CDLH Trust

CDLH Trust: reported 3Q13 DPU of 2.64¢ (-3% y/y), which translates to 6.3% annualized yield. Gross revenue dipped 0.8% to $35.9m, mainly due to weaker operating performance from its Spore hotels, dragged by an influx of new hotel rooms and an overall weaker corporate demand environment. For the Spore hotels, avg occupancy rate dipped 0.7ppt y/y to 87.6%, and avg daily rate fell 5.6% to $218, leading to a 6.4% decline in RevPAR to $191. Meanwhile, fixed rent contribution from the Australia hotels also dropped due to the weakened AUD, which negated the $1.9m revenue boost from the recently acquired Angsana Velavaru resort in the Maldives. While Singapore Tourism Board data indicates 8.5% y/y growth in visitor arrivals for Jan – Aug 2013, which has helped in absorbing the supply of >2,600 rooms that have come on stream this year, the uncertain global economic environment, as well as companies and leisure travelers exercising caution in travel expenditure is expected to continue to weigh on the attendant accommodation demand. This may continue to keep the overhang in sentiment on the hospitality sector. CDLH Trust ended 3Q13 with NAV of $1.58, which translates to 1.06x P/B, based on the last closing price of $1.68.