Hospitality REITs the weakest link in 4Q15 results season

Other S-REITs proved to be safe havens, though.

Hospitality REITs were the only blemish on what would otherwise have been a stellar results season, as majority of the sub-sectors in the Singapore REITs space posted robust growth despite mounting headwinds.

According to a report by OCBC, Ascott Residence Trust, CDL Hospitality Trusts Far East Hospitality Trust and OUE Hospitality Trust have reported DPU which tumbled YoY, ranging from 3.8% to 8.6%.

This slump is largely on back of tightening budgets by corporates, relatively strong SGD against regional currencies, and more intense competitive pressures underpinned by a supply glut of hotel rooms.

On the flip side, other sub-sectors enjoyed largely robust performances. This includes the industrial sector, despite weak manufacturing data points in Singapore. Under this division, results of Mapletree Logistics Trust and Soilbuild Business Space REIT were stable, while Ascendas REIT and Mapletree Industrial Trust posted healthy DPU improvement.

Meanwhile, retail REITS were the stars of the 4QCY15 results season, with YoY DPU growth of 4.4%, driven by overseas-focused REITs. CapitaLand Mall Trust enjoyed the strongest share price climb YTD, followed by Mapletree Commercial Trust.

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