eyeing markets such as India, Japan as well as Singapore.

‘Studio M hotel (in Singapore) could be its top acquisition choice given the shorter-than-expected gestation of Studio M; with occupancy over 90 per cent and average room rate of $170,’ DMG Research suggested in a report yesterday.

DMG maintained a target price of $2.30, highlighting that acquisitions would likely boost longer-term DPU growth potential.

The counter closed six cents higher in trading yesterday at $2.