CDLH-Trust – BT

CDLHT hotels enjoy strong demand

CDL Hospitality Trusts (CDLHT) achieved a record average occupancy rate of 91.6 per cent for its five Singapore hotels in the third quarter of this year, up 5.5 percentage points from the same year-ago period following strong visitor arrivals growth in Singapore.

Average daily rate rose 23.4 per cent over the same period, while room revenue per available room (RevPAR) for the Singapore properties rose 31.2 per cent year on year to $199 in Q3.

Helped by the improved performance of its Singapore hotels and a $4.3 million contribution from the Australian hotels acquired in Q1 this year, CDLHT’s gross revenue rose 38.4 per cent year on year to $31.6 million in Q3. Net property income swelled 40.9 per cent year on year to $30.16 million. Income available for distribution to stapled-security holders increased 44.6 per cent to $26.9 million but CDLHT is retaining $2.694 million for working capital (to fund refurbishment and other capital expenditure). Income available for distribution to stapled-security holders after deducting the retained sum increased 42.8 per cent to $24.2 million, reflecting distribution per unit of 2.54 cents for Q3. On an annualised basis, this works out to 10.08 cents, translating to an annualised distribution yield of 4.69 per cent based on CDLHT’s closing price of $2.15 as at Oct 28. The counter ended one cent lower at $2.14 yesterday.

CDLHT, which makes distributions semi-annually, will not be making a payout for Q3.

The trust owns five hotels in Singapore – Orchard, Grand Copthorne Waterfront, M, Copthorne King’s and Novotel Clarke Quay – and Orchard Hotel Shopping Arcade. It also owns Rendezvous Hotel Auckland and five hotels in Brisbane and Perth.

For the first nine months of 2010, gross revenue rose 35.6 per cent year-on-year to $88.95 million. Income available for distribution (less income retained for working capital) climbed 32.6 per cent to $65.4 million.

Standard Chartered Bank said in a report yesterday: ‘With gearing of 21 per cent and its entire portfolio of $1.74 billion of assets unencumbered, we think (CDLHT) can make any acquisition highly accretive. Potential acquisitions include Studio M at about $150 million from the sponsor (Millennium & Copthorne Hotels) within the next six months.’