After Singapore’s visitor arrivals rose 16% on-year in November, marking the 12th consecutive month of record arrivals, UOB KayHian forecasts arrivals to grow 10% on-year in 2011 to 13.1 million “as Singapore gears itself for the next round of attractions, including Gardens by the Bay, River Safari at Mandai and the Lion King musical.” 
The house continues to prefer hospitality REITs “with the next leg of RevPAR growth driven by the further pick-up in average room rate on sustained high occupancy levels.” 

 

It forecasts RevPAR to grow 17% in 2011 and 13% in 2012, primarily driven by a 15% and 10% increase in ARR. It’s top pick is CDL Hospitality Trusts (J85.SG), rated Buy with $2.45 target, “with its Singapore hotels strategically located near the IRs and along the Orchard Road shopping belt.” 

 

The house also likes Ascott REIT (A68U.SG), rated Buy with $1.40 target. 

 

Shares are +1.4% at $2.11 and +0.8% at $1.23, respectively.