The Robertson House by The Crest Collection in Singapore’s Clarke Quay (Image: CapitaLand Ascott Trust)
The global travel recovery drove demand at CapitaLand Ascott Trust in 2023, with the Singapore-listed lodging REIT’s full-year distribution rising 25 percent to S$237 million ($176.7 million).
CLAS, a stapled trust comprising CapitaLand Ascott REIT and CapitaLand Ascott Business Trust, increased its distribution per stapled security by 16 percent to 6.57 Singapore cents ($0.05), the trust’s managers said Monday in a release.
The 106-asset portfolio’s revenue per available unit climbed 23 percent to S$148 in 2023, reaching 103 percent of the pre-pandemic level during the second half of the year. Most of CLAS’s key markets — including China, Japan, the US and Vietnam — recorded year-on-year REVPAU growth in the fourth quarter.
“CLAS continued to deliver strong performance,” said Bob Tan, chairman of the trust’s managers, which are owned by Temasek-controlled CapitaLand Investment. “Our balanced portfolio of stable and growth income streams enables CLAS to capture growth opportunities while remaining resilient amidst uncertainties.”
Pruning the Portfolio
CLAS reported a fair-value gain on the year of S$156 million, marking a 2 percent increase in portfolio valuation, as a stronger operating performance and outlook for its portfolio overcame higher capitalisation rates and discount rates. Markets with valuation gains included Australia, Europe, Japan, Singapore and Britain.
Bob Tan of CapitaLand Ascott Trust
The last seven months saw the REIT announce the divestment of nine mature properties as part of what it calls a portfolio reconstitution strategy. The disposals include four French apartment assets for €44.4 million ($48 million), with the deal having closed in September, and the pending sales of two Sydney hotels to Chinese investors for A$109 million ($71 million) and three Osaka hotels to an Alyssa Partners-managed fund for JPY 10.7 billion ($75 million).
The proceeds from the sales are to go towards redeploying capital into higher-yielding assets, asset enhancement initiatives and deleveraging.
“Through our active portfolio reconstitution and AEI, we are enhancing the quality of our portfolio to create further value for stapled securityholders,” said Serena Teo, CEO of the managers. “We have eight properties undergoing or will undergo AEI.”
The fixer-uppers include Singapore’s Riverside Hotel Robertson Quay, which was rebranded and unveiled as The Robertson House by The Crest Collection last October. The 336-room hotel in Clarke Quay is on track for full AEI completion in the first quarter of this year.
Hotels Trending Hot
Asia Pacific hotel investment volume surged during the fourth quarter of 2023, according to JLL’s latest Capital Tracker report. Total volume of the region’s hotel transactions exceeded $3.3 billion in the October-December period, leaping 65 percent compared with the previous quarter.
“Many investors were motivated to close deals before the end of the year,” the consultancy said. “Despite this positive trend, the full-year hotel transaction volume for 2023 amounted to $9.8 billion, reflecting a 16 percent decrease from the previous year due to inflationary pressures and high interest rates.”
China, Australia and Japan emerged as the strongest markets for hotel capital market activity in the fourth quarter, the report said, with the three countries accounting for 80 percent of the region’s hotel transaction volume during the period.