CDL Hospitality Trusts (CDLHT) posted results that were within expectation and ended the year flat on a DPU basis. FY16 DPU decreased 0.6% YoY to 10.00 S cents, making up 105% of our full-year forecast.

NPI increased 0.4% to S$137.6m, or 103% of our forecast, on the back of a 4.9% increase in gross revenue to S$180.9m, or 101% of our forecast. The growth was boosted by inorganic contribution from the UK hotel as well as higher NPI growth from the NZ hotel as a result of higher variable rental income.

CDLHT also recorded a net fair value loss of S$21.6m for FY16, as its Singapore and Maldives properties suffered fair value losses that outstripped the fair value gains on its NZ and Australian properties. FY16 RevPAR for its Singapore properties fell 8.6% to S$160 as average daily rates and occupancy dropped 6.0% and 2.3 ppt, respectively.

We are likely to keep our BUY rating but place our fair value of S$1.48 under review pending further details from the analyst briefing.

Source: OCBC Research - 26 Jan 2017