CDL Hospitality Trust's NPI down 10.7% to $32.77m in Q1

Contributions from Singapore, New Zealand, Australia and UK hotels fell 6.7%.

CDL Hospitality Trust’s (CDLHT) began the year on a dismal note after its net property income (NPI) dipped 10.7% YoY to $33.77m in Q1 from $37.82m in 2018, an announcement revealed. Revenue also dropped 10.6% YoY from $51.8m to $46.32m.

The decrease was mainly attributed to reduced contribution from its Singapore, New Zealand, Australia and UK hotels exacerbated by the full closure of Dhevanafushi Maldives Luxury Resort since June 2018 for rebranding works. Collectively, contributions from these properties declined $6.7m YoY.

That said, the decline was partially mitigated by a $500,000 inorganic contribution from the Italy Hotel, which was acquired in November 2018, as well as higher contribution from Pullman Hotel Munich and the Japan Hotels.

Income available for distribution edged down 3% YoY to $25.28m from $26.06m, whilst distribution per stapled security (DPS) slipped 3.7% YoY from $0.0217 to $0.0209.

“The Singapore hospitality market in Q1 2019 was affected by the absence of the biennial Singapore Airshow and a series of meetings and events hosted during Singapore’s Chairmanship of ASEAN in 2018,” the firm noted, adding that revenue per available room (RevPAR) for the Singapore Hotels during the quarter decreased 2.4% YoY to $157 mainly due to the competitive environment amidst the uncertain global economic environment.

According to Vincent Yeo, CEO of CDLHT’s managers, CDLHT is going through a transition period due to major asset enhancement initiatives taking place.

Orchard Hotel had 8.6% of its room inventory closed during the quarter for renovation of guest rooms in the Orchard Wing and its F&B revenue was also affected by the full closure of the Grand Ballroom and all meeting facilities for upgrading works. There was also some room inventory taken out due to pipe works at M Hotel and Copthorne King’s Hotel during the quarter.

Excluding the out of order room inventory, RevPAR for the Singapore hotels in 1Q 2019 increased 0.4% YoY.

In Q1, Angsana Velavaru secured a RevPAR gain of 17.6% YoY, supported by an 11.7% growth in tourist arrivals into Maldives for YTD February 2019. Trading conditions in Q1 2019 were better in the absence of the state of emergency declared on Maldives, which in the same period last year, affected key source markets such as China and India.

“Whilst this resort saw some RevPAR increase, the gross revenue (in local currency terms) remains unchanged due to the fixed rental income received during the quarter. Dhevanafushi Maldives Luxury Resort remains closed for the ongoing refurbishment works prior to its relaunch as Raffles Maldives Meradhoo,” the firm noted.

Meanwhile, revenue from CDLHT’s Australia portfolio decreased mainly due to the weakening of AUD against SGD. In New Zealand, new competitor supply led to a softer hospitality market overall. Consequently, Grand Millennium Auckland experienced a RevPAR decrease of 4.8% YoY.

“However, at Hilton Cambridge, lesser conference and events demand coupled with intense price competition from new market entrants affected its trading performance,” the firm explained, adding that collectively, RevPAR of the UK Hotels in Q1 2019 declined 4.2% YoY.