REIT Watch – Hospitality trusts report higher DPU for H1 2023

Published on 31/07/2023

5 S-Reits with year-on-year improvements in H1 2023 DPU

Company Stock Code Property Sub-segment Year-to-date total return (%) Dividend Yield (%)
Far East Hospitality Trust Q5T Hospitality 6.8% 5.2%
CDL Hospitality Trusts J85 Hospitality -2.2% 4.6%
CapitaLand Ascott Trust HMN Hospitality 7.9% 5.3%
ParkwayLife REIT C2PU Healthcare 5.3% 3.7%
KEPPEL DC REIT AJBU Specialised 33.2% 4.8%

Source: SGX, Bloomberg (data as of 27 July 2023). Note that dividend yields are extracted from July 2023 SREITs & Property Trusts Chartbook.

THIRTEEN S-Reits announced half-year or full-year financial results last week. Among them, 10 S-Reits reported higher year-on-year (yoy) net property income (NPI) for the half-year period ended Jun 30, 2023. However, only five trusts saw yoy improvements in distribution per unit (DPU) for the same half-year period.

All three hospitality trusts which reported during the week declared higher half-year distribution per stapled security (DPS) compared to the same period the year before.

The three hospitality trusts – Far East Hospitality Trust, CDL Hospitality Trusts and CapitaLand Ascott Trust – on average, saw DPS increase 22 per cent yoy. The other two Reits which declared higher yoy DPUs were ParkwayLife Reit and Keppel DC Reit.

Far East Hospitality Trust saw H1 2023 gross revenue increase 26.9 per cent yoy to S$52 million and correspondingly, NPI grew 30.7 per cent to S$49 million. As a result, income available for distribution rose 29.2 per cent yoy to S$37.4 million and DPS increased 24.7 per cent to 1.92 cents.

The revenue per available room (RevPAR) of its hotel portfolio grew 96.9 per cent yoy.

Guests from Europe, South-east Asia and North Asia formed the top three markets, contributing 67.4 per cent of overall revenue.

CDL Hospitality Trusts’ H1 2023 NPI increased by 23.3 per cent yoy, largely attributed to Singapore, Japan, Australia, Europe and UK markets. As a result, total distribution grew 23.8 per cent yoy and DPS increased 23 per cent to 2.51 cents. The RevPAR of its Japan portfolio saw the highest yoy increase of 143 per cent.

CapitaLand Ascott Trust’s gross profit for H1 2023 rose 31 per cent to S$154.4 million, mainly attributed to the resumption of travel and additional contributions from new properties.

Total distribution for H1 2023 also grew 26 per cent yoy to S$96.3 million and as a result, DPS increased 19 per cent yoy to 2.78 cents. Portfolio revenue per available unit (RevPAU) increased 44 per cent yoy for H1 2023, moving closer to its pre-pandemic levels.

ParkwayLife Reit announced DPU of 7.29 Singapore cents for H1 2023, representing an increase of 3.3 per cent yoy. This was on the back of a 23.6 per cent yoy increase in gross revenue, mainly due to contribution from the five Japan nursing homes acquired in September 2022, and higher rent from the Singapore properties. However, this was partially offset by the depreciation of the Japanese yen.

Keppel DC Reit recorded an increase of 3.3 per cent yoy in H1 2023 NPI and correspondingly a slight improvement of 0.2 per cent yoy in distributable income.

Keppel DC Reit noted that the stable distributable income was mainly due to new acquisitions of data centres in Guangdong, renewals and income escalations as well as tax savings. DPU for the period grew marginally by 0.002 cents to 5.051 cents.

Another nine S-Reits and property trusts are expected to report this week. Among them, six would be reporting half-year results while three would be providing quarterly updates.

REIT Watch is a weekly column on The Business Times, read the original version.