Ascendas Hospitality Trust (SGX: Q1P) is a stapled trust, meaning that it’s comprised of both a real estate investment trust and a business trust. The two trusts are named as Ascendas Hospitality Real Estate Investment Trust (REIT) and Ascendas Hospitality Business Trust, respectively.
Ascendas Hospitality Trust concentrates on owning a portfolio of hospitality real estate. The trust currently has 12 hotels across Japan, Australia, Singapore and China. It announced its full year results on 15 May 2014.
How did it fare?
For the financial year ended 31 March 2014, the trust achieved an amazing 52.9% increase in gross revenue to S$210.6 million compared to a year ago. The growth was mainly due to new contributions from Park Hotel Clarke Quay, which was acquired in June 2013. Additionally, the trust’s hotels in Australia have been performing well.
Consequently, distributable income at the trust had improved by 57.4% to S$54.6 million. A higher unit count though, meant that Ascendas Hospitality Trust’s distributions per unit (DPU) had managed to jump by ‘only’ 28.1% to 5.52 Singapore cents.
The trust’s hotels in Australia, which account for most of its asset value, saw their average occupancy rates increase from 80.3% a year ago to 81%. In combination with a higher average daily rate of A$168 per room, the trust’s Australian portfolio achieved a 43.2% increase to S$53.1 million in net property income.
The gearing of the trust (computed based on total debt over total assets) had improved very slightly from a ratio of 35.8% as of the end of 2013; the trust’s gearing was at 35.6% as of 31 March 2014. There were also further improvements to the trust’s balance sheet as it managed to reduce the weighted average interest rate for its borrowings to only 2.6% from 3.0% just three months ago.
All told, Ascendas Hospitality Trust ended its financial year with a net asset value per unit of S$0.77, up from S$0.73 a year ago.
The manger of Ascendas Hospitality Trust expects the trust’s Australian properties to see “stable revenue growth” in the next financial year. Management is also positive on China with “moderate growth in hotels” expected.
In Japan, the trust had recently acquired a new asset, the Osaka Namba Washington Hotel Plaza, which will enlarge the trust’s business operations in the country. Lastly, growth in Singapore’s tourism and hospitality sector (the Singapore Tourism board expects 16.3 million to 16.8 million visitors to Singapore in 2014, an increase of 5.2% to 8.4%) should bode well for the trust’s portfolio here.
Ascendas Hospitality Trust had a wonderful financial year with strong double digit growth in a number of important financial metrics as mentioned earlier. With the closing price of the trust at S$0.725 on Friday, that translates to a historical distribution yield of 7.6%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.