CDL Hospitality Trust

CDL Hospitality Trust: OCBC maintains Hold with $1.56 TP. House note that based on STB figures, estimate that RevPAR for Singapore hotels fell 8% YoY for July. 3Q13 for the sector as a whole could well show a contraction like in 1H13. This is disappointing as house was anticipating a possible y/y growth in RevPAR figures for July and August, based on industry sources. CDLHT’s hotels in SG are best classified as being in the Mid-tier/Upscale categories. It is worth highlighting that house anticipate a huge growth of 10.9% p.a. in mid-tier room supply, which means that CDLHT’s SG hotels could face significant RevPAR pressure over the medium-term. Previously using an RNAV model, house have transitioned to a DDM model. Incorporating a risk-free rate of 2.7% (versus 2.5% previously) into its model.