Proceeds from the sale of its two Beijing hotels trimmed its debt.
Ascendas Hospitality Trust (A-HTRUST) recorded a net property income (NPI) decrease of 9.3% YoY to $20.2m in Q1 2018 from 22.3m, whilst its gross revenue slipped 9.8% YoY to $48.2m, an announcement revealed.
In Q1, the firm completed the divestment of two hotels in Beijing and the purchase of The Splaisir Seoul Dongdaemun. It has also acquired hotels in Osaka.
“The proceeds from the divestment was substantially used to pare down bank borrowings and fund the acquisition in Seoul,” A-HTRUST CEO Tan Juay Hiang said. “Part of the proceeds will be distributed to stapled security holders in FY2018/19 to mitigate the dip in income as result of the divestment.”
Meanwhile, the firm’s Sydney hotels saw an average occupancy rate of 82.1% which is a slip from 83.3% last year as they experienced weakness in market conditions except Courtyard by Marriott Sydney-North Ryde which saw further improvements due to major refurbishments in 2016.
A-HTRUST's Australian hotel portfolios saw an average daily rate decrease of 2.9% to A$165 from A$170 whilst revenue per available room (revPAR) dropped 3.5% YoY to $136.
“The market condition in Sydney is expected to remain competitive,” the firm said. They expect moderate growth that may be experienced due to increase in hotel rooms inventory.
“In the coming year, the increasingly competitive environment in Brisbane will continue to exert pressure on the performance of the hotel market,” they added.
The firm also believes that the growth in Inbound arrivals to Japan, South Korea, and China which could support hotel markets.
“However, the recent earthquake in Osaka and the adverse weather that affected certain parts of Japan may dampen travel sentiments into the country temporarily,” A-HTRUST commented.
In Singapore, the growth momentum in the number of international visitors also continued.
“As supply of new hotel rooms begin to taper, the performance of the hotel market in Singapore is expected to recover,” the firm said.
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