Date of Report
October 30, 2024
Broker Name
Maybank Research Pte Ltd
Overview
CDL Hospitality Trusts (CDREIT SP) is Singapore’s first listed hospitality group, managing a diverse portfolio of income-producing real estate primarily used for hospitality, lodging, and student accommodation.
Financial Performance
- 3Q NPI (Net Property Income): SGD 36.3 million, a decrease of 6.8% YoY.
- 3Q Revenue: SGD 67.5 million, a decrease of 3.7% YoY.
- 9M Revenue: SGD 194.8 million, an increase of 2.9% YoY.
- 9M NPI: SGD 102.9 million, an increase of 1.0% YoY.
Market Performance
- RevPAR (Revenue Per Available Room):
- Singapore: SGD 214, down 10.3% YoY due to lower room rates.
- UK: Flat RevPAR, influenced by better corporate demand.
- Germany: Increased by 12.4% due to events.
- Australia and Japan: Showed strong RevPAR and NPI growth.
Growth Drivers
- The recovery in visitor arrivals to pre-pandemic levels.
- Lower borrowing expenses anticipated from projected interest rate cuts.
- Contributions from a build-to-rent project.
Valuation Metrics
- Current Share Price: SGD 0.93
- 12-Month Price Target: SGD 1.10 (+25% upside)
- Gearing Ratio: 38.8%
- Debt Cost: Increased by 20bps to 4.4%.
Shareholder Insights
- Major shareholders include City Developments Ltd.
- A diversified portfolio of 19 properties valued at SGD 2.9 billion, including 4,821 rooms and a mall.
Recent Developments
- The company is focused on smaller acquisitions in high-yielding tertiary markets.
- The financial metrics indicate that while growth in demand has slowed, there are still upside opportunities in the market.
Risk Factors
- Potential increases in hotel room supply without matching demand growth.
- Global macroeconomic downturns affecting RevPAR.
- Volatility in foreign exchange rates impacting earnings.
Analyst Recommendations
- Maintain a “BUY” rating.
- Adjusted FY24 and FY25E DPU (Distribution Per Unit) by approximately 3%, with a lower target price of SGD 1.10, reflecting a total return expectation of 25%.
