The transaction would add 1% to JP Morgan’s forecast DPU for CICT. This is a bullish assumption as JP Morgan’s FY2025-2027 DPU estimates are 1-3% above the Street, “primarily because we see CICT as a prime beneficiary of a lower cost of debt” the July 1 report says.
Elsewhere, for hospitality trusts, the May RevPAR number was disappointing JP Morgan says, as it fell 0.8% y-o-y to $212.4 (131% of the 2019 average). May’s ADR fell 0.4% y-o-y to $269.9 while occupancy was down by 0.3 percentage points to 78.7%.
For the five months to end-May, RevPAR fell 2.9% y-o-y to $216.8. “This presents downside risks to the top line and potentially offsets the impact of lower borrowing costs from a drop in SORA,” for hospitality trusts, JP Morgan says.
JP Morgan retains neutral ratings on CapitaLand Ascott Trust and Far East Hospitality Trust owing to a flat DPU profile; and an underweight recommendation on CDL Hospitality Trusts due to supply headwinds in New Zealand and the Maldives.
