New hotel acquisitions to boost hospitality REITs' earnings in 2016, says Fitch

Ascott Residence Trust will be ahead of its peers.

The earnings of hospitality REITs are expected to stabilise this year after declining in the past few years, on back of stronger tourist arrivals and income contributions from newly-acquired assets.

According to Fitch, new assets will contribute to the sector's earnings stability this year. In particular, Ascott Residence Trust is expected to outperform the sector this year because of substantial acquisitions and refurbishments of over $380 million it made last year.

Meanwhile, OUE Hospitality Trust and CDL Hospitality Trusts also spent an aggregate of $425 million on new assets in 2015.

Outside of Singapore, Fitch reckons that assets in Sydney and melbourne should continue to fare well due to limited supply. This will benefit Ascendas Hospitality Trust.

Assets in China will also provide more revenue upside, Fitch noted.