Singapore, 27 January 2025 – CDL Hospitality Trusts (“CDLHT”), comprising CDL Hospitality Real Estate Investment Trust (“H-REIT”) and CDL Hospitality Business Trust (“HBT”), has declared a distribution of 2.81 cents per stapled security for the period from 1 July 2024 to 31 December 2024. This announcement is expected to draw investor attention as it provides key details affecting shareholders’ entitlements and potential tax implications.

Key Details of the Distribution

• The total distribution of 2.81 cents per stapled security includes:
  • 2.43 cents from taxable income.
  • 0.38 cents as a capital component.
• No distribution is declared from HBT for the second half of 2024.
• Key dates for shareholders:
  • 6 February 2025, 5:00 p.m.: Closing of Transfer Books and Register of Stapled Security Holders to determine distribution eligibility.
  • 19 February 2025, 5:00 p.m.: Deadline for submission of tax declaration forms (Form A for holders and Form B for depository agents).
  • 28 February 2025: Payment of the distribution.
• Shareholders holding securities in Central Depository (Pte) Limited accounts as of 6 February 2025 will be eligible for payment.

Tax Implications and Requirements

Taxable income distributions will not have tax deducted at source for qualifying holders, including individuals, Singapore companies, and certain institutions. Other holders, such as foreign non-individual investors or funds, may qualify for a reduced 10% tax rate, provided they meet the criteria and submit the proper documentation. The reduced tax rate is set to expire after 31 December 2025 unless extended.

Holders are required to complete and submit the relevant forms to determine their tax treatment. Failure to submit these forms will result in tax being deducted at the prevailing corporate tax rate.

The capital component of the distribution is not subject to income tax, while the tax-exempt income component (if any) will also be exempt from tax.

Distribution Policy and Shareholder Takeaways

CDLHT maintains a distribution policy to pay out at least 90% of its taxable and tax-exempt income. Distributions occur semi-annually, with the amounts calculated as of 30 June and 31 December each year. This payout policy reflects the trust’s commitment to delivering consistent returns to shareholders.

Shareholders are urged to note the important deadlines and ensure compliance with tax declaration requirements to avoid unnecessary deductions.

Potential Market Impact

The announcement of a distribution, particularly with a breakdown of taxable and capital components, might have implications for CDLHT’s share price. Investors may view the transparency and steady payout as a sign of financial stability, potentially improving market confidence. However, changes in tax policies, looming expiration of the reduced tax rate for foreign investors, or any unforeseen economic shifts could affect shareholder sentiment.