Ascendas Hospitality Trust reports flat fiscal 3Q net property income

Ascendas Hospitality Trust's 241-room Pullman Sydney Hyde Park hotel located in Sydney's central business district. Credit: Ascendas Hospitality Trust.Ascendas Hospitality Trust's Pullman Sydney Hyde Park hotel in Sydney's central business district. Credit: Ascendas Hospitality Trust.

Ascendas Hospitality Trust reported on Tuesday that its net property income for the fiscal third quarter was flat on-year at S$23.2 million, when excluding year-earlier contributions from divested China properties.

Contributions from the newly acquired hotels made up for the loss of income from the sale of the hotels in China, but the income from the Australia properties was hurt by the Australian dollar’s fall against the Singapore dollar, it said.

In addition, while the average occupancy rate for the Sydney hotels was strong at nearly 90 percent, new supply of hotels rooms meant room rates were softer, it said. Brisbane and Melbourne also saw increased room supply and a soft conference and events business, the trust said.

Ascendas Hospitality Trust acquired the Splasir Seoul Dongdaemun in May and agreed to acquire a second hotel in Seoul in November and in June, it said it would acquire three hotels in Japan.

Gross revenue for the quarter ended 31 December fell 5.1 percent on-year to S$50.1 million, it said in a filing to SGX after the market close on Tuesday.

Including the China portfolio which was divested in May 2018, the year-ago net property income for the quarter was S$25.2 million on gross revenue of S$58.1 million, it said.

The distribution per stapled security (DPS) was 1.45 Singapore cents for the quarter, up 2.8 percent from 1.41 Singapore cents in the year-ago quarter, the filing said. The increase was mainly on the absence of year-ago due diligence costs for an acquisition which was proposed, but didn’t materialize, and on lower net financing costs, it said.

The trust pointed to a mixed outlook for its Australia properties as domestic travel and inbound arrivals were expected to remain healthy, while the Australian dollar was relatively weak.

It also noted that inbound arrivals in Singapore increased 6.6 percent on-year for the first eleven months of 2018.

“With limited new supply projected in the next few years, the performance of the hotel market is expected to continue its recovery trend in the short term,” the trust said.

Singapore’s hotel sector has faced a prolonged downturn amid a glut of new rooms.

Ascendas Hospitality Trust’s portfolio has 14 hotels with around 4,700 rooms across Australia, Japan, South Korea and Singapore.

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