Revenue per available unit fell 7%, causing the surprise of some analysts.
Ascott REIT's revenue per available unit (RevPAU) for its Singapore assets fell 7% YoY in Q1 after a 6% YoY increase in Q4. OCBC Investment Research said the fall "took us by surprise."
Analyst Deborah Ong said, "From what we understand, tighter restrictions on employment pass issuance and generally less corporate travel has affected the demand for long-term stays. Going forward, management still remains cautious on corporate demand locally."
CGS-CIMB revealed that the decline in Singapore shows "organic weakness" which was also seen in Japan, where profits fell 29%, due to the divestment of 18 rental housing properties and 7% drop in RevPAU. These weak points were also seen in the Philippines, Vietnam, and the US where same-store RevPAU fell 4%.
These drops were saved by higher profits from master leases mainly due to inorganic contribution from Ascott Orchard Singapore and other acquisitions made in the quarter.
"Keeping this data point in mind, we focus on CDL Hospitality Trusts’ (CDLHT) and Far East Hospitality Trust’s (FEHT) upcoming results release for additional indications of corporate travel strength," Ong concluded.
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