A-HTRUST posts full year DPS of 6.03 cents, up by 2.9% y-o-y NAV per stapled security increases to S$1.02
A-HTRUST posts full year DPS of 6.03 cents, up by 2.9% y-o-y NAV per stapled security increases by 10.9% y-o-y to S$1.02
DPS for 4Q FY2018/19 improved by 2.9% y-o-y mainly due to lower financing costs as well as partial distribution of the proceeds from the divestment of Beijing hotels, while full year DPS of 6.03 cents was also 2.9% higher than the previous year
All five newly acquired hotels contributed on a full-quarter basis, boosting contributions from Japan and Korea portfolios
Acquisitions drove portfolio valuation which increased to S$1.8 billion as at 31 March 2019, resulting in a higher NAV per stapled security of S$1.02, up 10.9% y-o-y
Overview of financial results
4Q FY2018/ 19
4Q FY2017/ 18
Net Property Income2
Income available for distribution
income available for distribution (less income retained for working capital)3
1. Save for DPS, percentage changes are based on figures rounded to nearest thousands.
2. Gross revenue and net property income for the corresponding period last year excluded contribution from the China portfolio, which was divested on 18 May 2018. Including contribution from the China portfolio, gross revenue and NPI for 4Q FY2017/18 were S$54.7 million and S$23.7 million, respectively, gross revenue and NPI for FY2018/19 were S$193.8 million and S$86.7 million, respectively, and gross revenue and NPI for FY2017/18 were S$224.7 million and S$95.7 million, respectively.
3. Retention of distributable income for 4Q FY2018/19 and FY2018/19 was 6.8% and 7.0% respectively, while retention of distributable income for 4Q FY2017/18 and FY2017/18 was 7.8% and 7.1% respectively
9 May 2019, Singapore – Ascendas Hospitality Trust (“A-HTRUST”) posted distribution per stapled security (“DPS”) of 1.77 cents for the fourth quarter ended 31 March 2019 (“4Q FY2018/19”), an increase of 2.9% year-on-year (“y-o-y”). This was mainly attributed to full quarter contribution from the five hotels acquired during the financial year, lower net finance costs and partial distribution of the proceeds from the divestment of the two hotels in Beijing (“Divestment”). The increase was partially offset by the absence of look fee received in 4Q FY2017/18 in connection to the Divestment, loss of Page 2 of 5 income from the Divestment as well as the lower contribution from the Singapore hotel and Australia portfolio and further weakening of the Australian Dollar (“AUD”) against the Singapore Dollar (“SGD”). For the full year FY2018/19, DPS amounted to 6.03 cents, which was 2.9% higher than the previous year.
Mr Tan Juay Hiang, Chief Executive Officer of the Managers, said: “We are pleased to be able to deliver higher distribution to the stapled securityholders for FY2018/19. Despite challenges faced in some of the markets, it has been a fulfilling year as we were able to drive growth and develop the trust through acquisitions in Korea and Japan. In the process, A-HTRUST broke into the Seoul hotel market, which is a city that we believe has strong hospitality fundamentals. As a result of these acquisitions, portfolio valuation grew by 11.5% y-o-y to S$1.8 billion as at 31 March 2019. The portfolio has grown steadily from approximately S$1.0 billion when A-HTRUST was listed in 2012. A-HTRUST also posted a higher net asset value per stapled security of S$1.02 compared to S$0.92 a year ago. Following the divestment and acquisitions A-HTRUST had undertaken in FY2018/19, 13 of the 14 hotels in the portfolio are freehold properties as at 31 March 2019.
We believe that the hotels acquired in FY2018/19, which were all on master lease arrangement, and the diversity of the portfolio have continued to build up the resilience of the portfolio as a whole through added income stability and will benefit the trust as we move into the new financial year.”
Portfolio of hotels under management agreements
4Q FY2018/ 19
4Q FY2017/ 18
Avg Occupancy Rate (%)
Avg Daily Rate("ADR")(AUD)
Revenue per Available Room ("RevPAR") (AUD)
While average occupancy rate for the hotels in Sydney was maintained at a healthy rate of close to 90%, the hotels’ performance was affected by lower average room rates. Each of the hotels in Melbourne and Brisbane posted y-o-y improvement. The hotel in Melbourne saw higher demand for residential conference while the Brisbane hotel benefitted from higher occupancy.
Portfolio of hotels under master leases
Driven by a full quarter contribution from all three WBF-branded hotels acquired in 2018, the net property income from the Japan portfolio grew by approximately 20% y-o-y for 4QFY2018/19. Income from Korea portfolio was also boosted by the contribution from ibis Ambassador Seoul Insadong which was acquired in December 2018.
Park Hotel Clarke Quay in Singapore experienced weaker demand from transient and corporate segments in 4Q FY2018/19. In addition, there was also the absence of Singapore Airshow, a biennial event, that was held in February 2018.
Gearing remained at a prudent level of 33.2% as at 31 March 2019. Weighted average debt maturity was 3.8 years with no significant refinancing requirement until 2020. Average interest rate for 4Q FY2018/19 was approximately 2.0%, with 82.3% of the borrowings on fixed rates.
A relatively lower AUD will help to drive inbound arrivals into Australia as well as domestic travelling. While demand is expected to remain healthy in the Sydney hotel market, any improvement in performance may be hampered by upcoming supply. Over the medium term, substantial upcoming supply in Melbourne will place pressure on the performance of the hotel market in general, while improvement in Brisbane hotel market is conditional upon sustained recovery in demand as supply tapers.
Growth in inbound arrivals into Tokyo and Osaka are expected to support the performance of the hotel markets in these cities in the near term, although upcoming supply in Osaka may place pressure on room rates. The cities will also benefit from major events to be held in or near the cities in 2019, including the G20 Summit to be held in Osaka in June as well as the Rugby World Cup 2019 which will be held in 12 venues across Japan starting in September.
The growth trend in inbound arrivals into South Korea continued in 2019, with an increase of 14.1% for the first three months of the year1 . The increase was driven by strong growth from its key source markets such as China, Japan and Taiwan. In the near term, expected continual growth in inbound arrivals and moderated supply of new hotel rooms are expected to drive the hotel market in Seoul.
Having welcomed a record number of 18.5 million visitors in 2018, the visitorship to Singapore is forecasted to grow between 1% and 4% in 20192 . Increased connectivity to Singapore, via addition of new airlines and connection to new destinations, is expected to continue driving demand in the near term. The proposed expansion of the two integrated resorts will help to further enhance Singapore’s attractiveness as a destination over the longer term.