CDL Hospitality Trusts has reported a distributable income of S$20.3 million for the period of June 12 to the end of December.
This works out to a distribution per unit of 2.89 cents – almost 22 percent higher than forecast in its IPO prospectus.
The results are helped by strong growth in visitor numbers from key markets and rising hotel rates in Singapore.
Apart from a better-than-expected distributable income, CDL Hospitality Trusts or H-REIT also booked a net property income of S$25.9 million from June 12 to the end of December – beating its IPO prospectus forecast by 14.8 percent.
M&C REIT management, a unit of property developer CityDev, manages the real estate investment trust.
Vincent Yeo, CEO, M&C, REIT Management, says, “The market was extremely strong in the last quarter. We achieved a rate growth of over 20 percent.
“Even with the rate increases in 2006, Singapore rates are very lower compared to say the Middle East, India, China and Japan. We still like Singapore very much. We still think there’s more upside in terms of hotel performance.”
The trust manager says it believes there is a good chance Singapore’s hotel industry could exceed its expected growth rate of 15 percent this year.
H-REIT now owns four hotels in Singapore.
It has plans to acquire one or two more properties here, but did not name any targets.
As part of its growth strategy, H-REIT is adding 20 more rooms to its Grand Copthorne Waterfront Hotel here.
It is also looking to upgrade the Orchard Hotel shopping complex or to convert it into more hotel rooms.
However, the management did not reveal any timeline, saying only that it is now looking at cost figures and architectural plans.
M&C REIT management says it also aims to grow its overseas assets, potentially having them make up 40 percent of its assets down three years.
The trust recently made its first and only overseas acquisition – a downtown hotel in New Zealand, which takes up just over 10 percent of its portfolio size.
It will be focusing on properties in high growth markets like the United Arab Emirates, China, India and Vietnam, where it says room rates are enjoying phenomenal growth.
Mr Yeo says, “They’re all at S$300 or S$400 levels or higher for 4-, 5-star products. And of course what’s underpinning it is very strong business growth and visitor arrival growth to these countries.”
The trust manager says it plans to double H-REIT’s asset size in three years – as stated earlier in its IPO prospectus.
Source: Channel NewsAsia, 31 January 2007