CDL Hospitality Trusts’ (CDLHT) net property income (NPI) for the first quarter ended Mar 31, 2024, rose 6.8 per cent to S$34.9 million, from S$32.7 million in the year-ago period.

This came on the back of a 7.3 per cent higher gross revenue of S$65.3 million, based on the stapled group’s business update on Tuesday (Apr 30).

The managers of the group, comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust, highlighted higher revenue per available room (RevPAR) across all geographical markets, largely driven by increased occupancies.

NPI of the group’s core market in Singapore improved by 12.8 per cent on the year to about S$22.1 million. RevPAR for the Singapore hotels was up 16.6 per cent at S$205, led by a 14.2 percentage-point increase in occupancy.

“Q1 2024 saw the return of significant demand drivers from a robust concert calendar, as well as a 30-day mutual visa exemption agreement between China and Singapore that commenced from Feb 9, 2024,” said the managers, adding that a “volume strategy” was adopted for the seasonally weaker quarter for the Singapore hotels.

Meanwhile, an earlier Easter this year tampered demand during the last week of the quarter, compromising performances of both Singapore and overseas properties.

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The stapled group’s properties in New Zealand, Australia, the UK and Germany all registered lower NPI despite higher RevPAR.

The New Zealand property – Grand Millennium Auckland – posted a marginal RevPAR increase of 0.8 per cent year on year, with food and beverage revenues affected by the closure of its ballroom for refurbishments in Q1.

“Increased operating expenses, compounded by a weaker New Zealand dollar against Singapore dollar, led to a decline of 17.3 per cent or S$500,000 year on year in NPI for Q1 2024,” said the managers.

The Perth hotels in the Australia portfolio registered a 6.4 per cent higher RevPAR. Similarly, higher operating costs, on top of unfavourable foreign exhange rates, led to a 9.5 per cent lower NPI for the quarter.

The manager highlighted that two of the three UK hotels – Hilton Cambridge City Centre and The Lowry Hotel – experienced lower profit margins due to higher operating costs, particularly in payroll and utilities. Overall NPI of the UK hotels was dragged down 5 per cent to S$2.1 million.

Pullman Hotel Munich in Germany recorded an 8.6 per cent higher RevPAR, but a 5.8 per cent lower NPI as only accounting base rent on a straight-line basis was recognised, said the manager. This came as higher repair, maintenance and utilities expenses from the commercial component weighed on the NPI.

Japan hotels posted a 32.6 per cent growth in RevPAR, the highest since 2014, on robust inbound demand. Correspondingly, NPI for the Japan hotels improved 46.2 per cent to S$1.1 million, despite the depreciation of the yen against the Singapore dollar.

As at Mar 31, CDLHT’s gearing stood at 37.8 per cent with about S$66.5 million of cash reserves and S$196.9 million of committed revolving credit and term loan facilities available.

The stapled group’s interest coverage ratio stood at 2.73 times, and weighted average cost of debt was 4.3 per cent, as at the end of Q1.

“With access to short-term uncommitted bridge loan facilities of S$400 million, CDLHT will continue to pursue suitable acquisitions to augment and diversify its income streams, while working closely with its lessees and operators to execute strategic asset enhancement opportunities to bolster the portfolio’s competitiveness,” said the managers.

Units of CDLHT : J85 0%closed on Monday up 1 per cent, or S$0.01, at S$0.975.