Ascendas Hospitality Trust

Ascendas Hospitality Trust (AH Trust): Nomura visited mgt recently. Says the images of the proposed AEI works looked very good, and reaffirms that it is on track for completion by end Aug ’13. Notes the close partnership with Accor appears to be going as planned. Separately, mgt highlighted that the AU portfolio has been displaying positive improvements, particularly Sebel & Citigate Melbourne and Sebel Cairns. For Sydney, where market occupancy remains above 85%, data showed a 1.7% y-y recovery in visitor arrivals in Jun ‘12, up from the -3.5% dip in ‘11. With the supply outlook still appearing favourable, says AH Trust’s short-term fundamentals appear intact. The acquisition of Ibis Beijing Sanyuan is on track to complete by Feb ‘13 and an earlier completion date would be an added sweetener. Nomura notes AH Trust is currently trading at FY14e DPU yield of 7.8%, which appears favorable vs pers. Believes if mgt continues to execute well, valuations have room for further expansion. Keeps Buy with TP $1.03.