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Industry: Accommodation       

Fourth consecutive quarter of REVPAU recovery in 2Q 2021

(TRAVPR.COM) SINGAPORE - July 27th, 2021 - Ascott Residence Trust (ART) raised its distribution per stapled security (DPS) for 1H 2021 by 95% to 2.05 cents compared to 1H 2020 through active portfolio optimisation. ART achieved S$360 million in net gains from its divestments from 2019 to 2021 to date. The distributable income for 1H 2021 grew 96% year-on-year (y-o-y) to S$63.8 million. The distributable income for 1H 2021 included a one-off partial distribution of divestment gains of S$20 million to share divestment gains with Stapled Securityholders, replace income loss from divested assets and mitigate the impact of COVID-19 on distributions. It also included termination fee income received[1] and realised exchange gains.

ART’s portfolio revenue per available unit (REVPAU[2]) has risen over four consecutive quarters since 2Q 2020, with an increase of 18% from 1Q 2021 to 2Q 2021. For 1H 2021, ART’s portfolio REVPAU was S$60. On a same-store basis[3], the revenue and gross profit for 2Q 2021 were 45% and 56% higher respectively compared to 2Q 2020.

Revenue for 1H 2021 decreased by 11% y-o-y to S$185.0 million, mainly attributed to an absence of contributions from six properties[4] which were all divested at a premium to book value, and lower revenue from the existing portfolio due to the impact of COVID-19. This was partially offset by the additional contribution of S$3.6 million from Quest Macquarie Park Sydney in Australia which was acquired in February 2020, ART’s first student accommodation asset, Paloma West Midtown[5] in Georgia, United States of America (USA), acquired in February 2021 as well as three rental housing properties[6] in Sapporo, Japan that were acquired in June 2021.

Gross profit for 1H 2021 was S$82.1 million, about 74% of which were stable income contribution by properties on master leases, properties on management contracts with minimum guaranteed income as well as management contracts of ART’s rental housing and student accommodation assets. There are no master leases expiring in 2021 and ART’s portfolio continues to generate profit and positive cashflow. Park Hotel Clarke Quay in Singapore is in the process of being repossessed by ART and the managers of ART are assessing options for the operations of the property. A provision of S$5.3 million has been made in 1H 2021 for the outstanding rents and the master lease, expiring in 2023, will subsequently be terminated. Assuming a same-store basis3, gross profit for 1H 2021 was relatively stable due to lower operating costs.

Mr Bob Tan, Chairman of Ascott Residence Trust Management Limited (ARTML) and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “ART’s predominantly long-stay properties, geographically diverse portfolio and presence in large domestic markets offer resilience and it is well-placed to benefit as the global economy recovers[7]. ART has been actively reconstituting and enhancing our portfolio by redeploying divestment proceeds into higher-yielding and long-stay assets to increase stable income and create greater value for our Stapled Securityholders. ART has received about S$580 million in proceeds from the divestment of our six properties at about 2%[8] average exit yield. In 1H 2021, our total investments of about S$285 million were at an average EBITDA yield of about 5%.”

“With about S$140 million remaining in divestment proceeds and a debt headroom of S$1.9 billion, ART has a strong financial capacity to seek investment opportunities in more long-stay lodging assets to deliver sustainable, long-term value to our Stapled Securityholders. ART aims to expand our asset allocation in rental housing and student accommodation properties from about 9% currently to about 15-20% of our total property value in the medium term,” added Mr Tan.

Ms Beh Siew Kim, Chief Executive Officer of ARTML and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “As governments around the world step up their vaccination programmes amid emerging variants of COVID-19 and start to ease restrictions on international travel, we are cautiously optimistic of the varied pace of recovery across global markets. The initial phase of recovery remains largely driven by the domestic and essential corporate travel segments, and the return of international demand may be more gradual. ART’s properties in China continued to lead the recovery with higher corporate demand while properties in Europe benefitted from leisure demand brought on by the summer season. The block bookings at our properties in Australia, Singapore and USA, as well as the long stays in Indonesia, Philippines and Vietnam continued to offer stability.”

“ART’s expansion of our rental housing and student accommodation portfolios will generate greater stable returns. The three Japan rental housing properties we acquired in June 2021 will immediately contribute stable income, given their long leases of about two years and high occupancy rates. The average EBITDA yield of the three rental housing properties is approximately 4%. Our first student accommodation asset, Paloma West Midtown is 97%[9] pre-leased for the Fall 2021 semester, in line with pre-pandemic pre-leasing rates. Our second student accommodation asset in South Carolina, USA which we will jointly develop with our sponsor, The Ascott Limited, has a target stabilised EBITDA yield of about 6.2%. It offers an attractive yield on cost and potential development upside,” added Ms Beh.

Rejuvenating ART’s portfolio to create greater value for Stapled Securityholders
ART is rejuvenating its portfolio with four projects in Singapore and the USA undergoing asset enhancement or development. ART’s maiden development project and coliving property, lyf one-north Singapore, is expected to complete in 4Q 2021. The 324-unit coliving property situated within Singapore’s research and innovation business hub of one-north has achieved the Green Mark GoldPLUS award by the Building and Construction Authority of Singapore.

Development of the new Somerset serviced residence at the Liang Court site in Singapore has commenced and is scheduled to complete in 2H 2025. The new 192-unit Somerset serviced residence will be part of an iconic riverfront integrated development.

In the USA, in addition to the construction of its second student accommodation asset, ART’s US$10 million refurbishment of its Hotel Central Times Square in New York has commenced in April 2021. The rebranded property is expected to launch in 4Q 2021 as voco - an upscale brand under IHG Hotels & Resorts, well-positioned to capture demand from domestic leisure travellers as the market recovers. The 224-room voco Times Square South will provide guests a thoughtful, relaxed and charming experience.

Strong financial and cashflow positions
ART’s strong financial and cashflow positions give it the flexibility to invest in quality assets, pare down debt and/or distribute part of the gains from divestments to Stapled Securityholders. ART has a total of approximately S$1.17 billion in cash on-hand and unutilised credit facilities as at 30 June 2021.

ART’s effective borrowing cost remains low at 1.6% per annum. ART’s gearing of 35.9% as at 30 June 2021 is well below the 50% gearing threshold set by the Monetary Authority of Singapore. 

Summary of Results


1H 2021 1H 2020 Variance % 
Revenue (S$ million)




Gross Profit (S$ million)




Distributable Income (S$ million)

63.8 (1)

32.6 (2)


Distribution Per Stapled Security (DPS) (cents)




Revenue Per Available Unit (REVPAU) (S$/day)




(1)   Distributable income for 1H 2021 included:

a)      a one-off partial distribution of divestment gains of S$20 million to share divestment gains with Stapled Securityholders, replace income loss from divested assets and mitigate the impact of COVID-19 on distributions.
b)      termination fee income received upon termination of the sale of Citadines Xinghai Suzhou and Citadines Zhuankou Wuhan.
c)      realised exchange gain on the receipt of the divestment proceeds.
d)      realised exchange gain arising from the repayment of foreign currency bank loans with the divestment proceeds.

(2)   In view of the uncertainty surrounding the COVID-19 situation, ART had retained approximately 15% (S$5.0 million) of its income available for distribution to Stapled Securityholders, as rent negotiations are still on-going and ART may grant further rental deferment and/or waivers to support some tenants through this challenging period.

To mitigate the impact of COVID-19 on distributions and to share past divestment gains with Stapled Securityholders, ART had included a S$5.0 million top-up in the 1H 2020 distribution.

Distribution and Book Closure Date

ART’s distributions, made on a semi-annual basis, are as follows:


For 1 January 2021 to 30 June 2021

Distribution Rate

2.045 cents per Stapled Security

Book Closure Date

4 August 2021

Payment Date

27 August 2021

For ART’s 1H 2021 financial statement and presentation, please visit 


[1] For the termination of the sale of Citadines Xinghai Suzhou and Citadines Zhuankou Wuhan.
[2] Portfolio RevPAU refers to the revenue per available unit of properties under management contracts and management contracts with minimum guaranteed income. It excludes master leases, rental housing and student accommodation.
[3] Excluding acquisitions and divestments in 2020 and 2021.
[4] The six properties are Somerset Liang Court in Singapore, Ascott Guangzhou and Somerset Xu Hui in China, Somerset Azabu East in Japan as well as Citadines City Centre Grenoble and Citadines Didot Montparnasse Paris in France.
[5] Formerly Signature West Midtown.
[6] The three rental housing properties are City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo.
[7] According to the ‘World Economic Outlook’ (April 2021) by the International Monetary Fund, the global economy is projected to grow 6% in 2021, with a stronger performance expected in 2H 2021.
[8] Exit yield is computed based on the properties’ EBITDA in the last financial year before they were divested; excludes the divestment of Somerset Liang Court Singapore as it is a partial sale of GFA and the exit yield is therefore not meaningful for the purpose of this computation.
[9] As of July 2021.


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