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"Our geographically diversified portfolio of quality
assets is expected to continue to provide CDLHT with
the benefits of income diversification and generate
sustainable returns for our Stapled Security Holders."
OPTIMISING PORTFOLIO VALUE THROUGH
ASSET ENHANCEMENTS
The Managers are actively pursuing asset enhancement
initiatives for CDLHT’s portfolio and we believe that
the softer trading environment in some of our markets
presents opportunities to improve our assets’ value
and competitiveness, which allows CDLHT to capture
the medium and long-term growth potential of our
properties.
In 2016, Grand Copthorne Waterfront Hotel completed
its extensive renovation where its lobby was refreshed,
meeting room capacity was increased and its food and
beverage offerings were significantly augmented. At M
Hotel, the refurbishment of rooms was completed at
the end of 2016. At Claymore Connect, the tenant mix
was enhanced with new food and beverage offerings
with the introduction of PIM PAM by FOC and return of
Muddy Murphy’s Irish Pub in 2016. In 2017, there will be
further asset enhancement programmes to improve the
competitiveness of our Singapore Hotels in view of the
new products in the market place.
For CDLHT’s overseas assets, the Japan Hotels have
completedtheconversionof all 118smokingrooms tonon-
smoking rooms across both hotels as at January 2017, to
facilitate the growing demand from non-smoking guests.
In New Zealand, Grand Millennium Auckland’s lobby
refurbishment was completed in 2016 and some public
area enhancement works will be ongoing during 2017.
Over in Australia, Mercure Perth is expected to complete
its bar refurbishment to an Italian café in 2017. For Hilton
Cambridge City Centre, refurbishments which supported
the hotel’s ability to capitalise on the market buoyancy,
such as the entrance canopy replacement, addition
of a gym and the Executive Lounge, were completed
during 2016. The UK Hotel will continue to see ongoing
enhancements to the lobby and restaurant concept
in 2017.
CAPITAL MANAGEMENT
As at 31 December 2016, our balance sheet remained
robust with a gearing ratio of 36.8%. CDLHT has
maintained its rating of BBB- on the Fitch Issuer Default
Rating and has an interest cover of 6.2 times for FY 2016.
In August 2016, the Managers successfully refinanced the
bridge loan of £64.6 million relating to the acquisition of
the UK Hotel and a medium term note of S$83.6 million
into two 5-year floating rate term loans. Post-refinancing,
our overall debt maturity profile has been further
improved to 3.0 years with no borrowings maturing
in 2017 while our floating rate risk continues to be
well managed with 61.0% of our borrowings being fixed-
rate loans.
APPRECIATION
On behalf of the Board, I would like to thank Jimmy Chan,
Daniel Desbaillets and Ronald Issen, who have stepped
down from the Board during 2016, for their advice and
immeasurable contributions over the years. At the same
time, I would like to extend a warm welcome to Bill Foo
and Kenny Kim, who joined the Board on 11 May 2016
and 25 January 2017 respectively. To my fellow Board
members, management and staff of the Managers and
the H-REIT Trustee, I would like to express my sincere
gratitude for your tireless commitment to the business
over the years. I would also like take this opportunity to
thank our lessees, business partners and service providers
from around the world for your continued support to
the Group. Finally, I want to thank our Stapled Security
Holders for your steadfast support in the last decade.
It has truly been a fulfilling 10 years for CDLHT and we
will strive to continually capitalise on opportunities to
create value in the long run.
I look forward to meeting you at our annual general
meetings on 26 April 2017.
Wong Hong Ren
Chairman
9
Annual Report 2016
OVERVIEW AND
FINANCIAL REVIEW