Ascendas Hospitality Trust reports fiscal 1Q net property income rose 14 percent on acquisitions

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 Thursday its fiscal first quarter net property income rose 13.6 percent on-year to S$21.3 million, mainly on contributions from five hotels acquired in the previous financial year.

Gross revenue for the quarter ended 30 June increased 3.5 percent on-year to S$46.5 million, the trust said in a filing to SGX.

The net property income and gross revenue year-ago comparisons excluded contributions from the China portfolio, which was divested in May 2018, the trust said.

The distribution per stapled security (DPS) was 1.28 Singapore cents for the quarter, down 5.2 percent from 1.35 Singapore cents in the year-ago period, the trust said. The decline was mainly on the year-ago partial distribution of proceeds from the divestment of the Novotel Beijing Sanyuan and ibis Beijing Sanyuan, the trust said.

“We are pleased that the five hotels acquired in the previous financial year have contributed positively to the portfolio. The net property income contribution from these hotels have made up for both the loss of income from the sale of the two hotels in Beijing as well as lower contribution from Australia portfolio, which was impacted by a weaker Australian dollar against the Singapore dollar,” Tan Juay Hiang, CEO of the REIT’s managers, said in the statement.

Tan added that for the full year, the net property income contribution of the five new hotels was expected to exceed the previous year’s contribution from the divested Beijing hotels.

In its outlook, Ascendas Hospitality Trust said it expected demand for hotel accomodation in Sydney would remain robust in the near term, but supply increases may pressure room rates. Melbourne hotel market conditions were set to remain soft over the medium term amid new supply, it added.

But it said limited upcoming supply and a new runway at the Brisbane Airport, due to open in 2020, could boost Brisbane’s hotel market.

The Tokyo and Osaka hotel markets were expected to benefit from the Rugby World Cup this year, while Tokyo was set to get a boost from the 2020 Olympics and a new attraction slated to open at Universal Studios Japan next year, Ascendas Hospitality Trust said.

South Korea’s hotel market was seeing recovering demand from China as well as moderate upcoming supply in Seoul, the filing said. It added Singapore’s international arrivals have remained healthy so far this year and upcoming supply is relatively modest, but weaker corporate demand was a headwind.

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

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