CDL Hospitality Trust

[Nick]

CDL HOSPITALITY TRUSTS PROPOSES TO ACQUIRE STUDIO M HOTEL SINGAPORE

• Purchase Consideration values Studio M Hotel at S$154.0 million or approximately S$428,000 per key

• Hotel achieved impressive occupancy of 88.9% in 2010 despite only operating for seven full months

• Well-located property with contemporary design set to capture growing business and leisure segments in Singapore’s burgeoning tourism and hospitality industry

• Broadens earnings base, enhances overall portfolio stability and returns to Stapled Security Holders

http://info.sgx.com/webcoranncatth.nsf/V...6007C61B8/$file/Proposed_Acquisition_StudioM_PressRelease.pdf?openelement [Press Release]

http://info.sgx.com/webcoranncatth.nsf/V...6007C3F82/$file/Proposed_Acquisition_StudioM_Announcement.pdf?openelement [SGX Announcement]

http://info.sgx.com/webcoranncatth.nsf/V...6007C522E/$file/Proposed_Acquisition_StudioM_PresentationSlides.pdf?openelement [PPT Slides]

[Musicwhiz]

Business Times - 26 Oct 2011

CDLHT's Q3 distribution per security up 9.1%

Distribution per security at 2.77 cents; group projects mixed outlook for the sector

By KALPANA RASHIWALA

CDL Hospitality Trusts, which posted a 9.1 per cent year-on- year increase in distribution per stapled security for the third quarter ended Sept 30, 2011, yesterday pointed to some headwinds for the Singapore hotel market ahead.

First, the 5.6 per cent projected increase in net hotel rooms inventory in Singapore next year is expected to contribute to a more competitive environment. On the demand side, the outcome of the European debt crisis and the health of the US economy may have an impact on Asian economies which may affect visitor arrivals and the hospitality sector, the stapled group said. 'There are indications in the market that companies are becoming more cautious about travel budgets in view of the economic uncertainty,' CDLHT said.

On a more upbeat note, it said that the Singapore hospitality sector is expected to continue to benefit from the addition of new leisure attractions, including the two recently launched US night clubs at Marina Bay Sands and the upcoming opening of the Transformers ride at Universal Studios Singapore.

CDLHT posted distribution per stapled security of 2.77 cents for Q3 2011, up 9.1 per cent from the same year-ago period. The stapled group, which makes distributions semi-annually, will not be making a payout for Q3.

It owns six hotels in Singapore - Orchard, Grand Copthorne Waterfront, M, Studio M, Copthorne King's and Novotel Clarke Quay - and Orchard Hotel Shopping Arcade. Also in CDLHT's portfolio are Rendezvous Hotel Auckland and five hotels in Brisbane and Perth.

For the first nine months of 2011, the distribution per stapled security is 8.11 cents, up 9.2 per cent y-o-y. The Q3 and nine-month distribution figures reflect payout ratios of about 90 per cent, as CDLHT is retaining about 10 per cent of income available for distribution as working capital to fund its capital expenditure requirements.

The distribution per stapled security for Q3 2011 and for the first nine months of 2011 translate into annualised distribution yields of 7.23 per cent and 7.13 per cent respectively, based on CDLHT's $1.52 closing price yesterday. The counter slipped three cents yesterday. CDLHT's results were released yesterday morning before the stock market opened.

In a note yesterday, Standard Chartered Bank analysts said they are reducing distribution per stapled security estimates for 2012-14 by 17-23 per cent as they now expect CDLHT's portfolio revenue per available room (RevPAR) to fall 20 per cent next year before recovering by 10 per cent in 2013. 'While our economists expect our key tourist markets to have economic growth of 5-6 per cent in 2012, we think Singapore could see a 2-4 per cent decline in tourist arrivals in 2012 if these economies grow slower than expected.' It added that CDLHT has priced in a 21 per cent decline in RevPAR in 2012.

Year to date, the counter is one of the main underperforming Singapore Reits, falling 26 per cent compared with the Singapore Reit Index decline of 10 per cent, Stanchart added.

The stapled group's gearing ratio rose from 21.1 per cent at end-September 2010 to 26.5 at end-September 2011.

For Q3 2011, CDLHT posted a 9.9 per cent y-o-y rise in income available for distribution to $29.6 million - of which $2.96 million will be retained as working capital to fund the capex, leaving about $26.65 million to be paid to security holders.

Gross revenue climbed 15.2 per cent to $36.4 million for Q3 2011 - due to improved hospitality performance across the portfolio and contribution from Studio M Hotel, acquired in Q2 2011 and which accounted for about $2.8 million of the gross revenue increase.

Net property income (NPI) posted a 12.7 per cent y-o-y rise to $33.99 million in Q3, due chiefly to the revenue boost from Studio M Hotel and contribution from the overseas properties. All hotels except for M Hotel, Copthorne King's Hotel and Orchard Hotel recorded an improvement in NPI. For the first two properties, the drop was due to the absence in Q3 2011 of writebacks of property tax accruals booked in Q3 2010.

Orchard Hotel's NPI slipped primarily because of a refurbishment which saw 2,268 rooms nights being taken out of its inventory during Q3 2011. In fact, Orchard Hotel was the only one of CDLHT's Singapore hotels which registered a drop in RevPAR to the tune of 2.3 per cent in Q3 2011 over Q3 2010.

Overall, the Singapore hotels (excluding Studio M Hotel) posted 6.2 per cent y-o-y growth in RevPAR to $211 in Q3 2011. This is the second highest RevPAR that CDLHT has achieved in a quarter since its inception in 2006 - despite the weakness in travel demand in August. 'Aside from the usual slowdown of travel from the western hemisphere due to the August summer holidays, three public holidays in Singapore in August 2011 - compared to only one in the same period last year - also curtailed business travel during the month,' CDLHT said. Studio M Hotel continued to do well in Q3 2011, achieving RevPAR of $173, reflecting y-o-y growth of 13.6 per cent.

For Q3 2011, the group's Singapore hotels (including Studio M) posted a 14.6 per cent y-o-y hike in combined hotel revenue to $81.5 million. Gross operating profit for the Singapore hotels rose 17.9 per cent y-o-y to $44.2 million in Q3 2011.

[kayhian]

Recent price weakness should be seen as buying opportunity.

Let's see how aggressive the sellers are

[kayhian]

SINGAPORE – CDL Hospitality Trusts reported on Friday a 3.2 per cent drop in income available for distribution per stapled security in the first quarter.

CDL Hospitality Trusts, a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust, said distribution per unit fell to to 2.69 Singapore cents, compared with 2.78 cents in the same period last year.

Gross revenue slid 1.3 per cent to S$37.9 million, primarily due to lower contribution from the Singapore Hotels. This was mitigated by higher revenue from the overseas properties, including the receipt of a full year’s variable income of S$2 million from the Australia Hotels as compared to the S$1.8 million recognised in the same period last year, and a S$1.2 million revenue boost from the recently acquired Angsana Velavaru resort in the Maldives.

In tandem with the lower gross revenue, net property income in the first quarter fell 2.1 per cent to S$35.3 million.

Accordingly, income available for distribution (before deducting income retained for working capital) fell 2.8 per cent to S$29 million.

The management said the performance was in line with its earlier guidance in demand compared with the same period last year, due to the absence of the bi-annual Singapore Airshow and the Chinese New Year falling in February, both of which disrupted corporate travel to a greater extent than usual.

“Overall, there continues to be a slowdown in corporate travel and meetings as more companies tighten their travel budgets amidst an uncertain global economic environment,” said Mr Vincent Yeo, CEO of M&C REIT Management.

---

Luxury hotels worst-hit this 1Q13

Overall weak first quarter for hospitality.

In a Singapore flash note, DBS Vickers said that luxury hotels saw the largest drop in RevPARs. Other sub-segments like the mid-tier and economy hotels showed some resilience, but still their yoy performance dipped, suggesting hospitality's general weakness compared to the same period last year.

Here's more from DBS:

We note that Singapore Tourism Board (STB) has released the latest available hotel statistics for Feb13. While it seems fairly dated, it does gives us an insight into the trends to be reported by the hospitality players in the coming days.

Singapore Tourism Board statistics indicate a weak start to 1Q13: Luxury hotels are the worst hit. Industry room revenue was S$427.8m, which was a 7.2% drop y-o-y. Occupancy rates remained fairly stable at 84-86% but average daily rates (ADRs) were weaker at c.2.7% y-o-y at S$252.2/night. RevPAR was 3.1% lower y-o-y at S$215/night. Occupancy rates remained fairly firm but performance on a sub-sector basis varies, with the luxury hotels seeing the largest drop in RevPARs (up to -14% y-o-y) while the other sub-segments (midtier, upscale and economy) hotels showing more resilience (RevPAR performance range between -3% to -1% fall y-o-y). We note that the most resilient sub-segments were the mid-tier and economy hotels which saw marginal weakness on a y-o-y basis.

We will like to highlight that this is not unexpected and hoteliers in the previous results season back in Jan13 had given indication of weaker operational trends at the start of 2013 and we have been anticipating a weak start to the year. We believe the operational weakness seen in the first two months of 2013 was due to (i) the longer break owing to the festive Chinese Lunar New Year (CNY) being in Feb13 ( vs Jan12 ) which resulted in corporate travellers delaying their business trips till after the festive period, (ii) a strong start in 2012 "distorting" the y-o-y performance due to a strong line-up of conferences and events, especially the Singapore Airshow , held in Feb12, helped to boost accommodation demand a year back, (iii) the strong S$; travellers have remained more conscious on their choices of hotels and have been "trading down" to cheaper accommodation choices.

In an attempt to remove the effects of the seasonal impact due to the festive period, we compare the performance of the first two months of 2011 (note that CNY was also in Feb) and noted that the hotel sector's performance remained stronger with most sub-sectors seeing higher RevPARs to the tune of 0-12%.

What does it mean for hoteliers' results

This suggests that hoteliers (CDL Hospitality Trust, FarEast Hospitality Trust, Ascott REIT, Global Premium Hotels) that are due to report their first quarter results in the coming days aren't likely to show good results. However, we believe this should already be expected by the market given the fairly clear guidance by various management teams back in Jan13. We believe that a more important datapoint to watch out for is whether there is a recovery in accommodation demand post the festive period, which seems to be the case, based on our conversations with the various hoteliers. Nevertheless, while most hospitality S-REITs are expected to see weaker y-o-y results, we believe that the weaker operational performance of CDL Hospitality Trust (CDREIT)'s Singapore hotels will be buffered by contribution of Angsana Velavaru (acquired at a yield of close to c.10% and completed in Jan13)

[KopiKat]

AEI plans for Orchard Hotel Shopping Arcade

Looks set for a small (?) short term negative impact to DPU from additional debts & disruption. Some extracts,

Scheduled to commence in late 2013, the AEI is expected to complete in 12 months, during which the mall will be closed. A soft opening of the revamped mall is expected by end 2014.

.

The AEI is expected to cost approximately S$25.0 million, including construction cost which will be fully funded by debt, estimated disruption costs to the adjoined Orchard Hotel, and the loss of rental income during the period of mall closure.

Upon completion of the AEI, OHSA will boast an increased net lettable area (“NLA”) of approximately 10,000 sq ft. Incremental rental income of OHSA is expected to be more than S$2.0 million on an annualised basis. This would translate into an estimated gross return on investment (“ROI”) of more than 8.0%.


<Not Vested>

[kayhian]

CDL Hospitality Trust’s Orchard Hotel Shopping Arcade In $25m Revamp

CDL Hospitality Trusts (CDLHT) announced a $25 million asset enhancement plans for Orchard Hotel Shopping Arcade (OHSA) to re-position it as a family-centric mall with enhanced retail offerings. Scheduled to commence in late 2013, the asset enhancement initiative (AEI) is expected to complete in 12 months, while a soft opening of the revamped mall is expected by end 2014. “We are excited to embark on this makeover of OHSA, which will significantly raise its profile and leasing appeal. This undertaking will enable us to realise the full potential of OHSA and further unlock greater value from our existing properties,” said Vincent Yeo, chief executive officer of M&C REIT Management, the manager of CDL Hospitality Real Estate Investment Trust.

Significance: The revamped mall is poised to benefit from growing residential catchment and vibrant retail activity along Orchard Road. More importantly, the revamp is expected to deliver ROI (return on investment) of more than eight percent, with increased net lettable area and incremental rental income of more than $2 million on an annualised basis.

[mkmk]

Financial Statement: http://infopub.sgx.com/FileOpen/ResultsA...eID=261716

Press Release: http://infopub.sgx.com/FileOpen/PressRel...eID=261718

Presentation Slides: http://infopub.sgx.com/FileOpen/3Q2013_R...eID=261717

Summary of 3Q2013 results
• Income available for distribution per Stapled Security (after deducting income retained for working capital) of 2.64 cents for 3Q 2013 and 8.05 cents for YTD Sep 2013
• Angsana Velavaru Maldives continues to boost income positively
• CDLHT remains well-poised for acquisitions with healthy gearing of 28.1%

(not vested)

[lonewolf]

Very interesting development forthcoming for CDL Htrust.

In a low-key announcement, CDL Htrust announced the acquisition of Jumeirah Dhevanafushi in the Maldives at a purchase price of US$59.6 million. In itself, its not a big acquisition but the most interesting aspect is that the dormant Business Trust (BT) component of the trust will be activated to be the master lessee for the operations.

So CDL Htrust will be the second listed stapled security to have both the REIT and BT active. So it will be interesting to see how Mr Market react to the latest development. With the downward trajectory of the general REIT market, its hard to tell. My guess would be it fairly insignificant component for now. So the BT's overall contribution will be fairly minor.

Press Release: CDL HOSPITALITY TRUSTS TO ACQUIRE SECOND MALDIVES PROPERTY, JUMEIRAH DHEVANAFUSHI
Presentation Slides: Acquisition of Jumeirah Dhevanafushi, Maldives

[kayhian]

Source: Lim & Tan

CDL Hospitality Trust ($1.785, up ½ cent) 2Q’14 DPU fell 8% yoy
and 9% qoq to 2.5 cents hurt by weaker performances of hotels
in Singapore, Australia and offset partially by their acquisition
of Jumeirah Dhevanafushi. 1H’14 DPU declined 3% to 5.25
cents. The weak performance of their Singapore hotels refl ect
restraint in corporate travel budgets in an uncertain macro
economy, increased competition due to the huge increase in new
supply of hotel rooms. As well, lower rental contribution due to
on-going AEI at Claymore link also impacted performance. The
weaker Aussie dollar, slower GDP growth in Australia and lower
mining activities impacted their hotels in Australia. This was
offset partially by their new resorts in Maldives which saw full
contributions (+44.3% net property income to $2.3mln in 2Q’14).
Looking ahead, management expects the 4.2% increase in hotel
room supply in Singapore to 2017 (1,500 new rooms opening in
2014) to pressure occupancy and room rates while the Australian
hotels will continue to remain under pressure due to the continuing
slowdown in the mining sector while their reports in Maldives will
continue to perform well backed by rising Chinese tourists. While
its dividend yield of 5.6% is reasonable, the challenging outlook
means that there could be downside risks to the dividend payment
(2Q’14 DPU has already declined 8-9% on a yoy and qoq basis).
We maintain our “Neutral” stance.

[cyclone]

Proposed Divestment of Mercure Brisbane and Ibis Brisbane for A$77.0 Million

CDL Hospitality Trusts,  a stapled group comprising CDL Hospitality Real Estate Investment Trust ("H-REIT") and CDL Hospitality Business Trust (“HBT”), announced that DBS Trustee Limited in its capacity as trustee of H-REIT, has today indirectly entered into an agreement for the sale of Mercure Brisbane and Ibis Brisbane to CR Hotel Target Pty Ltd, an independent third party purchaser, for A$77.0 million (approximately S$79.6 million).

The Sale Price translates to an attractive exit yield of 5.3% on the fixed rental, representing a 43.4% premium over the original purchase price of A$53.7 million and a 10.0% premium over the independent valuation of A$70.0 million, as stated in the valuation report dated 22 December 2017.

More details in http://infopub.sgx.com/FileOpen/Press_Re...eID=483025