In 1HFY2025, CDL Hospitality Trusts (CDLHT) reported distribution per stapled security (DPS) of 1.98 cents, down 21.1% y-o-y, and total distributions of $25.1 million after retention for working capital, down 20.2% y-o-y.
The decline was partly attributed to The Castings, where NPI during the ramp-up phase was insufficient to cover the associated interest costs. This, together with the decline in overall NPI and higher total interest costs contributed to the lower distribution and DPS. Annualised DPS yield based on CDLHT's July 29 closing is 4.66%.
For 1HFY2025, gross revenue declined by 1.8% y-o-y to $125.1 million as most portfolio markets performed softer, with the exception of the UK, Japan and Australia, which recorded revenue growth.
The UK portfolio’s NPI was supported by the inorganic contributions from The Castings, Benson Yard and Hotel Indigo Exeter.
Net property income (NPI) declined by 11.9% yoy to $58.6 million, with W Hotel accounting for $3.2 million of the $7.9 million net NPI decline due to ongoing room renovations.
Interest expense for 1HFY2025 rose 4.3% or $1.0 million y-o-y, mainly due to the addition of two new UK assets funded by borrowings, and the commencement of expensing borrowing costs (capitalised during the development stage) related to the UK build-to-rent (BTR) property following its completion in mid-2024.
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On a same-store basis, excluding The Castings, Benson Yard and Hotel Indigo Exeter, interest costs would have been 8.0% or $1.8 million lower y-o-y, reflecting the easing of floating interest rates in 1HFY2025.
Vincent Yeo, CEO of CDLHT’s managers, says: “The unstable global macroeconomic environment significantly impacted our portfolio performance for the first half. Corporate business was markedly more subdued, partially reflecting tariff uncertainties. In the meantime, our living sector assets continue to gain traction, with Benson Yard delivering strong performance and The Castings ramping up steadily towards stabilisation. While macroeconomic uncertainty persists, we believe our core Singapore portfolio is on better footing heading into the second half of 2025, and we remain disciplined in managing both operating and financing costs.
“Our current low fixed to floating debt profile combined with our interest rate hedging strategy, positions us to benefit from a potentially more favourable rate environment. At the same time, we are committed to long-term value creation through selective asset enhancements — including ongoing upgrades at Grand Millennium Auckland and W Hotel — while continuing to see positive results from completed initiatives such as those at Ibis Perth. Capital recycling remains an integral part of our strategy to unlock value and reinforce portfolio resilience.”
