CDL HT

CDL HT: 4Q14 DPU and distributable income rose 7.2% y/y to 3.13¢ and $3.5m respectively, bringing full year DPU to 10.98¢ (+0.1%). Meanwhile, 4Q14 revenue grew 14.4% y/y to $45.1m while NPI increased 6% to $38.6m, from a full quarter’s revenue recognition from Jumeirah Dhevanafushi (acquired Dec ’13) and rental boost from Angsana Velavaru, offset by reduced rents from Singapore Hotels, loss of rent from Claymore Link Mall due to AEI, and reduced contributions from Australia hotels due to the weakened AUD. Singapore hotels achieved occupancy of 90% (+3ppt y/y, -2ppt q/q) in the quarter but RevPAR dipped $2 y/y (-$7 q/q) to $185 from increased competition, exacerbated by muted corporate spending. Meanwhile, management guided that Australia hotels RevPAR remained weak, though it was mildly boosted from the G20 Leaders Summit in Brisbane in November. Meanwhile, management also flagged an 8.8% y/y decline in Maldives resorts RevPAR due to the sharp weakening of the ruble and the strengthening USD. Aggregate leverage increased 1.5ppt q/q to 31.7%, implying debt headroom of $339m assuming a threshold of 40%. All-in interest cost of 2.3%. Two new Japanese hotels are expected to contribute towards performance beginning 1Q15. Otherwise, structural trends would continue to influence the trust’s performance (i.e. competition from new supply in Singapore, muted economy in Australia, unfavorable global outlook weighing demand in Maldives). Claymore Link Mall is expected to resume operations in 2Q15 post-AEI. CDLHT is currently trading at 6.1% FY14 yield, and 1.1x P/B.