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Industry: Hotels       

FY 2018 Unitholders’ distribution of S$154.8 million is record high for third consecutive year

(TRAVPR.COM) SINGAPORE - January 29th, 2019 - Singapore, 29 January 2019 – Ascott Residence Trust’s (Ascott Reit) distribution per unit (DPU) increased 5% year-on-year to 2.15 cents in 4Q 2018. Unitholders’ distribution for             FY 2018 is a record high at S$154.8 million, a 2% increase from FY 2017. This was on the back of 4Q 2018 Unitholders’ distribution rising 6% to S$46.5 million over 4Q 2017.

Gross profit for 4Q 2018 increased 3% to S$63.4 million due to higher revenue. Revenue grew 2% to S$136.5 million. This was mainly contributed by the additional revenue of S$0.4 million from Ascott Orchard Singapore acquired in October 2017 and higher revenue of S$2.7 million from existing properties, partially offset by the decrease in revenue of S$1.1 million from divestments[1]. On a same-store basis, gross profit and revenue also increased. Ascott Reit’s revenue per available unit (RevPAU) for 4Q 2018 increased 5% year-on-year to S$163.


Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Ascott Reit achieved record high Unitholders’ distribution for the third consecutive year. Ascott Reit’s ability to deliver stable returns is a result of our efforts in building a geographically diversified portfolio of quality properties. We continued to strengthen Ascott Reit’s position as the largest hospitality REIT in Singapore by acquiring a prime site to build lyf one-north Singapore, our first coliving property.”

Mr Tan added: “As part of our proactive portfolio reconstitution strategy, we completed the divestment of two serviced residences in Shanghai and Xi’an in early 2018. The FY 2018 distribution included S$6.5 million, part of the net gains from the sale of these two properties. We also recently announced the sale of Ascott Raffles Place Singapore. These divestments will give Ascott Reit the financial flexibility to invest in new accretive opportunities that will enhance our portfolio and returns to Unitholders.”

In 4Q 2018, Ascott Reit’s key markets with strong operating performance include the United States, China and Japan. Gross profit for the United States surged 17%[2], underpinned by higher demand and increased revenue from the upgraded apartments at Sheraton Tribeca New York Hotel. In China, excluding the contribution from Citadines Gaoxin Xi’an and Citadines Biyun Shanghai that were divested in January 2018, gross profit grew 16%2 as there were more guests on long stay. Similarly, Japan’s gross profit rose 12%2 due to stronger corporate and leisure demand in Tokyo.

Ms Beh Siew Kim, ARTML’s Chief Executive Officer, said: “Enhancing Unitholders’ returns through proactive asset management, including refurbishing our properties and leveraging technology, continues to be our priority. Our refurbished properties have not only created a better experience for guests, average daily rates for these properties have also increased about 10% to 20% due to stronger demand. During the year, we completed the refurbishments for Ascott Makati, Citadines Arnulfpark Munich, Citadines Trocadéro Paris, Somerset Grand Hanoi and Sheraton Tribeca New York Hotel. We are also carrying out refurbishment works at Somerset Grand Citra Jakarta and Element New York Times Square West, to be completed this year.”

The International Monetary Fund has revised its global economic growth forecast from 3.7% to 3.5%[3] for 2019. The modest growth stems from economic uncertainties arising from trade tensions, uncertainties about Brexit and tighter financial markets. As for the hospitality industry, the number of international travellers is expected to increase by 6%[4] in 2019. However, competition arising from new supply and higher operating costs may remain a challenge. With a well-diversified portfolio spanning over 14 countries and no earnings concentration risk in any single market, Ascott Reit remains resilient in providing stable returns to its Unitholders.

Ms Beh added: “While there are mixed views regarding further interest rate hikes in 2019, any possible increase is not expected to have any significant impact to Ascott Reit’s total returns. We maintain a disciplined and prudent approach towards capital management, with 80% of Ascott Reit’s total borrowings on fixed interest rates and a well-spread debt maturity where less than 5% of debt will mature in 2019. Ascott Reit’s gearing stands at a healthy 36.7%. We will continue to monitor and manage its interest rate and exchange rate exposure.”

Ascott Reit’s ‘BBB’ investment grade status by Fitch Ratings provides credit assurance to stakeholders, enabling Ascott Reit to raise funds at attractive rates and terms.

For 2018, Ascott Reit’s earnings before interest, taxes, depreciation and amortisation (EBITDA) breakdown (excluding corporate expenses) according to the FTSE classification of markets is 75% for developed markets.

[1] Ascott Reit completed the divestment of Citadines Biyun Shanghai and Citadines Gaoxin Xi’an in China on                5 January 2018.

[2] Based on gross profit in local currencies.

[3] “World Economic Outlook Update, January 2019: A Weakening Global Expansion” (21 January 2019), International Monetary Fund.

[4] “International tourism continues its success story with solid growth” (3 December 2018), World Travel Monitor® by IPK International.


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