CDL Hospitality Trusts (CDLHT) reported a disappointing first half of 2025, with distribution per Stapled Security (DPS) dropping 21.1% year-on-year to 1.98 Singapore cents. This decline was primarily driven by a 14.2% fall in revenue per available room (RevPAR) for Singapore hotels, attributed to a high base effect and subdued corporate demand, according to DBS Group Research. However, the trust anticipates a stronger second half, buoyed by stabilising assets and a robust events calendar in Singapore, the UK, and Germany.
The trust’s UK and Japan portfolios provided some relief, with the UK seeing a 13.1% increase in net property income (NPI) due to contributions from new acquisitions like The Castings and Hotel Indigo Exeter. Japan also recorded an 11.4% NPI uplift. Despite these gains, increased interest costs from UK acquisitions and higher borrowing costs for The Castings pressured overall distributable income.
Looking ahead, DBS Group Research expects asset stabilisation and a favourable interest rate environment to support recovery. The trust’s management remains optimistic about achieving stabilised occupancy above 90% for The Castings by the fourth quarter of 2025. Additionally, the diversification into built-to-rent (BTR) and student accommodation (PBSA) sectors is expected to enhance resilience against cyclical hotel earnings.
Whilst the Singapore hotel market faces challenges from new supply and competitive pricing, the trust foresees gradual improvement, supported by a strong events pipeline and increased tourism. The trust’s strategic focus on diversification and proactive interest rate management positions it well for potential rate cuts in the latter half of 2025.
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