CDL Hospitality Trusts’ (CDLHT) results were below expectations. 1Q revenue increased 11.6% YoY to S$51.8m while NPI increased 5.4% to S$37.8m. 1Q17 DPU came to 2.14 S cents, which made up 22% of our full-year forecast.

This figure was 7.4% higher than the 1Q17 DPU of 2.02 S cents (restated to reflect rights issue) but 11.6% lower than the reported 1Q17 DPU of 2.42 S cents.

Singapore RevPAR increased 0.8% YoY to S$161 while RevPAR growth in local currency for overseas markets was +4.6% for New Zealand, -18.8% for Maldives, -8.9% for Japan, -6.5% for the UK’s Hilton Cambridge City Centre, +6.8% for the UK’s The Lowry Hotel and -7.6% for Germany.

Recall that Mercure Brisbane and Ibis Brisbane were divested on 11 Jan 2018, while acquisitions of The Lowry Hotel and Pullman Hotel Munich were completed on 4 May 2017 and 14 Jul 2017 respectively.

We maintain HOLD on CDLHT but place our fair value of S$1.60 under review.

Source: OCBC Research - 30 Apr 2018