[SINGAPORE] CapitaLand Ascott Trust’s (Clas) managers said in a business update on Monday (Apr 28) that the trust’s gross profit rose 4 per cent year on year in the first quarter of 2025.
Gross profit from new properties in the quarter replaced the drop in gross profit from divestments in 2024, the managers said, driven by stronger performance from properties the trust renovated in 2024. These new properties include lyf Funan Singapore, acquired on Dec 31, 2024, as well as Japan hotels ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae, both bought on Jan 31, 2025.
Seventy per cent of profits in the quarter were from stable income sources, the managers said, with the remaining 30 per cent from growth income sources. Such stable income sources included management contracts of longer-stay properties such as rental housing and student accommodation, as well as master leases and management contracts with minimum guaranteed income. Growth income was largely contributed by management contracts of hospitality properties.
Excluding acquisitions and divestments, Clas’s gross profit was 1 per cent higher on a same-store basis, said the managers.
In most key markets in the trust’s portfolio, revenue per available unit (RevPAU) for Q1 2025 grew year on year, with its Australia, Singapore, United Kingdom and United States (US) portfolios registering growth of between one and 12 per cent. Its Japan portfolio, however, registered an 11 per cent contraction on the year.
In the US portfolio, making up 19 per cent of the trust’s total assets, hotel RevPAU in the quarter climbed 11 per cent on the year to reach US$160, driven by strong leisure demand, an increased proportion of corporate bookings, as well as long weekends and major conventions.
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While negative sentiments towards the US might dampen international leisure travel, the managers said that a higher proportion of domestic guests would mean the trust’s hotels remain less affected.
The trust’s Singapore portfolio, which made up a further 19 per cent of total assets, saw serviced residences (SRs) and hotel RevPAU in the quarter inch upwards by 1 per cent year on year to S$183. On a same-store basis, however, RevPAU fell 3 per cent year on year.
This fall was due to fewer high-profile concerts, such as the one by Taylor Swift, or biennial events, such as the Singapore Airshow, under the meetings, incentives, conferences and exhibitions category that took place in Q1 2024, Clas’s managers said.
The portfolio’s performance was nevertheless mitigated by stronger operating performance from The Robertson House by The Crest Collection and long stays at SRs.
The managers expect that demand for corporate and relocation stays for the Singapore portfolio will be subdued in the second quarter of 2025, while transient demand could see an uplift during concert and event periods.
In Japan, the trust’s managers noted that the acquisition of two Japan hotels, ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae, would fully replace the income of four divested properties in the Japanese portfolio. The acquisitions would bring an accretive growth of 1.6 per cent to dividend per share on a pro forma basis from FY 2024, while raising blended net operating income by 4.3 per cent.
The managers noted that these hotels would be supported by leisure and business demand drivers, with ibis Styles Ginza Tokyo located in Tokyo’s shopping and entertainment district, while Chisun Budget Kanazawa Ekimae is situated in a popular site for domestic travel.
The trust reported a gearing ratio of 39.9 per cent, with an interest coverage ratio of 3.2 times. The trust said it is monitoring recent volatility and reviewing options for its S$250 million perpetual securities, which reset on June 30, 2025, with a view towards managing its capital structure.
Recent macroeconomic uncertainties are likely to impact Clas through raised costs, lower lodging demand and volatility in interest rates and foreign currencies, the managers said.
Even so, the trust’s diversified portfolio and its stable income sources, which comprise 60 to 70 per cent of gross profit, could mitigate this effect, Clas’s managers said.
Net asset value per stapled security was at S$1.11, with total available funds standing at around S$1.43 billion, said the managers.
The counter fell 1.2 per cent or S$0.01 on Monday following the announcement, reaching S$0.845 at 10 am.
