Ascott Trust Hikes 2023 Distribution by 16%!

CapitaLand Ascott Trust (CLAS) has increased its distribution per Stapled Security (DPS) for FY 2023 by 16% year-on-year (y-o-y) to 6.57 cents.  Despite the pandemic, its DPS has increased every year since FY 2020.  Excluding one-off items, adjusted DPS for FY 2023 rose 14% y-o-y to 5.44 cents.  Total distribution for FY 2023 rose 25% y-o-y to S$237.0 million.  The rise was due to stronger operating performance and contributions from 18 new acquisitions.  DPS for 2H 2023 was up 14% y-o-y to 3.80 cents and CLAS’ total distribution for 2H 2023 grew 24% y-o-y to S$140.8 million.

CLAS’ properties saw strong demand as international travel continued to recover.  CLAS’ revenue per available unit (REVPAU) in 2H 2023 reached 103% of pre-pandemic levels in 2H 2019 on a pro forma basis, increasing by 10% y-o-y to S$157. REVPAU also rose 23% y-o-y to S$148 for FY 2023.  In 4Q 2023, majority of CLAS’ key markets such as China, Japan, United States of America (USA) and Vietnam also registered y-o-y REVPAU growth.

CLAS’ gross profit for 2H 2023 rose 12% y-o-y to S$183.9 million compared to 2H 2022.  This is 106% of pre-pandemic levels.  Revenue for 2H 2023 also increased by 12% to S$397.6 million compared to 2H 2022.  This was mainly attributed to higher revenue received from CLAS’ existing portfolio and contributions from its new acquisitions.  On a same-store basis excluding the new acquisitions, gross profit and revenue increased by 5% and 8% respectively compared to 2H 2022.  In 2H 2023, stable income sources contributed about 54% of CLAS’ gross profit, while the remaining 46% was generated from growth income sources.

CLAS achieved a fair value gain of S$156 million, about 2% increase in portfolio valuation due to stronger operating performance and outlook for its portfolio despite higher capitalisation rates and discount rates.  Markets with valuation gains include Australia, Europe, Japan, Singapore and United Kingdom.

Mr Bob Tan, Chairman of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management Pte. Ltd. (the Managers of CLAS), said: “CLAS continued to deliver strong performance.  Our balanced portfolio of stable and growth income streams enables CLAS to capture growth opportunities while remaining resilient amidst uncertainties.  As part of CLAS’ active portfolio reconstitution strategy, we completed 18 yield-accretive acquisitions in the past two years, boosting CLAS’ income.  In the last seven months, we also announced the divestment of nine mature properties at a premium to book value.  Our strengthened financial position will enable us to redeploy capital towards more optimal uses such as investments into higher-yielding assets, funding our asset enhancement initiatives (AEI) or paring down debt.  We remain committed to delivering sustainable returns to Stapled Securityholders.”

Ms Serena Teo, Chief Executive Officer of the Managers of CLAS, said: “Through our active portfolio reconstitution and AEI, we are enhancing the quality of our portfolio to create further value for Stapled Securityholders.  We have eight properties undergoing or will undergo AEI.  The AEI is expected to uplift the value of the properties post completion.  Looking ahead, the diversification of CLAS’ portfolio across geographies, lodging asset classes and contract types will continue to provide income stability.”

1. Excluding one-off items comprising realised exchange gain in FY 2022 and FY 2023.
2. Revenue per available unit of properties excludes master leases, rental housing and student accommodation.
3. The combination with Ascendas Hospitality Trust (A-HTRUST) was completed on 31 Dec 2019 and the 2019 pro forma figures include the performance of the A-HTRUST portfolio
4. The n^ine properties comprise four properties in regional France, two properties in Australia ^and three properties in Japan.
5. ^{The exit yield of the France and Australia properties is computed based on FY 2022 Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA). The exit yield of the Japan portfolio is not meaningful and has not been included in the average exit yield computation as the properties were largely closed in 2022. If included, the average exit yield will be about 2.6%.}
6.     ^{The Cavendish London, Temple Bar Hotel in Dublin and Ascott Kuningan Jakarta.}
7. Excluding the Milestone Payments which are to be made only when 70% of the renovations of The Cavendish London and Temple Bar Hotel are completed. Including the Milestone Payments, the EBITDA yield is 5.1% on a FY 2022 pro forma basis.
8. The seven properties are Citadines Holborn-Covent Garden London, Citadines Les Halles Paris, Citadines Kurfürstendamm Berlin, La Clef Tour Eiffel Paris, Temple Bar Hotel, The Cavendish London ^and Novotel Sydney Central^.