Hospitality REITs 1H22 - CGS-CIMB Research 2022-07-30: Boosted By Strong Demand

• Ascott Residence Trust (SGX:HMN) and CDL Hospitality Trusts (SGX:J85) 1H22 DPU came in above our FY22F while Far East Hospitality Trust (SGX:Q5T) missed.
• - Read this at SGinvestors.io -
• Our picks for the sector, in order of preference, are
  1. Far East Hospitality Trust,
  2. Ascott Residence Trust and
  3. CDL Hospitality Trusts.

Ascott Residence Trust's 1H22 results highlights

• - Read this at SGinvestors.io -
• 2Q RevPAR jumped 85% q-o-q due to a 40% q-o-q increase in average daily rate and occupancy improving from ~50% to ~70%. 2Q/Jun 22 RevPAU came in at ~82%/84% of 2Q19 levels. All markets except China registered higher q-o-q RevPAU, driven by stronger corporate and international demand. Main laggards in the portfolio are Japan, China and Vietnam, where 2Q22 RevPAU stands at 32%, 57% and 63% of 2Q19 levels.
• Ascott Residence Trust’s extended stay portfolio purpose-built student accommodation (PBSA) and rental housing assets remained resilient with average occupancy above 95%, accounting for 20% of 1H22 gross profit.
• In referencing Ascott Residence Trust’s forward bookings received to date, management believes that 2H22 performance would be on par or better than 2Q22’s operational performance, with US and Europe travel demand continuing to underpin a recovery.
• In terms of capital management, Ascott Residence Trust’s gearing of 37.5% translates into debt headroom of ~S$1bn, leaving room for it to pursue its mid-term 25-30% longer-stay accommodation asset allocation. 79% of its borrowings have been hedged into fixed rates. An additional 25bp change in interest rates would have a 1% DPU impact for Ascott Residence Trust.

CDL Hospitality Trusts' 1H22 results highlights

• Read more at SGinvestors.io.

LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2022-07-30 SGinvestors.io

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