Ascendas Hospitality Trust reports fiscal 2Q net property income rose nearly 4 percent

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 Tuesday its fiscal second quarter net property income rose 3.5 percent on-year to S$21.2 million on contributions from the three WBF-branded hotels in Japan and ibis Ambassador Seoul Insadong acquired between September 2018 and December 2018.

The increase was partly offset by the Australian portfolio’s weaker performance, exacerbated by a weaker Australian dollar and South Korean won against the Singapore dollar, the trust said.

Gross revenue for the quarter ended 30 September increased 2.4 percent on-year to S$47.5 million, the trust said in a filing to SGX.

The net property income and gross revenue figures for the previous year excluded contributions from the China portfolio divested in May 2018, the filing said.

The distribution per unit (DPU) for the quarter was 1.38 Singapore cents, down 5.5 percent from 1.46 Singapore cents in the year-ago quarter, the filing said.

Excluding the partial distribution of divestment proceeds from Novotel Beijing Sanyuan and ibis Beijing Sanyuan, the year-earlier second quarter DPU would have been 1.32 Singapore cents, the filing said.

For the fiscal first half, Ascendas Hospitality Trust reported net property income of S$42.4 million, up 8.3 percent on-year, on gross revenue of S$94 million, up 2.9 percent on-year. The DPU for the fiscal first half was 2.66 Singapore cents, down 5.3 percent from 2.81 Singapore cents in the year-ago period, the filing said.

In its outlook, the trust said it expected hotel accommodation demand in Australia to grow, but that hotel market conditions in Sydney and Melbourne would remain competitive near-term on higher supply. It added the Brisbane market was expected to continue to recovery, with assistance from upcoming attractions in the city, including the development of an integrated resort.

For Tokyo, the trust said the hotel market would benefit from major international events, including the 2020 Tokyo Olympics, but that Osaka’s market was expected to be weaker as South Korean tourism declines amid tensions between the two countries.

South Korea’s international arrivals have remained robust this year, while upcoming supply of hotel rooms is “relatively moderate,” indicating hotel market performance is expected to improve, Ascendas Hospitality Trust said.

In Singapore, international arrivals are growing, which should support the hotel market as supply is expected to increase moderately, the filing said.

As a result of the proposed merger between the trust and Ascott Residence Trust, Ascendas Hospitality Trust’s units are expected to trade until 16 December, with the delisting expected to occur on 3 January 2020, the filing said.

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