7
ANNUAL REPORT 2014
Orchard Hotel Shopping Arcade was closed for asset
enhancement works in December 2013. It received its
Temporary Occupation Permit ("
TOP
") in March 2015 and is
slated for opening in second quarter of 2015. The mall will
be rebranded as Claymore Connect and repositioned as a
family-friendly mall with enhanced retail offerings.
Anchor tenants include supermarket retail giant Cold
Storage and early educational centre, MapleBear Singapore.
In addition, the mall also offers a good selection of F&B
outlets as well as numerous specialty and services shops.
With the new tenant mix, the revamped mall is expected to
cater to the needs of residents living in the nearby districts of
Orchard, Tanglin and Claymore.
For Maldives, the two additional beach villas for Jumeirah
Dhevanafushi are expected to be completed and operational
by second quarter of 2015.
We will continue to optimise the value of our existing assets
by implementing proactive asset enhancements. In 2015,
M Hotel will be going through a refurbishment exercise of
its rooms.
TOURISM OUTLOOK FOR KEY MARKETS IN 2015
2015 is likely to be an eventful year for Singapore tourism as
more visitors from surrounding countries are expected to visit
Singapore to join in the SG50 activities as part of the Golden
Jubilee celebrations. Complementary to this will be the
growing list of attractions such as the opening of the National
Gallery Singapore and Pinacothèque de Paris. In addition,
the hosting of the Southeast Asian Games in June coupled
with the addition of marquee sporting events such as the
Rugby Sevens World Series on top of the ongoing Formula
1 and Women's Tennis Association Finals, are also expected
to draw more tourists in Singapore and enhance Singapore's
attractiveness as a meetings, incentives, conventions and
exhibitions ("
MICE
") destination. Supporting the growth in
tourism is an estimated increase of 3,000 rooms in 2015.
The tourism sector is an important component of Singapore’s
economy, contributing close to 4% of Singapore's gross
domestic product ("
GDP
")
(5)
. To support Singapore’s appeal
as a leading international tourist destination, numerous
development plans are in the pipeline and these include the
development of Jewel - an iconic mixed-used complex at
Changi Airport, the construction of Changi Airport’s Terminal
4 and 5 to cope with higher passenger traffic as well as the
redevelopment of Mandai area into a world-class wildlife
reserve. The MICE industry will continue to be a key pillar of
Singapore tourism strategy given Singapore Tourism Board
("
STB
") continued efforts to attract higher yielding visitors to
Singapore. As such, we remain optimistic on the long-term
potential of the Singapore hospitality industry and believe that
CDLHT is positioned to benefit from Singapore's status as a
destination of choice among leisure and corporate travellers.
For Australia, economic outlook is expected to remain
cautious in 2015. The lack of new investments in the mining
sector due to the low commodity prices may continue to
affect hotel demand. However, the defensive lease structure
which provides CDLHT with largely fixed rent will help to
mitigate any weakness in the market. For Maldives, the
slowing growth in China and the continued strength of the
US dollar, exacerbated by the sustained weakness in the
euro and Russian rouble, will weigh on the performance of
Maldives tourism sector.
For Japan, tourism growth is likely to maintain its upwards
trajectory as it benefits from the various government initiatives
to bring in more tourists into Japan. The visa relaxation
schemes, increase in passenger capacity at Haneda Airport
as well as the expansion of duty-free shopping will support
the favourable tourism outlook and this is likely to benefit the
two Tokyo hotels that CDLHT acquired in December 2014.
FUTURE GROWTH SUPPORTED BY DISCIPLINED
CAPITAL MANAGEMENT
As at 31 December 2014, our gearing ratio stood at 31.7%
and interest coverage ratio remained healthy at 8.6 times.
In FY 2014, the H-REIT Manager successfully refinanced a
US$60.6 million (S$76.8 million) bridge loan for the acquisition
of Jumeirah Dhevanafushi and a S$70.0 million medium term
note into two 5-year floating term loans. In January 2015, the
H-REIT Manager exercised its option to convert the US dollar
floating rate term loan into a 5-year fixed rate term loan. With
a strong balance sheet and ample debt headroom, CDLHT is
well placed to capitalise on any acquisition opportunities in
the hospitality sector.
APPRECIATION
On behalf of the board, I would like to extend a warm
welcome to Ronald Issen, who joined the board on 7 April
2014. I would also like to take this opportunity to express
my heartfelt gratitude to my fellow board members for their
advice throughout as well as the management, partners, staff
and the H-REIT Trustee for their immeasurable contribution
and dedication to CDLHT.
Finally, I want to thank our Stapled Security holders for their
steadfast support during the year. I look forward to meeting
you at our annual general meeting on 29 April 2015.
Wong Hong Ren
Chairman
CHAIRMAN'S STATEMENT
(5) Singapore Tourism Board
