CDL Hospitality Trusts to expand mandate to include alternative accommodation assets

CDL Hospitality Trusts will expand its principal investment strategy to include alternative-accommodation real estate, such as rental housing, co-living, student accommodation and senior housing, to seek increased diversification and income stability, the trust said in a filing to SGX Monday.

“The Covid-19 pandemic which has resulted in restricted international travel, has had severe repercussions on the transient short-stay hotel sector globally. The pandemic also illustrated that traditional geographical diversification of a portfolio of hospitality assets has its limitations,” CDL Hospitality Trusts said.

“While rental housing, student accommodation and senior housing are also part of the accommodation/lodging real estate spectrum, they rely on different demand drivers to hospitality, which will be beneficial to CDLHT in the long run as the portfolio will be less susceptible to any adverse systemic changes caused by unforeseeable external events and developments to the hospitality sector,” CDLHT added.

The different sectors have varying cycles of rental and occupancy growth rates, meaning they will likely react differently to the same risk event, improving portfolio resilience, the trusts said.

The trusts are a stapled group including CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.

CDL Hospitality Real Estate Investment Trust will change its strategy to:

“CDL Hospitality Real Estate Investment Trust has the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate which is or will be primarily used for hospitality, hospitality-related and other accommodation and/or lodging purposes (including, without limitation, hotels, serviced apartments, resorts, motels, other lodging facilities and properties used for
rental housing, co-living, student accommodation and senior housing), whether wholly or partially, and real estate-related assets in relation to the foregoing.”

CDL Hospitality Business Trust will change its strategy to:

“CDL Hospitality Business Trust has the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of real estate or development projects which is or will be primarily used for hospitality, hospitality-related and other accommodation and/or lodging purposes (including, without limitation, hotels, serviced apartments, resorts, motels, other lodging facilities and properties used for rental housing, co-living, student accommodation and senior housing), whether wholly or partially, and real estate-related assets in relation to the foregoing, and shall also include the operation and management of the real estate assets held by CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.”