Higher payouts from S’pore’s hotel Reits as demand recovers

SINGAPORE – Shareholders of Singapore’s three listed hospitality real estate investment trusts (Reits) will enjoy higher dividend payouts on the back of a recovery in travel this earnings season.

Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust have posted impressive first-half results, thanks to a surge in travel demand.

Ascott, which is a unit of the CapitaLand group, last week unveiled a 14 per cent rise in distribution per stapled security (known more commonly as dividend per share, or DPS) to 2.33 cents for the first-half ending June 30, up 14 per cent from the year before.

Meanwhile, CDL’s first-half DPS jumped 67.2 per cent as strong leisure demand saw occupancy rates at its numerous hotels rise.

The company declared a first-half dividend of 2.04 cents, compared with 1.22 cents a year ago as leisure demand accelerated particularly strongly after the April border reopening.

As its hotels in Singapore, Britain and Maldives filled up, net property income collectively grew by 37.8 per cent for the half year to end-June.

It is a similar story for Far East Hospitality Trust, whose first-half DPS surged 40 per cent to 1.54 cents per unit, compared with 1.1 cents during the first half of 2021.

Divestment gains from the sale of its properties at Village Residence Clarke Quay also boosted the dividend payout cache to $30.6 million.

Although gross first-half revenue slid 1.4 per cent to $41.6 million, from $41 million a year earlier due to the divestment, net property income for the group grew 3.5 per cent to $37.5 million.

What is particularly encouraging is the strong growth in occupancy and top-line revenue for the three Singapore-listed hospitality Reits.

Ascott’s properties in France and Britain have outperformed pre-pandemic levels, while revenue outlook in other markets like Japan and China look strong.

During a recent interview with The Straits Times, Ascott chief executive Kevin Goh highlighted that the group also has a growing stable of rental housing and student accommodation.

He said the group plans to increase its asset allocation into longer stay and more revenue resilient student accommodation and rental apartments from 15 per cent to 20 per cent now to 25 per cent to 30 per cent of portfolio value over the coming decade.