3
ANNUAL REPORT 2014
• Opportunities arising from divestment of assets by
owners or developers.
• Opportunities to acquire under-performing assets with
turnaround potential by implementing value-added
strategies such as re-flagging, management change and
asset enhancements.
Capital And Risk Management Strategy
TheH-REITManager intends to use a combination of debt and
equity to fund future acquisitions and property enhancements
such that it is within the "
Aggregate Leverage
" limit set
out in Appendix 6 of the Code on Collective Investment
Schemes, as applicable to property funds (the "
Property
Funds Appendix
").
The objectives of the H-REIT Manager in relation to capital
and risk management are to:
• maintain a strong balance sheet and remain within the
Aggregate Leverage limit set out in the Property Funds
Appendix;
• minimise the cost of debt financing;
• secure diversified funding sources from both financial
institutions and capital markets as H-REIT grows in size
and scale; and
• manage the exposure arising from adverse market
movements in interest rates and foreign exchange
through appropriate hedging strategies.
Active Asset Management
The H-REIT Manager actively engages its master lessees,
leveraging on H-REIT’s economies of scale and its
relationship with M&C, which has extensive experience in the
hospitality industry, to maximise the operating performance
and cash flow of the assets. In addition, it seeks to optimise
space utilisation through implementation of various asset
enhancement initiatives.
HBT’S STRATEGY
M&C Business Trust Management Limited, as trustee-
manager of HBT (the "
HBT Trustee-Manager
"), first activated
HBT at the end of 2013.
HBT may act as the master lessee(s) of other H-REIT’s hotels if
any of the following occurs:
• It is appointed by H-REIT, in the absence of any other
master lessee(s) being appointed, as a master lessee of
one of the hotel assets in H-REIT’s portfolio at the expiry
of the lease term. The intention is for HBT to appoint
professional hotel managers to manage these hotels.
• H-REIT acquires hotels in the future, and, if there are no
other suitable master lessees, H-REIT will lease these
acquired hotels to HBT. HBT will then become a master
lessee for these hotels and will appoint professional hotel
managers to manage these hotels.
HBT can also undertake certain hospitality and hospitality-
related development projects, acquisitions and investments,
which may not be suitable for H-REIT.
The HBT Group currently acts as the master lessees for three
of the properties in H-REIT’s portfolio, namely Jumeirah
Dhevanafushi, Hotel MyStays Asakusabashi and Hotel
MyStays Kamata, and appoints professional hotel managers
to manage these hotels/ resort.
Studio M Hotel
