Singapore Hospitality REITs - UOB Kay Hian 2024-10-04: Greater Influx Of Chinese Tourists, Lower Supply Of Hotel Rooms

• The sector trades at an attractive 2025 distribution yield of 6.1% and low P/NAV of 0.74x. Maintain OVERWEIGHT.
• BUY CapitaLand Ascott Trust for expansion in longer-stay properties. BUY CDL Hospitality Trusts as it benefits the most from lower interest rates.

Pick-up in arrivals driven by Chinese tourists.

• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -

Singapore is the top destination for Chinese tourists.

• Chinese tourists like Singapore for its cleanliness, greenery and cultural affinity to Mandarin-speaking Singaporeans. Safety is a key consideration as some neighbouring countries were affected by incidents involving kidnapping of Chinese tourists. Popular attractions include Chinatown, Gardens By The Bay, Orchard Road, Singapore Zoo and Universal Studio Singapore. Some Chinese tourists visit National University of Singapore and Nanyang Technological University to showcase campus life in Singapore and inspire their children to work hard for admission to top universities.
• Singapore is well connected to China with weekly flights restored to pre-pandemic levels since Jan 24. The mutual 30-day visa exemption arrangement, which commenced in Feb 24, also makes travelling to Singapore more convenient.

Muted new supply during 2024-26.

• Read more at SGinvestors.io.

Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-10-04 SGinvestors.io

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