Ascendas Hospitality Trust

Ascendas Hospitality Trust (AHT): 2QFY14 distributable income of $14.6m and DPU of 1.41¢, were 2.1% and 23.8% respectively, below IPO forecast. Gross revenue of $53.1m was 10.1% lower than forecast, while NPI of $21.3 beat by 2.9%. This was mainly due to unfavourable FX movements in AUD (-9.4% y/y) and JPY (-21.3% y/y), mitigating new contributions from Ibis Beijing Sanyuan (China) and Park Hotel Clarke Quay (Singapore). AHT had gearing of 35.8% with debt to maturity of 2.2 years and effective borrowing rate of 2.9%. The Australian economy is expected to remain soft, which may result in a subdued performance of its hotels in the near term. Meanwhile, Japan has shown positive signs of a turnaround on the back of Abenomics, further boosted by yen depreciation, which may result in the growth of both domestic and international accommodation demand. Group maintains a positive outlook in China for its upscale hotel accommodation segment, despite the oversupply in rooms. In Singapore, prospects are expected to remain healthy on the back of a stable economic growth, strong tourism growth and high level of hotel occupancy rates. AHT trades at par to its NAV of $0.76.