CDL Hospitality Trust

CDL Hospitality Trust: CDL Hospitality Trust (CDLHT) 3Q14 results came in slightly above expectations, although distributable income dropped 0.5% y/y to $25.6m, while DPU fell 1.1% to 2.61¢, mainly due to higher depreciation cost from Jumeirah Dhevanafushi (JD) in Maldives, acquired in Dec '13. Gross revenue improved 11.9% to $40.1m, as NPI inched up 2.4% to $33.8m, driven by the full recognition of hotel revenue from JD, partially offset by lower rental income from Claymore Link as a large part of the mall was closed from asset enhancement works. In the quarter, Singapore hotels generated 73% of CDLHT's overall NPI. This segment saw a 4.4 ppt improvement to occupancy rates to 92% from higher business volumes, although average daily room rates declined 4.1% to $209 due to increased competition from supply of new hotel rooms and weaker visitor arrivals. Subsequently, RevPar increased marginally to $192 (+0.5%). Aggregate leverage for CDLHT increased 0.7 ppts q/q to 30.2%, while weighted average debt to maturity was extended slightly to 2.4 years. At $1.69, CDLHT is valued at 1.06x P/B and has an annualized 9M14 yield of 6.2%, slightly less attractive compared to hospitality REIT peers' average of 0.95x P/B and 6.7% yield. Latest broker ratings: OCBC's Hold rating and TP of $1.80 is under review