Welcome once again to this segment where we feature stock highlights from various companies.
This week, we summarise the results and prospects for four REITs.
CDL Hospitality Trusts (SGX: J85)
CDL Hospitality Trusts, or CDLHT, is a hospitality trust with assets under management (AUM) of S$2.9 billion as of 31 December 2021.
Its portfolio comprises 18 properties that include 4,631 rooms and a retail mall, and also one build-to-rent project with 352 apartment units.
For its fiscal 2021 (FY2021), revenue increased by 34.2% year on year to S$157.7 million, driven by the recovery in lodging demand in the second half of 2021 (2H2021) as travel restrictions were relaxed amid the dissemination of vaccines.
Net property income (NPI) jumped by 24.2% year on year to S$86.1 million.
Distribution per stapled security (DPSS), however, fell by 13.7% year on year to S$0.0427 due to a decline in capital distribution from its UK hotels and proceeds from the sale of two hotels.
At a unit price of S$1.14, CDLHT offers a trailing distribution yield of 3.7%.
The hospitality REIT’s gearing stands at 39.1% and it has a low cost of debt of just 2%.
CDLHT has a couple of asset enhancement initiatives (AEI) planned.
It is upgrading the remaining four floors of The Lowry Hotel which will be completed in early this year, and also plans to refurbish all 360 rooms at Studio M Hotel, to be completed by May 2022.
Ascott Residence Trust (SGX: HMN)
Ascott Residence Trust, or ART, is the largest hospitality trust in Asia Pacific with an AUM of S$7.7 billion as of 31 December 2021.
The trust owns 93 properties with more than 17,000 units located in 43 cities within 15 countries.
For FY2021, ART reported revenue of S$394.4 million, up 7% year on year.
Distributable income surged by 46% year on year to S$137.3 million while DPSS soared by 43% year on year to S$0.0432.
At a unit price of S$1.01, ART’s trailing distribution yield stands at 4.3%.
The trust continues to see encouraging signs, with vaccinations increasing across ART’s key markets.
More countries reopened themselves to international travel in 2H2021, contributing to better results.
The trust has been active in reconstituting the portfolio for income stability, with 11 investments in longer-stay accommodations since January last year.
ART is also rejuvenating its portfolio with new developments such as a student accommodation property in South Carolina in the US and the refurbishment and rebranding of Hotel Central in the US which has been completed.
Mapletree North Asia Commercial Trust (SGX: RW0U)
Mapletree North Asia Commercial Trust, or MNACT, owns a portfolio of 13 commercial properties in China, Hong Kong SAR, Japan, and South Korea.
Total AUM stood at S$8.4 billion as of 31 December 2021.
The REIT released its fiscal 2022 third quarter (3Q2022) business update and reported a healthy occupancy of 97.5% as of end-2021.
For the nine months ended 31 December 2021, gross revenue increased by 12.8% year on year to S$328 million while NPI improved by nearly 15% year on year to S$247.4 million.
The higher NPI was due to lower rental reliefs doled out to tenants as well as the contribution from the newly-acquired Hewlett Packard Japan Headquarters Building.
The REIT had an aggregate leverage ratio of 42.1% with a low annualised effective cost of debt of 1.84%.
82% of the REIT’s borrowings are on fixed rates, mitigating against the risk of rising interest rates.
MNACT is involved in a pending merger with Mapletree Commercial Trust (SGX: N2IU) that will catapult the combined REIT into the top 10 largest commercial REITs in Asia.
ESR-REIT (SGX: J91U)
ESR-REIT is an industrial REIT that invests in 56 properties across Singapore with a total AUM of S$3.2 billion as of 31 December 2021.
For FY2021, gross revenue inched up 5% year on year to S$241.3 million while NPI increased by 5.5% year on year to S$173.3 million.
Distribution per unit (DPU) climbed by 6.7% year on year to S$0.02987.
At a unit price of S$0.41, ESR-REIT’s units offer a trailing distribution yield of 6.9%.
The REIT’s gearing stood at 40% as of 31 December 2021, and the cost of debt was 3.31% with 92.1% of its debt on fixed interest rates.
ESR-REIT kept busy in FY2021 with two acquisitions totalling S$182 million and three divestments that freed up S$64.1 million.
The industrial REIT also completed two AEI worth S$22.2 million, with another worth S$53.3 million slated to be completed in the third quarter of 2023.
ESR-REIT is also currently involved in a potential merger with ARA Logos Logistics Trust (SGX: K2LU) to become a Top Five Singapore industrial REIT.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
