Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

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Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Far East Hospitality Trust / Equity Bottom-Up

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<ul>
<li>
Of the trusts on SGX, the three largest hospitality trusts by market capitalisation are Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust. In the last week of July, the trio reported earnings for the six months ended 30 June 2020. 
	 </li>
	<li>
For 1H2020, ART, CDLHT and FEHT averaged a DPS of 1.20 Singapore cents, reflecting an average 58.8% decline. CDL Hospitality Trusts reported the highest DPS of 1.51 Singapore cents. Gross revenue for the trio averaged S$101.6 million, down 27.1% YoY. 
	 </li>
	<li>As at 30 June 2020, the trio averaged an aggregate leverage ratio of 37.5%, compared with an average 36.1% as at 31 Dec 2019. Interest cover for the trio averaged 3.2 times as at 30 June 2020.</li>
</ul>
 

Of the trusts on SGX, the three largest hospitality trusts by market capitalisation are Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust. <a href="https://www.ascottresidencetrust.com/">Ascott Residence Trust</a> (ART) is the largest hospitality trust in Asia Pacific with an asset value of S$7.4 billion. Its international portfolio comprises 88 properties with more than 16,000 units in 39 cities across 15 countries in Asia Pacific, Europe and the US. The properties are mostly operated under the Ascott The Residence, Somerset, Quest and Citadines brands. <a href="http://www.cdlht.com/">CDL Hospitality Trusts</a> (CDLHT) is one of Asia's leading hospitality trusts with assets valued at S$2.8 billion. CDLHT currently owns 19 properties with a total of 4,926 hotel rooms, comprising six hotels and a retail mall in Singapore, three hotels in Australia, one hotel in New Zealand, two hotels in Japan, two hotels in United Kingdom, one hotel in Germany, one hotel in Italy and two resorts in Maldives. <a href="http://www.fehtrust.com/">Far East Hospitality Trust</a>'s (FEHT) portfolio has 13 properties, comprising 9 hotels and 4 serviced residences, strategically located within close proximity to business districts, leisure attractions, MICE facilities and healthcare facilities. Totalling 3,143 hotel rooms and apartment units, the Singapore-focused portfolio is valued at approximately S$2.65 billion. 
In the last week of July, the trio reported earnings for the six months ended 30 June 2020. DPU Highlights  
For the six months ended 30 June 2020, ART, CDLHT and FEHT averaged a distribution per stapled security (DPS) of 1.20 Singapore cents, reflecting an average 58.8% decline. CDL Hospitality Trusts reported the highest DPS of 1.51 Singapore cents.

Gross revenue averaged S$101.6 million, down 27.1% YoY. CDLHT and FEHT reported net property income of S$29.7 million and S$38.6 million, down 56.0% and 23.1% YoY respectively. ART reported a gross profit – instead of net property income – of S$88.6 million, down 27.6% YoY.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			DPS (SG cts)
			</td>
			<td>
			YoY Chg (%)
			</td>
			<td>
			Net Property Income (S$M)
			</td>
			<td>
			YoY Chg (%)
			</td>
			<td>
			Gross Revenue (S$M)
			</td>
			<td>
			YoY Chg (%)
			</td>
		</tr>
<tr>
<td>
			ASCOTT RESIDENCE TRUST
			</td>
			<td>
			1.05
			</td>
			<td>
			-69.4
			</td>
			<td>
			88.6*
			</td>
			<td>
			-27.6
			</td>
			<td>
			208.5
			</td>
			<td>
			-16.1
			</td>
		</tr>
<tr>
<td>
			CDL HOSPITALITY TRUSTS
			</td>
			<td>
			1.51
			</td>
			<td>
			-63.7
			</td>
			<td>
			29.7
			</td>
			<td>
			-56.0
			</td>
			<td>
			52.1
			</td>
			<td>
			-44.5
			</td>
		</tr>
<tr>
<td>
			FAR EAST HOSPITALITY TRUST
			</td>
			<td>
			1.03
			</td>
			<td>
			-43.4
			</td>
			<td>
			38.6
			</td>
			<td>
			-23.1
			</td>
			<td>
			44.3
			</td>
			<td>
			-20.6
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			1.20
			</td>
			<td>
			-58.8
			</td>
			<td>
			52.3
			</td>
			<td>
			-35.6
			</td>
			<td>
			101.6
			</td>
			<td>
			-27.1
			</td>
		</tr>
</tbody></table>
 Source: Company data

*Gross profit figure was provided instead of net property income

 

Debt Profiles

As at 30 June 2020, ART, CDHT and FEHT averaged an aggregate leverage ratio of 37.5%, compared with an average 36.1% as at 31 December 2019. FEHT had the highest aggregate leverage ratio of 39.2%, while ART clocked the lowest, at 36.1%. Interest cover for the trio averaged 3.2 times as at 30 June 2020.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			Aggregate Leverage Ratio (%) as at 30 June 2020
			</td>
			<td>
			Aggregate Leverage Ratio (%) as at 31 Dec 2019
			</td>
			<td>
			Interest Coverage Ratio (x) as at 30 June 2020
			</td>
			<td>
			Interest Coverage Ratio (x) as at 31 Dec 2019
			</td>
		</tr>
<tr>
<td>
			ASCOTT RESIDENCE TRUST
			</td>
			<td>
			36.1
			</td>
			<td>
			33.6
			</td>
			<td>
			3.6
			</td>
			<td>
			5.6
			</td>
		</tr>
<tr>
<td>
			CDL HOSPITALITY TRUSTS
			</td>
			<td>
			37.1
			</td>
			<td>
			35.4
			</td>
			<td>
			3.4
			</td>
			<td>
			4.7
			</td>
		</tr>
<tr>
<td>
			FAR EAST HOSPITALITY TRUST
			</td>
			<td>
			39.2
			</td>
			<td>
			39.2
			</td>
			<td>
			2.7
			</td>
			<td>
			NA
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			37.5
			</td>
			<td>
			36.1
			</td>
			<td>
			3.2
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
 Source: Company data 
NA: not available 
 

Outlook Ascott Residence Trust 

<ul>
<li>ART’s geographically diversified portfolio and focus on the long-stay segment have helped to buffer some of the impact of COVID-19</li>
	<li>We expect recovery of the hospitality industry to be led by the domestic, leisure and free independent travel segments and ART’s properties are well-placed to cater to the needs of these first travellers
	<ul>
<li>Together with our partners, ART’s immediate focus is to capture accommodation demand from these segments and continue to source for alternative business opportunities</li>
		<li>We are also taking steps to future-ready our properties, eg. leveraging the work-from-home trend, we have redesigned some of our apartments and introduced daytime work-stay packages to cater to guests who need a productive and conducive environment to work remotely</li>
	</ul>
</li>
	<li>We have also leveraged technologies to optimise operational efficiencies and minimise physical contact for the safety of our guests</li>
	<li>Given the risk of resurgence of COVID-19, we expect the revenue per available unit (RevPAU) of our properties to remain under pressure in the near term</li>
	<li>We will continue to strengthen ART’s financial position through active portfolio management and capital recycling, and exercise prudence in managing our capital and cashflow; the trust remains well capitalised with sufficient liquidity to navigate through the crisis
	<ul>
<li>ART has entered into two conditional agreements in July 2020 to divest Ascott Guangzhou in China and Citadines Didot Montparnasse Paris in France for a total of S$191.4 million, at 52% and 69% above their respective book values</li>
		<li>These divestments have further strengthened ART’s financial position, and it is expected to realise total estimated net gains of about S$23.2 million upon the completion of both transactions</li>
	</ul>
</li>
</ul>
<ul>
<li>Redevelopment works at the site of Somerset Liang Court Singapore will commence soon – the brand new Somerset serviced residence with a fresh 99-year lease is expected to open in 1H 2025, while lyf one-north Singapore, ART’s first co-living property, is also on track to open in 2021</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/6EM170V58FJQ2Y1L/20200728_News%20Release.pdf">here</a> for full results release.

 

CDL Hospitality Trusts

<ul>
<li>By working closely with our lessees and operators and have managed to aggressively contain costs and to pursue and secure alternative revenue channels</li>
	<li>We have also fortified our financial position through securing a new S$100 million credit facility in June and conserving cash
	<ul>
<li>As at 30 June 2020, CDLHT has a gearing 37.1% and ample debt headroom of S$777 million (at 50% gearing limit)</li>
		<li>In mid-July 2020, the divestment of Novotel Singapore Clarke Quay and acquisition of W Singapore - Sentosa Cove were completed.</li>
		<li>The conclusion of the two deals also augmented CDLHT’s balance sheet with a net cash inflow of $26.8 million; including this net cash inflow post balance sheet date, CDLHT has cash reserves of almost S$150 million and S$520 million of available credit facilities</li>
	</ul>
</li>
	<li>International travel, which is still largely restricted, will take time to recover and the pace of which is contingent upon a viable medical solution
	<ul>
<li>Nonetheless, we are preparing ourselves for an eventual recovery in global tourism, and keeping faith with the long term growth prospects of our markets even though there is significant short term uncertainty</li>
		<li>Singapore is committed on bringing its various mega tourism infrastructure plans to fruition in order to continually enhance its attractiveness as a tourism destination</li>
	</ul>
</li>
	<li>While we are deferring non-essential capital expenditure, we have utilized periods of low occupancy to carry out critical guests-related asset enhancement works</li>
</ul>
 Click <a href="http://investor.cdlht.com/newsroom/20200729_073445_J85_FOP0T9LPQT9MXNU3.2.pdf">here</a> for full results release. 
 

Far East Hospitality Trust

<ul>
<li>As at 30 June 2020, total debt stood at S$990.8 million, of which 60.3% was secured at fixed interest rates
	<ul>
<li>The weighted average debt to maturity was 2.8 years and average cost of debt was 2.5% per annum</li>
		<li>In October 2019, a 2-year S$100 million term loan due to mature in April 2020 was extended to a 2.5-year S$60 million term loan and 5-year S$40 million term loan ahead of its maturity; there are no other term loans maturing in 2020.</li>
	</ul>
</li>
	<li>The Singapore hospitality industry will continue to be impacted by travel restrictions and concerns over the spread of the COVID-19 virus
	<ul>
<li>The serviced residences, with a higher proportion of long leases, are expected to be more resilient than the hotels</li>
	</ul>
</li>
	<li>Tenants in the commercial premises of the Trust are affected by the economic slowdown and regulatory restrictions, and will require further support and rental rebates</li>
	<li>A mitigating factor for FEHT is the fixed rent component in the master leases covering all the properties in the portfolio, providing a downside protection for stapled security holders in adverse and volatile conditions such as the current crisis</li>
	<li>With vaccine development making progress in various countries, the REIT Manager is hopeful that the hospitality sector can recover from this setback in 2021</li>
	<li>Meanwhile, the REIT Manager will focus on optimising the performance of its portfolio, carrying out cost containment measures, and expediting asset enhancements to prepare for the eventual upturn</li>
	<li>The REIT Manager will also continue to explore suitable redevelopment opportunities for the properties in the Trust so as to extract greater value and achieve better returns</li>
	<li>The review of the management fee structure by the REIT Manager undertaken in end 2019 has resulted in lower management fees for the Trust with effect from this year</li>
</ul>
Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/ZHWW5Y4CIQ7CSDIW/Press%20Release.pdf">here</a> for full results release.
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Of the trusts on SGX, the three largest hospitality trusts by market capitalisation are Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust. In the last week of July, the trio reported earnings for the six months ended 30 June 2020. 
	 
	
For 1H2020, ART, CDLHT and FEHT averaged a DPS of 1.20 Singapore cents, reflecting an average 58.8% decline. CDL Hospitality Trusts reported the highest DPS of 1.51 Singapore cents. Gross revenue for the trio averaged S$101.6 million, down 27.1% YoY. 
	 
	As at 30 June 2020, the trio averaged an aggregate leverage ratio of 37.5%, compared with an average 36.1% as at 31 Dec 2019. Interest cover for the trio averaged 3.2 times as at 30 June 2020.

 

Of the trusts on SGX, the three largest hospitality trusts by market capitalisation are Ascott Residence Trust, CDL Hospitality Trusts and Far East Hospitality Trust.  Ascott Residence Trust (ART) is the largest hospitality trust in Asia Pacific with an asset value of S$7.4 billion. Its international portfolio comprises 88 properties with more than 16,000 units in 39 cities across 15 countries in Asia Pacific, Europe and the US. The properties are mostly operated under the Ascott The Residence, Somerset, Quest and Citadines brands.  CDL Hospitality Trusts (CDLHT) is one of Asia's leading hospitality trusts with assets valued at S$2.8 billion. CDLHT currently owns 19 properties with a total of 4,926 hotel rooms, comprising six hotels and a retail mall in Singapore, three hotels in Australia, one hotel in New Zealand, two hotels in Japan, two hotels in United Kingdom, one hotel in Germany, one hotel in Italy and two resorts in Maldives.  Far East Hospitality Trust's (FEHT) portfolio has 13 properties, comprising 9 hotels and 4 serviced residences, strategically located within close proximity to business districts, leisure attractions, MICE facilities and healthcare facilities. Totalling 3,143 hotel rooms and apartment units, the Singapore-focused portfolio is valued at approximately S$2.65 billion.  
In the last week of July, the trio reported earnings for the six months ended 30 June 2020.  DPU Highlights   
For the six months ended 30 June 2020, ART, CDLHT and FEHT averaged a distribution per stapled security (DPS) of 1.20 Singapore cents, reflecting an average 58.8% decline. CDL Hospitality Trusts reported the highest DPS of 1.51 Singapore cents.

Gross revenue averaged S$101.6 million, down 27.1% YoY. CDLHT and FEHT reported net property income of S$29.7 million and S$38.6 million, down 56.0% and 23.1% YoY respectively. ART reported a gross profit – instead of net property income – of S$88.6 million, down 27.6% YoY.




			Name
			
			
			DPS (SG cts)
			
			
			YoY Chg (%)
			
			
			Net Property Income (S$M)
			
			
			YoY Chg (%)
			
			
			Gross Revenue (S$M)
			
			
			YoY Chg (%)
			
		


			ASCOTT RESIDENCE TRUST
			
			
			1.05
			
			
			-69.4
			
			
			88.6*
			
			
			-27.6
			
			
			208.5
			
			
			-16.1
			
		


			CDL HOSPITALITY TRUSTS
			
			
			1.51
			
			
			-63.7
			
			
			29.7
			
			
			-56.0
			
			
			52.1
			
			
			-44.5
			
		


			FAR EAST HOSPITALITY TRUST
			
			
			1.03
			
			
			-43.4
			
			
			38.6
			
			
			-23.1
			
			
			44.3
			
			
			-20.6
			
		


			Average
			
			
			1.20
			
			
			-58.8
			
			
			52.3
			
			
			-35.6
			
			
			101.6
			
			
			-27.1
			
		

 Source: Company data

*Gross profit figure was provided instead of net property income

 

Debt Profiles

As at 30 June 2020, ART, CDHT and FEHT averaged an aggregate leverage ratio of 37.5%, compared with an average 36.1% as at 31 December 2019. FEHT had the highest aggregate leverage ratio of 39.2%, while ART clocked the lowest, at 36.1%. Interest cover for the trio averaged 3.2 times as at 30 June 2020.




			Name
			
			
			Aggregate Leverage Ratio (%) as at 30 June 2020
			
			
			Aggregate Leverage Ratio (%) as at 31 Dec 2019
			
			
			Interest Coverage Ratio (x) as at 30 June 2020
			
			
			Interest Coverage Ratio (x) as at 31 Dec 2019
			
		


			ASCOTT RESIDENCE TRUST
			
			
			36.1
			
			
			33.6
			
			
			3.6
			
			
			5.6
			
		


			CDL HOSPITALITY TRUSTS
			
			
			37.1
			
			
			35.4
			
			
			3.4
			
			
			4.7
			
		


			FAR EAST HOSPITALITY TRUST
			
			
			39.2
			
			
			39.2
			
			
			2.7
			
			
			NA
			
		


			Average
			
			
			37.5
			
			
			36.1
			
			
			3.2
			
			
			 
			
		

 Source: Company data 
NA: not available 
 

Outlook  Ascott Residence Trust 


ART’s geographically diversified portfolio and focus on the long-stay segment have helped to buffer some of the impact of COVID-19
	We expect recovery of the hospitality industry to be led by the domestic, leisure and free independent travel segments and ART’s properties are well-placed to cater to the needs of these first travellers
	
Together with our partners, ART’s immediate focus is to capture accommodation demand from these segments and continue to source for alternative business opportunities
		We are also taking steps to future-ready our properties, eg. leveraging the work-from-home trend, we have redesigned some of our apartments and introduced daytime work-stay packages to cater to guests who need a productive and conducive environment to work remotely
	

	We have also leveraged technologies to optimise operational efficiencies and minimise physical contact for the safety of our guests
	Given the risk of resurgence of COVID-19, we expect the revenue per available unit (RevPAU) of our properties to remain under pressure in the near term
	We will continue to strengthen ART’s financial position through active portfolio management and capital recycling, and exercise prudence in managing our capital and cashflow; the trust remains well capitalised with sufficient liquidity to navigate through the crisis
	
ART has entered into two conditional agreements in July 2020 to divest Ascott Guangzhou in China and Citadines Didot Montparnasse Paris in France for a total of S$191.4 million, at 52% and 69% above their respective book values
		These divestments have further strengthened ART’s financial position, and it is expected to realise total estimated net gains of about S$23.2 million upon the completion of both transactions
	



Redevelopment works at the site of Somerset Liang Court Singapore will commence soon – the brand new Somerset serviced residence with a fresh 99-year lease is expected to open in 1H 2025, while lyf one-north Singapore, ART’s first co-living property, is also on track to open in 2021

 Click here for full results release.

 

CDL Hospitality Trusts


By working closely with our lessees and operators and have managed to aggressively contain costs and to pursue and secure alternative revenue channels
	We have also fortified our financial position through securing a new S$100 million credit facility in June and conserving cash
	
As at 30 June 2020, CDLHT has a gearing 37.1% and ample debt headroom of S$777 million (at 50% gearing limit)
		In mid-July 2020, the divestment of Novotel Singapore Clarke Quay and acquisition of W Singapore - Sentosa Cove were completed.
		The conclusion of the two deals also augmented CDLHT’s balance sheet with a net cash inflow of $26.8 million; including this net cash inflow post balance sheet date, CDLHT has cash reserves of almost S$150 million and S$520 million of available credit facilities
	

	International travel, which is still largely restricted, will take time to recover and the pace of which is contingent upon a viable medical solution
	
Nonetheless, we are preparing ourselves for an eventual recovery in global tourism, and keeping faith with the long term growth prospects of our markets even though there is significant short term uncertainty
		Singapore is committed on bringing its various mega tourism infrastructure plans to fruition in order to continually enhance its attractiveness as a tourism destination
	

	While we are deferring non-essential capital expenditure, we have utilized periods of low occupancy to carry out critical guests-related asset enhancement works

 Click here for full results release. 
 

Far East Hospitality Trust


As at 30 June 2020, total debt stood at S$990.8 million, of which 60.3% was secured at fixed interest rates
	
The weighted average debt to maturity was 2.8 years and average cost of debt was 2.5% per annum
		In October 2019, a 2-year S$100 million term loan due to mature in April 2020 was extended to a 2.5-year S$60 million term loan and 5-year S$40 million term loan ahead of its maturity; there are no other term loans maturing in 2020.
	

	The Singapore hospitality industry will continue to be impacted by travel restrictions and concerns over the spread of the COVID-19 virus
	
The serviced residences, with a higher proportion of long leases, are expected to be more resilient than the hotels
	

	Tenants in the commercial premises of the Trust are affected by the economic slowdown and regulatory restrictions, and will require further support and rental rebates
	A mitigating factor for FEHT is the fixed rent component in the master leases covering all the properties in the portfolio, providing a downside protection for stapled security holders in adverse and volatile conditions such as the current crisis
	With vaccine development making progress in various countries, the REIT Manager is hopeful that the hospitality sector can recover from this setback in 2021
	Meanwhile, the REIT Manager will focus on optimising the performance of its portfolio, carrying out cost containment measures, and expediting asset enhancements to prepare for the eventual upturn
	The REIT Manager will also continue to explore suitable redevelopment opportunities for the properties in the Trust so as to extract greater value and achieve better returns
	The review of the management fee structure by the REIT Manager undertaken in end 2019 has resulted in lower management fees for the Trust with effect from this year

Click here for full results release.



1H2020 Earnings of Three Largest Hospitality Trusts