Ascott Residence Trust’s 2Q18 results were within expectations. 2Q18 revenue increased 6% YoY to S$130.5m, while DPU was flat at 1.84 S cents or 27% of our initial full-year forecast.

1H18 DPU came up to 49% of our full-year forecasts which we consider within expectations. The group’s 2Q RevPAU was up 6% YoY at S$155, boosted by results from Belgium, China and the United Kingdom.

Of relevance to other hospitality S-REITs, RevPAU for ART’s Singapore assets under management contracts was flat YoY. Gearing stands at 35.7% as at 30 Jun 2018 and ~84% of ART’s total borrowings is on fixed interest rates.

We maintain HOLD but place our fair value of S$1.14 under review.

Source: OCBC Research - 24 Jul 2018