CapitaLand Ascott Trust - DBS Research 2025-01-28: Switching To Harvest Mode

• CapitaLand Ascott Trust reported a strong set of results for 2H24, with revenue of S$423mil (+6% y-o-y) and gross profit of S$198mil (+8% y-o-y) with strong operational performance from key markets, portfolio acquisitions, and AEIs.
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• Gearing remains healthy, at 38.3% by the year end, which suggests a balanced approach to leveraging debt for growth. The average cost of debt stands at a low 3% per annum, with 77% of debt on fixed rates, mitigating interest rate risk, and healthy interest coverage ratio (ICR) of 3.1.

RevPAR recovered 9% y-o-y, led by overseas markets.

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• Group RevPAU ended the year at ~113% of pre-pandemic levels. The impressive performance was driven by higher average room rates and occupancy.
• Occupancy increased to 81% in 4Q24 (vs. 77% in 4Q23), closing the gap against pre-pandemic levels at high 80%.
• Growth was observed across all key markets, with Japan leading the race, up 37% y-o-y. Australia, Singapore, and the UK also reported double-digit growth, with Singapore boosted by AEI uplift from The Robertson House hotel.

Portfolio stable, though cap rate expanded for US hotels.

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Geraldine WONG DBS Group Research | Derek TAN DBS Group Research | https://www.dbs.com/insightsdirect/ 2025-01-28 SGinvestors.io

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