CDL H Trust

CDL H Trust: OCBC maintain HOLD rating, lowers TP to $1.79. Due to its weak Singapore performance for Jan to Apr this year, RevPAR for Singapore hotels fell 2.6% YoY to $218. Furthermore, while visitor arrivals grew 6.4% in 1Q13, gross lettings for 1Q13 increased by only ~2.8% to 2.8m room nights. On a per capita basis, visitor arrivals are converting into fewer room nights. This trend was present in the 2012 figures (gross lettings were flat y/y while visitor arrivals climbed 9.1%). RevPAR for upscale and mid-tier Singapore hotels for Apr fell 12.8% y/y and 4.7% to $229 and $160 respectively. Note that CDLHT’s Singapore hotels fall in the midtier/upscale categories. Industry sources indicate that Singapore hotel bookings have generally been weak through 2Q13 so far. Concerned with an oversupply situation building up in the hospitality market and generally weak performance of the industry YTD, OCBC are lowering its FY13 RevPAR growth assumption for CDLHT's Singapore hotels from 0% to -5%.