SINGAPORE – Shareholders of Singapore’s three listed hospitality real estate investment trusts (Reits) will enjoy higher dividend payouts on the back of a recovery in travel this earnings season.
Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust have posted impressive first-half results, thanks to a surge in travel demand.
Ascott, a unit of the CapitaLand group, last week unveiled distribution per stapled security (known more commonly as dividend per share or DPS) of 2.33 cents for the first half ending June 30, up 14 per cent from the year before.
Meanwhile, CDL’s first-half DPS jumped 67.2 per cent as strong leisure demand saw occupancy rates at its numerous hotels rise.
The company declared a first-half dividend of 2.04 cents, compared with 1.22 cents a year ago, as leisure demand spiked after the April border reopening.
As its hotels in Singapore, Britain and the Maldives filled up, net property income collectively grew by 37.8 per cent for the half year to end-June.
It is similar for Far East Hospitality Trust, whose first-half DPS surged 40 per cent to 1.54 cents per unit, compared with 1.1 cents during the first half of last year.
Boosting the dividend payout cache to $30.6 million were divestment gains from the sale of its properties at Village Residence Clarke Quay.
Although gross first-half revenue slid 1.4 per cent to $41 million due to the divestment, net property income for the group grew 3.5 per cent to $37.5 million.
What is particularly encouraging is the strong growth in occupancy and top-line revenue for the three Singapore-listed hospitality Reits.
Ascott’s properties in France and Britain have outperformed pre-pandemic levels, while the revenue outlook in other markets like Japan and China looks strong.
During a recent interview with The Straits Times, chief executive Kevin Goh highlighted that the group also has a growing stable of rental housing and student accommodation.
He said the group plans to increase its asset allocation into longer-stay and more revenue-resilient student accommodation and rental apartments from 15 to 20 per cent now, to 25 to 30 per cent of portfolio value over the coming decade.
For CDL, first-half revenue per available room (RevPAR) for its Singapore hotels like W Singapore surged 72.1 per cent to $123.
“Hospitality Reits benefit from the resurgence in and pent-up demand for travel,” noted UOB Kay Hian analyst Jonathan Koh.
“Tickets for the Singapore Grand Prix in September have sold out and meeting, incentive, convention and exhibition events should pick up in the second half of 2022.”
DBS Group Research noted that RevPAR recovery for the three hospitality Reits in the April to June period had been the “sharpest” in any single quarter, with some markets seeing a doubling in the numbers.
“The performance was led by a global recovery in both occupancy and room rates, with the exception of Japan and China,” its Aug 2 report said. “We believe this is just the start of a meaningful upturn in RevPAR to more normalised rates.”
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MCI (P) 031/10/2021, MCI (P) 032/10/2021. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2021 SPH Media Limited. All rights reserved.