CDL H-Trust – BT

CDLHT’s DPU rises 5.8% in fourth quarter

Its S’pore hotels, excluding Studio M, post Q4 RevPAR of $205, up 6%

CDL Hospitality Trusts (CDLHT), which has posted a 5.8 per cent year-on-year rise in distribution per stapled security for Q4 2011, continues to look for acquisition targets in Asia Pacific markets.

‘Singapore still remains our favourite market in terms of visibility and prospects,’ said Vincent Yeo, CEO of M&C Reit Management, the manager of CDLHT, at a media briefing yesterday.

The stapled group posted distribution per stapled security of 2.94 cents for Q4 2011, up 5.8 per cent from the same year-ago period. Over the same period, CDLHT’s gross revenue rose 13.4 per cent to $37.8 million – thanks to improved hospitality performance across the portfolio and contribution from Studio M Hotel in Singapore, which was acquired in May last year

Net property income for Q4 improved 12.7 per cent year-on-year to $35.5 million.

The stapled group, which makes semi-annual payouts, will distribute 5.71 cents per stapled security for the July 1-Dec 31, 2011 period, or 7.5 per cent higher than the same year-ago period. The payout for H2 2011 will comprise 5.33 cents of taxable income and 0.38 cent tax-exempt income. The counter ended 6.5 cents higher at $1.775 yesterday.

The group’s Singapore hotels achieved strong performance for Q4 as well as full-year 2011. Fuelled by the growth in visitor arrivals, revenue per available room (RevPAR) of the hotels here, excluding Studio M, rose 6 per cent year-on-year to $205 in Q4 2011, the highest Q4 RevPAR since CDLHT’s inception in 2006, supported by high average occupancy of 88.6 per cent in the quarter. Including Studio M, the RevPAR for the Singapore hotels increased 6.1 per cent to $200 in Q4 2011.

Full year 2011, the Singapore hotels’ RevPAR (excluding Studio M) climbed 6.9 per cent to $204, just a tad below the all-time high annual RevPAR of $207 achieved in 2008.

This was despite an increase in hotel room supply in Singapore and room nights being taken out of Orchard Hotel’s inventory during the year for refurbishment. Excluding Orchard Hotel, the RevPAR growth would have been higher at 10.2 per cent in FY 2011 compared to a year ago.

The group’s five Australian hotels – in Brisbane and Perth – also continued to perform strongly, bolstered by the buoyant natural resource sector and static supply of hotel rooms.

Full-year 2011 gross revenue rose 15.4 per cent to $141.1 million. Net property income improved 17.5 per cent to $135.2 million. Distribution per stapled security climbed 8.3 per cent to 11.05 cents.

Last year, the group finished refurbishing the 331-room Claymore Wing of Orchard Hotel. By mid-January 2012, it also completed upgrading all the rooms at Novotel Clarke Quay. Asset-enhancement initiatives this year are likely to focus on less ‘visible’ back-of-house works like chiller replacements to boost hotel efficiencies and create energy savings, says Mr Yeo.

Last year, CDLHT retained 10 per cent of its income available for distribution as working capital to fund capex on asset enhancement initiatives, resulting in a payout ratio of 90 per cent. A ‘good guide’ on 2012’s payout ratio is the low-90s, says Mr Yeo.

M&C Reit Management acknowledged that the outcome of the European debt crisis, the depth of the recession in some European countries and the health of the US economy may have an impact on Asian economies which may affect visitor arrivals and the hospitality sector.

‘There are indications in the market that some companies are exercising caution about travel budgets in view of the economic uncertainty,’ it added.

On the flip side, the range of new attractions in Singapore – including the first phase of the Gardens by the Bay and the River Safari – as well as the stronger events calendar in 2012 could continue to draw visitors to Singapore, it added.