Saturday 10 March 2018

Ascendas Hospitality Trust


Ascendas Hospitality Trust caught my eyes for a long time as I like to own hotels in Japan to tap on Japan’s growing tourism. Especially so when they recently sold their 2 hotels in china.

Ascendas Hospitality Trust (AHT) is a hospitality Reit comprises of 11 9+1 hotels in Asia Pacific in Singapore, Australia, China and Japan. On November 2017, AHT announced an expansion of markets beyond Asia Pacific for potential investment. A quick look at the important metrics of AHT.


Ticker Code: Q1P
Sponsor: Ascendas-Singbridge Group. Jointly owned by Temasek and JTC.
NAV per share: 0.86 as at Dec 31 2017
Estimated NAV per share after china Divestment : 0.96 (Adjusted)
Gearing: 33.2%
Estimated gearing after repayment estimate to be: 23.6%
Price: 0.845 (09/03/2018)
PB after Divestment: 0.88







 Properties
Hotel Sunroute Osaka Namba
Australia
Japan
Singapore
China (DIVESTED)
Pullman Sydney Hyde Park
Hotel Sunroute Ariake and Oakwood Apartments Ariake Tokyo
Park Hotel Clarke Quay
Novotel Beijing Sanyuan
Novotel Sydney Central
Hotel Sunroute Osaka Namba

Ibis Beijing Sanyuan
Novotel Sydney Parramatta



Courtyard by Marriott Sydney-North Ryde



Pullman and Mercure Melbourne Albert Park



Pullman and Mercure Brisbane King George Square



Shama Luxe Aurora Melbourne Central
(2H 2019)




                                                                                   
AHT announced on Jan 29 2018, that they will be selling their 2 hotels in china at 178% profit! 1156 million RMB is about S$240 million. Proceeds will used to repay debts, distribution and acquisitions.
Divestment of China Properties
                     

Performance

NAV has been growing with a CAGR of 9%. Net property income and DPS has been growing steadily. Future acquisition with cash from the divestment and a new service apartment to be completed in 2H2019 provide a good growth story.




If you take a look at other hospitality Reits such as FHT, CDLHT, FEHT and OUEHT, their DPU is dropping for years and are trading at near or above NAV. Do note that OUEHT has been receiving income support till 2017, not sure about the others. AHT is the only one with growing DPU.

Price Base on 10/3/2018

AHT
CDLHT
FHT
FEHT
OUEHT
2013
7.53%
6.57%

8.83%

2014
6.3%
6.43%

7.38%
9.14%
2015
6.17%
6.21%
12.47%
6.59%
7.71%
2016
6.43%
5.85%
6.95%
6.13%
5.76%
2017
6.79%
5.74%
6.5%
5.66%
6.08%


DEBT                                        
 
Most debt is on fixed interest rate. Gearing will drop to 26.3% at an assumption of paying off S$160 million in debt.  Proceeds from  divestment should worth S$235.9 million, S$218.7 after fees. This give AHT headroom to take on more debt for future acquisitions. This leave us with S$58.7 million for a possible distribution of approximately special dividend of 0.05. However, most likely AHT will top up the shortfall of DPU from the absent of the China Properties.



Conclusion
At price to book of 0.88 after divestment on 31 March 2018, this Reit is fairly cheap in comparison of its performance against other hospitality Reits. Growth story of future acquisition from divestment proceed and its 9th property to be complete in 2H2019. Possible estimated special dividend of 0.05.

Vested at 0.869.

3 comments:

  1. Thanks for sharing an information to us. If someone want to know about Service Apartments
    I think this is the right place for you!
    service apartments in coimbatore for monthly rental
    service apartments in coimbatore for rent

    ReplyDelete
  2. It was a very good post indeed. I thoroughly enjoyed reading it in my lunch time. Will surely come and visit this blog more often. Thanks for sharing.CG Infra is one of the reputed Construction Company in Coimbatore. CG Infra has created over the years its expertise in property development.

    ReplyDelete
  3. Globuse Flowerdale is one of the best and ultra luxury villas in coimbatore .Explore the best gated community plots for sale in Coimbatore. Get access to exclusive amenities, prime locations, and unbeatable prices with our team of experienced real estate agents.

    ReplyDelete

Powered by Blogger.