Despite a mixed bag of performances by Ascott Residence Trust (ART) and CDL Hospitality Trusts (CDLHT) for the 1QFY2021, CGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee have maintained “overweight” on the Singapore REITs sector.

The analysts have also kept their “add” calls on ART and CDLHT with target prices of $1.20 and $1.43 respectively.

That said, Eing and Lock have indicated their preference for ART given its larger exposure to countries with strong domestic demand and lower rates of infection.

“About 40% of ART’s assets under management (AUM) in the FY2020 was from Singapore, Australia and China which should deliver stable performance due to government contracts, strong domestic demand and low Covid-19 cases,” they write in an April 29 report.

In comparison, some 66% of CDLHT’s AUM in FY2020 came from Singapore.


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As at the time of writing, the analysts estimate that the travel bubble between Singapore and Hong Kong, which is set to be launched on May 26, as well as a potential travel bubble between Singapore and Australia should lend a boost to the demand for CDLHT’s hotels.

Meanwhile, four of its six hotels in Singapore will be boosted by government contracts.

The way Eing and Lock see it, the REITs’ Singapore hotels were largely supported by government contracts, which will see them through at least mid-2021.

ART, on April 29, reported an improvement in operating performance for the 1QFY2021 ended March as it continued to generate profits and positive cash flow during the quarter.

CDLHT saw 2.8% and 1% improvement y-o-y in its revenue and net property income (NPI) for the 1QFY2021 ended March at $34 million and $19.8 million respectively mainly driven by the reopening of Raffles Maldives, as well as strong leisure demand in the Maldives and New Zealand, where the REIT has properties in.

On a q-o-q basis, CDLHT’s revenue and NPI fell 4% and 19% respectively.


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Overseas performance was mixed for both ART and CDLHT. ART saw q-o-q improvement from Australia and the US, and slight declines from China and Vietnam.

CDLHT’s Maldives property saw 114% y-o-y in revenue per average room (RevPAR) driven by the operation ramp-up of Raffles Maldives and leisure demand from Eastern Europe. The REIT also saw q-o-q improvement from New Zealand and Australia.

Units in ART and CDLHT closed at $1.04 and $1.25 on May 3 respectively.