Although the trading environment in Singapore continued to be soft, CDL Hospitality Trust (CDLHT) managed to post a 3.4% YoY increase for its 3Q16 DPU of 2.44 S cents. 3Q gross revenue jumped 10.5% YoY to S$45.4m, and NPI correspondingly increased 5.3% YoY to S$34.8m. This growth was contributed by the inorganic contribution from UK, an improved performance from New Zealand, and a boost from positive earnings translation for Australia and Japan. Partially offsetting these were lower contributions from Singapore and Maldives.

RevPAR for CDLHT’s Singapore hotels dropped 7.2% YoY to S$168 on the back of a 7.5% drop in the ADR which was partially offset by a 0.5 ppt increase in AOR. CDLHT’s results were in line with expectations: 9M revenue and 9M DPU make up 74% and 72% of our current full-year forecast. We are likely to keep our BUY rating intact, but place our fair value of S$1.53 under review.

Source: OCBC Research - 28 Oct 2016