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CHAIRMAN’S STATEMENT
DELIVERING STABLE RETURNS
2016 was a year of challenging global economic conditions
and uncertainties which affected the trading environment of
some of the markets that we have a presence in, particularly
our core market, Singapore. Certain key industries in
Singapore such as Offshore & Marine, Shipping and
Finance witnessed a significant slowdown which affected
the hospitality industry. Major currencies also experienced
volatility, which were in part affected by the unexpected
result of the referendum for Britain’s withdrawal from the
European Union ("
Brexit
") in June 2016 as well as other
political events worldwide.
While headwinds were faced in some of our markets,
CDLHT’s portfolio has benefited from the diversification
of income through strategic acquisitions in key cities over
the years. These acquisitions have helped to mitigate the
decline in net property income ("
NPI
") from our Singapore
portfolio and our overseas contribution of portfolio NPI has
grown from 33.6% in FY 2015 to 38.5% in FY 2016.
NPI of CDLHT increased slightly by S$0.6 million in
FY 2016 to S$137.6 million despite challenging conditions.
This was supported by the contribution from the acquisition
of Hilton Cambridge City Centre, and strong NPI growth
from Grand Millennium Auckland as a result of higher
variable rental income driven by strong underlying hotel
performance. The higher rental income for this hotel was
also due to the rebranding and commencement of the new
lease in September 2016 which contains a more significant
variable rent component. There were also incremental
contributions from our only retail mall, Claymore Connect,
and the Japan Hotels. The increase in NPI helped to
On behalf of the Board of Directors of the H-REIT
Manager and the HBT Trustee-Manager (collectively the
"
Managers
"), I am pleased to present our annual report for
the financial year ended 31 December 2016 ("
FY 2016
").
MARKING 10 YEARS OF GROWTH
2016 marks a significant milestone for CDLHT as it
represents a meaningful and rewarding decade since
CDLHT was listed on the Singapore Exchange Securities
Trading Limited. CDLHT’s portfolio has delivered
commendable growth and the strategy pursued by us
has generated approximately 207.3%
(1)
in total return for
Stapled Security Holders who have invested in CDLHT
since its public listing on 19 July 2006.
H-REIT, which was the first hotel REIT to list in Singapore,
started with a portfolio of assets valued at S$846.3 million,
comprising four hotels with 1,915 rooms and a retail mall
adjoining Orchard Hotel, in Singapore. CDLHT has since
expanded to become one of Asia’s leading hospitality
trusts with quality assets valued at S$2.4 billion, comprising
15 hotels and 2 resorts with 4,912 rooms as well as a retail
mall. We have also geographically diversified our footprint
from a single country exposure to six countries, which has
strengthened our portfolio and earnings base.
We will build on our decade of success and strive to
continually create value and deliver sustainable returns for
Stapled Security Holders through strategically pursuing
hospitality assets with growth potential and engaging in
active asset enhancement to maximise the potential of our
investments.
OVERVIEW AND FINANCIAL REVIEW
(1)
Total return comprises capital appreciation and assumes the distributions paid out during the period from 19 July 2006 to 31 December 2016 are
reinvested in the Stapled Securities of CDLHT.
"2016 marks a significant
milestone for CDLHT as it
represents a meaningful
and rewarding decade
since CDLHT was listed on
the Singapore Exchange
Securities Trading Limited."
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