CDL Hospitality Trusts 1Q 2026 Operational Update: Key Investor Highlights

Overview

CDL Hospitality Trusts (“CDLHT”) delivered a robust performance in the first quarter of 2026, with both revenue and net property income (NPI) showing strong year-on-year growth. The group’s diversified portfolio benefitted from improved trading conditions across most geographies, despite ongoing global uncertainties and pockets of weakness in select markets.

Financial Performance

• Gross Revenue: Increased by 5.9% year-on-year to S\$67.1 million.
• Net Property Income (NPI): Rose by 10.4% year-on-year to S\$33.1 million.
• Balance Sheet: Debt value reduced to S\$1,170 million, with gearing improved to 35.3% (from 37.7% as at 31 December 2025). Weighted average cost of debt was lowered to 2.8% (from 3.0%).
• Interest Coverage Ratio: Improved to 2.4x.
• Perpetual Securities: CDLHT issued S\$100 million additional perpetual securities at 4.0% p.a. in February 2026, bringing total proceeds to S\$250 million, used to retire higher-cost borrowings and generating annualised net interest savings of S\$4.6 million and DPU accretion of 3.1% (pro forma FY2025).
• Cash Reserves: S\$78.5 million available, with S\$155.8 million revolving credit facilities and S\$400 million uncommitted bridge loan facilities.

Portfolio Highlights

Singapore Hotels

• RevPAR: Up 6.6% year-on-year (S\$184 vs S\$173).
• Average Occupancy: Improved to 80.4% (from 75.0%).
• NPI: Up 5.9% year-on-year.
• Strong performance driven by the Singapore Airshow 2026, robust MICE and corporate demand.
• Energy Tariffs: Fixed through 2026; lower rates secured for 2027-2031, providing margin protection.
• Renovation works completed at W Singapore – Sentosa Cove; upcoming renovations at M Hotel (415 rooms) and Copthorne King’s Hotel (167 rooms).
• Forward Purchase: Moxy Singapore Clarke Quay (475 keys) to be completed in 1H 2027, increasing Singapore portfolio room count by 18.6%.

Overseas Hotels

• New Zealand: Grand Millennium Auckland RevPAR up 16.3%; NPI up 46.1%. Boost from NZICC opening and post-renovation improvements.
• Australia: Perth Hotels RevPAR up 12.9%; NPI more than doubled to S\$1.6 million.
• Japan: RevPAR down 4.2% amid Japan-China tensions; NPI fell 10.3% (impacted by weaker yen).
• Maldives: RevPAR down 6.4%; NPI fell 26.3% due to fixed operating costs and flight suspensions related to Middle East conflict. Utility costs rising as fixed-price contracts unavailable.
• UK Hotels: Combined RevPAR up 5.4%; NPI down 13.6% due to higher payroll and business rates (partly one-off adjustments). Living assets (BTR and PBSA) delivered S\$1.1 million NPI uplift, offsetting hotel decline.
• Germany: Pullman Hotel Munich RevPAR up 5.1%; NPI up 24.5% (lower expenses, favourable currency translation).
• Italy: Hotel Cerretani Firenze RevPAR up 29.4% (post-refurbishment); NPI more than doubled.

Strategic and Operational Updates

• Singapore visitor arrivals for YTD March 2026 recovered to 94.5% of 2019 levels; STB expects 17.0-18.0 million arrivals in 2026 (above 2025’s 16.9 million).
• Major events (Singapore Airshow, BTS concert) expected to support hotel demand.
• Auckland’s NZICC and City Rail Link to drive medium-term demand; repositioning of Grand Millennium Auckland toward higher-rated segments underway.
• Perth market supported by favourable supply-demand dynamics and infrastructure investment.
• Japan hotels face softer outlook due to slower inbound arrivals (forecast 2.8% decline) and weaker Chinese tourist flow.
• Maldives outlook challenged by flight suspensions and higher resort supply.
• UK living assets stabilising, with regulatory changes (Renters’ Rights Act 2025) being proactively managed.
• Munich and Florence hotels benefit from high-profile events (concerts, Olympics); competitive trading conditions persist.
• Managers actively hedging currency risks and controlling expenses; committed to targeted asset enhancement initiatives for sustainable value creation.

Potential Price-Sensitive Developments

• Improved Financial Metrics: Reduction in debt cost and gearing, as well as increased fixed-rate debt proportion, enhances financial stability and DPU accretion – may positively impact share value.
• Asset Enhancements: Ongoing and planned refurbishments, plus the addition of Moxy Singapore Clarke Quay, could drive future earnings growth.
• Event-Driven Demand: Major MICE and entertainment events (e.g., Airshow, BTS concert) expected to boost Singapore hotel occupancy and rates.
• Macroeconomic Risks: Geopolitical uncertainties (Middle East conflict, Japan-China tensions) and inflationary pressures may weigh on short-term performance.
• Regulatory Changes: Renters’ Rights Act in UK BTR sector may affect lease duration visibility; management is taking steps to adapt.
• Interest Rate Movements: Lower benchmark rates expected to further reduce interest expense in FY 2026.
• Portfolio Expansion: Forward purchase of Singapore lifestyle hotel and stabilisation of UK living assets signal continued portfolio diversification and growth.

CDLHT Asset Portfolio

• 22 properties: 4,924 hotel rooms, 352 Build-to-Rent apartments, 404 Purpose-Built Student Accommodation beds, 1 retail mall.
• Singapore: 6 hotels + Claymore Connect mall.
• New Zealand: Grand Millennium Auckland.
• Australia: Mercure Perth, Ibis Perth.
• Japan: Hotel MyStays Asakusabashi, Hotel MyStays Kamata.
• Maldives: Angsana Velavaru, The Halcyon Private Isles Maldives.
• UK: Hotel Indigo Exeter, Hilton Cambridge City Centre, The Lowry Hotel, voco Manchester – City Centre; The Castings (BTR), Benson Yard (PBSA).
• Germany: Pullman Hotel Munich.
• Italy: Hotel Cerretani Firenze – MGallery.

Investor Takeaways

The 1Q 2026 update signals CDLHT’s resilience, proactive capital management, and commitment to asset enhancement. Key developments such as the reduced cost of debt, portfolio expansions, and event-driven demand in Singapore and Europe are likely to be positive for the share price. However, investors should remain vigilant regarding geopolitical risks, regulatory changes, and competitive market dynamics in select geographies.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult professional advisors before making investment decisions.

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