On behalf of the Board of Directors of the H-REIT
Manager and the HBT Trustee-Manager, I am pleased to
present our annual report for FY 2015.
DIVERSIFICATION STRATEGY SUPPORTED
PORTFOLIO PERFORMANCE
Global economic conditions remained uncertain
throughout 2015 amidst turbulent financial markets
and this had an adverse impact on our portfolio overall.
However, our recent acquisitions of hotels in cities with
strong hospitality demand drivers such as Tokyo and
Cambridge have supported the portfolio performance
by providing the benefits of income diversification and
also helped to mitigate the softer trading conditions in
some of CDLHT’s key markets in 2015. CDLHT’s efforts
in broadening the earnings base have seen Singapore
properties' contribution to portfolio NPI reduce from
69.0% in FY 2014 to 66.4% in FY 2015.
For FY 2015, net property income of CDLHT decreased
2.5% to S$137.0 million. During the year, the Managers
converted some of the borrowings into longer tenor
fixed-rate loans in anticipation of further interest rate
rises. This exercise, coupled with additional borrowings
to fund its acquisition as well as the general rise in
floating rates, have led to incremental interest expenses.
Consequently, total distribution for FY 2015 registered
a 7.8% yoy decline to S$99.2 million. Total distribution
per Stapled Security for FY 2015 was 10.06 cents,
compared to 10.98 cents the year before.
MARKET REVIEW AND OUTLOOK
In 2015, the Singapore hospitality industry faced
headwinds caused by weak economic environment, as
well as increased room supply. This was exacerbated
by the relatively strong Singapore dollar, which had
affected key source markets around the region. As a
result, RevPAR for the Singapore Hotels decreased 6.9%
yoy in FY 2015 to S$175 despite occupancies recording
a commendable 87.7%.
In 2016, Singapore is expected to see a better events
calendar with new marquee events, prominent medical
congresses and the return of biennial citywide events.
Singapore has also been successful in attracting
big corporate incentive groups to the garden city.
Supporting the growth in tourism is an estimated
increase of 3,930 rooms in 2016. However, the outlook
for the global economy and Singapore hospitality
sector in 2016 remains uncertain. The slower economic
CHAIRMAN’S
STATEMENT
OVERVIEW AND FINANCIAL REVIEW
"...the long-term outlook for
Singapore tourism sector remains
positive, augmented by initiatives of
the Singapore government. These
include the continuing pipeline of
tourist attractions and ongoing
construction of Changi Airport’s
Terminal 4 which will serve to
entrench Singapore’s position as a
leading aviation hub in the region."
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