Current location site: Global

·         Distribution per Stapled Security grew 19% to 2.78 cents in 1H 2023

·         Portfolio revenue per available unit (REVPAU) increased 44% in 1H 2023 on robust lodging demand

Singapore, 27 July 2023 – CapitaLand Ascott Trust’s (CLAS) gross profit for 1H 2023 rose 31% to S$154.4 million compared to 1H 2022.  Revenue for 1H 2023 increased by 30% to S$346.9 million compared to 1H 2022.  This was mainly attributed to the strong operating performance of CLAS’ properties as travel continues to pick up pace.

The higher revenue and gross profit were also due to additional contributions from CLAS’ 14 quality operating assets acquired in FY 2022 and 2Q 2023^[1], which were largely longer-stay assets.  On a same-store basis, revenue and gross profit for 1H 2023 increased by 26% and 25% respectively compared to 1H 2022.

CapitaLand Ascott Trust's strong performance is supported by the twin pillars of growth and stable income

Mr Bob Tan, Chairman of the Managers of CLAS

Twinning growth with stability

CLAS’ growth income sources such as hotels and serviced residences under management contracts contributed 42% of the total gross profit in 1H 2023, while stable income sources^[6] contributed the remaining 58%.  CLAS remains focused on maintaining a balanced mix of income streams with a medium-term asset allocation target to have 25-30% of its total portfolio value in longer-stay assets such as rental housing and student accommodation properties, and the remaining 70-75% in hospitality assets.

To further uplift the value and profitability of its assets, five properties will undergo asset enhancement initiatives (AEI) in FY 2023 and are expected to command higher room rates post-refurbishment.  The latest asset slated for AEI is La Clef Tour Eiffel Paris by The Crest Collection in France.  The five properties^[7] will remain open during the refurbishment and the upgrades are expected to be completed by 1H 2024.  Construction of the new Somerset serviced residence at Clarke Quay in Singapore is on track to be completed in 2H 2025.

CLAS’ master leases registered a 9% y-o-y increase in gross profit mainly due to higher variable rent and contributions from new acquisitions.  CLAS’ longer-stay properties, which include student accommodation and rental housing properties, maintained a strong average occupancy rate of over 95%.  CLAS’ operating student accommodation properties in the USA were 98% leased for the academic year (AY) 2022-2023.  Pre-leasing for the next AY is healthy, with an expected rent growth of about 6% y-o-y.

To further strengthen its stable income stream, in addition to the completion of two turnkey rental housing acquisitions in Japan, CLAS’ student accommodation property in the USA, Standard at Columbia, has received its temporary certificate of occupancy on 30 June 2023.  The property has a pre-leased occupancy rate of 87% as at June 2023 and is set to welcome its first batch of students for the AY 2023-2024, starting in August 2023.

CLAS maintains a strong financial position through disciplined capital management

CLAS is in a strong financial position and remains prudent in its capital management.  As at 30 June 2023, 80% of its debt are on fixed rates and the weighted average debt to maturity is 3.6 years, mitigating the impact of rising interest rates.  CLAS’ effective borrowing cost remains low at 2.3% per annum with an interest cover of 4.3 times.  It has a debt headroom of S$1.8 billion and a gearing of 38.6%, which is well below the 50% gearing limit allowable under the property funds appendix issued by the Monetary Authority of Singapore.  CLAS has a total of approximately S$1.11 billion in cash on-hand and available credit facilities.  CLAS’ geographically diversified portfolio with exposure to 12 foreign currencies mitigates the volatility in foreign exchange.

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^{[1] CLAS completed 15 acquisitions in FY 2022 and 2Q 2023. Previously under development, Standard at Columbia received its temporary certificate of occupancy on 30 June 2023, and will begin operations in 3Q 2023
[2] Excluding one-off items relating to realised exchange gain arising from repayment of foreign currency bank loans and settlement of cross currency interest rate swaps
[3] Revenue per available unit of properties under management contracts and management contracts with minimum guaranteed income, excludes master leases, rental housing and student accommodation properties
[4] The combination with Ascendas Hospitality Trust (A-HTRUST) was completed on 31 December 2019 and the 2019 pro forma figures include the performance of the A-HTRUST portfolio
[5] "Tourism set to return to pre-pandemic levels in some regions in 2023" United Nations World Tourism Organization, January 2023
[6] Stable income sources include properties under master leases, management contracts with minimum guaranteed income, as well as rental housing and student accommodation properties
[7] In addition to La Clef Tour Eiffel Paris by The Crest Collection, Citadines Les Halles Paris in France, Citadines Kurfürstendamm Berlin in Germany, Citadines Holborn-Covent Garden London in UK and the Riverside Hotel Robertson Quay in Singapore are undergoing AEI in FY 2023}