CDL Hospitality Trusts : J85 0% (CDLHT) posted a 23.4 per cent increase in its net property income (NPI) for the third quarter ended Sep 30 to S$39 million, up from S$31.6 million the year before.

Gross revenue grew 19.8 per cent to S$70.1 million from S$58.5 million, with more than half the increase contributed by its Singapore hotels, said the managers on Friday (Oct 27).

The broad improvement in the stapled group’s operational results reflects a continued recovery of international travel. There were increases in its revenue per available room (RevPAR) across its portfolio markets, except for Australia and Germany.

RevPAR for its Singapore hotels rose 19.9 per cent on year, supported by an average room rate growth of 21.4 per cent – despite a 1.2 percentage-point dip in occupancy.

“Four hotels in CDLHT’s Singapore portfolio – Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King’s Hotel and W Hotel – achieved their highest Q3 RevPAR,” the managers noted.

NPI of the group’s main market in Singapore went up 11.6 per cent to S$25.2 million.

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Among other markets in its portfolio, CDLHT recorded significant growth in Japan from the rapid increase of international visitors. RevPAR measured in the local currency rose 102 per cent, and NPI grew 234.1 per cent in tandem.

In Australia, however, RevPAR fell 7.1 per cent and NPI plummeted 51.7 per cent. This was the result of weaker demand during the low season.  

For the three quarters ended September, the stapled group, which comprises CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust, posted 20.4 per cent growth in gross revenue to S$189.3 million.

The growth was partially offset by lower contributions from Grand Millennium Auckland in New Zealand, after its exit from the government isolation programme and return to public trading from Q2 last year.

The NPI of S$101.9 million was 23.3 per cent higher on year, driven by the Singapore, Germany, Italy and Japan portfolios, which grew collectively by S$21.5 million year on year.

As at end-September, CDLHT’s gearing stood at 38.4 per cent, with S$694 million debt headroom to 50 per cent.

The managers highlighted its “healthy liquidity position”, with cash reserves of about S$64.9 million.

CDLHT’s weighted average debt to maturity was around 2.2 years, with S$383 million due in 2024, and S$390 million in 2025.

Slightly more than half of all the borrowings were under fixed interest rates. Of the debt in Singapore dollars, 73.8 per cent was under floating rates.

The managers also noted that for every 1 per cent increase in the all-in interest cost on total borrowings, the distribution per stapled security would drop S$0.0087.

In light of the recovery in tourism, the managers expect CDLHT’s overseas portfolio to continue to register gains at varying paces.

“New Zealand’s and Western Australia’s tourism recovery continues to be supported by improving flight connectivity and tourism campaigns.

“Inbound tourism into Japan is likely to remain strong, driven by pent-up demand, a weak currency and the country’s overall attractiveness as a tourist destination.”

The managers said they will explore investment opportunities via asset enhancements, noting that Grand Copthorne Waterfront Hotel in Singapore has completed its full renovation, and that Grand Millennium Auckland’s renovation is ongoing.

Construction of the residential build-to-rent building in Manchester, UK, remains on track to be completed in mid-2024, added the managers.

“Residential rental growth there remains robust, and the property is well-positioned to benefit from favourable demand and supply dynamics.”

CDLHT’s stapled securities closed Thursday down 2.1 per cent, or S$0.02 at S$0.935.