Nomura: Singapore’s hospitality trusts could see a bounce

Singapore two-dollar bills

Singapore’s hospitality trusts could be headed for a bounce, Nomura said, pointing to the city-state’s tourism figures.

Total visitor arrival figures rose 5.4 percent in January from the year-earlier month, with the number of visitor days up 1.2 percent, according to the latest figures released by the Singapore Tourism Board. The agency’s data also showed that January’s total room revenue for January was S$312.0 million, up 3.9 percent on-year, while the revenue per available room (RevPAR) was up 0.2 percent on-year.

“While we do not think the hospitality trusts are cheap on an absolute basis (average 2018F yield 6.2 percent, vs the average 6.4 percent since 2005 and 6.6 percent since 2010), we think the sub-sector could outperform in the near term as we head into the first-quarter of 2018 results season,” Nomura said in a note on Monday.

It pointed to an estimated average first quarter dividend per unit growth of 15.4 percent year-on-year, and to the Singapore Air Show, held in February, which likely boosted first quarter RevPAR.

CDL Hospitality Trust was flat at S$1.72 at 9:35 A.M. SGT on Monday, while Ascendas Hospitality Trust was up 2.55 percent at S$0.805, Far East Hospitality Trust was flat at S$0.68, OUE Hospitality Trust was up 1.88 percent at S$0.815 and Frasers Hospitality Trust was down 0.67 percent at S$0.74.