Ascendas Hospitality Trust (Ascendas H-Trust) is a SGX-listed stapled group that invests in hospitality based real estate located across Asia. The trust was listed on 27 July 2012 with an initial portfolio of 7 properties valued at S$ 1.1 billion. Since then, the trust has enlarged its portfolio to 11 properties valued at S$ 1.6 billion as at 31 March 2017.
In this article, I’ll list down 10 things that you need to know about Ascendas H-Trust before you invest.
#1: Stock Symbol
Ticker Symbol: SGX: Q1P
Market Capitalization: S$ 992.2 Million (26 December 2017)
Share Price: S$ 0.88 (26 December 2017)
#2: The Business
Ascendas H-Trust derives income from hospitality based real estate located in:
Ascendas H-Trust has 6 properties in Australia namely:
- Pullman and Mercure Melbourne Albert Park
- Pullman and Mercure Brisbane King George Square
- Pullman Sydney Hyde Park
- Novotel Sydney Central
- Novotel Sydney Parramatta
- Courtyard by Marriott Sydney – North Park
Combined, they were valued at S$ 683.2 million as at 31 March 2017, accounting for 42% of the value of its portfolio. In 2017, this segment has contributed S$ 154.7 million and S$ 52.0 million in gross revenue and net property income to Ascendas H-Trust.
Ascendas H-Trust has 2 properties in Japan namely:
- Hotel Sunroute Ariake & Oakwood Apartments Ariake Tokyo
- Hotel Sunroute Osaka Namba
Combined, they were valued at S$ 512.1 million as at 31 March 2017, accounting for 32% of the value of its portfolio. In 2017, this segment has contributed S$ 35.6 million and S$ 26.0 million in gross revenue and net property income to Ascendas H-Trust.
Ascendas H-Trust has 2 properties in China namely:
- Novotel Beijing Sanyuan
- Ibis Beijing Sanyuan
Combined, they were valued at S$ 116.2 million as at 31 March 2017, accounting for 7% of the value of its portfolio. In 2017, this segment has contributed S$ 20.8 million and S$ 7.9 million in gross revenue and net property income to Ascendas H-Trust.
Ascendas H-Trust has one property in Singapore namely Park Hotel Clarke Quay. It was valued at S$ 312.0 million as at 31 March 2017, accounting for 19% of the value of its portfolio. In 2017, this property has contributed S$ 13.3 million and S$ 13.3 million in gross revenue and net property income to Ascendas H-Trust.
#3: The Financials
Since its IPO listing, Ascendas H-Trust has acquired the following properties in financial year 2013 and 2014.
Figures in S$ million
||Date of Purchase
||Ibis Beijing Sanyuan
||19 Dec 2012
||Park Hotel Clarke Quay
||28 Jun 2013
||Hotel Sunroute Osaka Namba
||15 Apr 2014
Ascendas H-Trust has reported substantial growth in revenues, net property income and distributable income from 2013 to 2014 due to contributions by these new properties. Since then, Ascendas H-Trust has maintained its gross revenue at S$ 210 – 230 million a year. Its net property income has gradually increased from S$ 83.5 million in 2014 to S$ 99.2 million in 2017. Meanwhile, its distributable income has grown from S$ 54.6 million to S$ 67.2 million in the 4-year period. Overall, distributions per unit (DPU) has grown from 4.31 cents in 2013 to 5.68 cents in 2017.
Source: Annual Reports of Ascendas H-Trust
Source: Annual Reports of Ascendas H-Trust
#4: Major Acquisitions
On 3 December 2015, Ascendas H-Trust has signed an agreement to acquire the serviced apartments component of the Aurora Melbourne Central for a sum of A$ 120 million from UEM Sunrise Bhd, one of the leading property development companies listed on Bursa Malaysia.
The construction of Aurora Melbourne Central has begun on 21 September 2015 and is expected to be completed by 2019. Upon completion, Ascendas H-Trust will add another 252 serviced apartments in its portfolio inventory.
In October 2016, Ascendas H-Trust has appointed ONYX Hospitality Group to be the operator of these serviced apartments. They will be operated under the ‘Shama Luxe’ brand and be named as ‘Shama Luxe Aurora Melbourne Central’.
#5: Sponsor Strength
Ascendas-Singbridge Group is the sponsor of Ascendas H-Trust. It is one of Asia’s leading urban and business space solutions provider with Assets under Management (AUM) exceeding S$ 20 billion. Ascendas-Singbridge Group is a 51:49 partnership between Temasek Holdings and JTC Corporation and is an experienced sponsor of S-REITs. Besides Ascendas H-Trust, it is also the sponsor of Ascendas REIT and Ascendas India Trust.
#6: Lease Profile
As at 31 March 2017, Ascendas H-Trust derives income from two key tenants. They are Sunroute Hotels Co Ltd and Park Hotel CQ Pte Ltd which made up 92.5% of gross rental revenue of the trust in 2017. As at 31 March 2017, 93.2% of its lease agreements would expire after 31 March 2022, thus, adding to the trust’s income visibility over the long-term.
As I write, Ascendas H-Trust is trading at S$ 0.88 a unit.
As at 30 September 2017, Ascendas H-Trust has reported to have S$ 0.89 in net asset value a unit. Thus, its current P/NAV works out to be 0.99.
Ascendas H-Trust adopts a distribution policy to declare and pay out at least 90% of its distributable income on a half-yearly basis. The trust has declared and paid 5.74 cents in DPU over the last 12 months. If Ascendas H-Trust is able to maintain its DPU at 5.74 cents over the next 12 months, its expected gross dividend yield is 6.52%.
#8: Debt Profile
As at 30 September 2017, Ascendas H-Trust has S$ 551.6 million in borrowings. Its gearing ratio is 32.6%. The effective interest rate is 2.9% a year and its weighted average debt maturity stands at 2.3 years.
#9: Investor Relations
For further enquiries or to request for additional investment information on Ascendas H-Trust’s Investors Relation matters, you may contact:
Chee Kum Tin
Capital Markets & Investor Relations
Telephone: +65 6508 4927
Ms. Susanna Lim San San
Chief Financial Officer
Telephone: +65 6508 8585
#10: Major Shareholders
As at 17 May 2017, the substantial shareholders of Ascendas H-Trust are:
– Ascendas Land International Pte Ltd: 27.38%
– Tang Gordon @ Tang Yigang: 7.72%
Temasek Holdings (Private) Limited (Temasek), Tembusu Capital Pte. Ltd., Bartley Investments Pte. Ltd., Mawson Peak Holdings Pte. Ltd., Glenville Investments Pte. Ltd., TJ Holdings (III) Pte. Ltd., Ascendas-Singbridge Pte. Ltd., JTC Corporation and Ascendas Pte Ltd are deemed to have an interest in the Stapled Securities held by Ascendas Land International Pte Ltd.
If you are just getting started in learning about investing in the Asian Stock Market, we have created a full 15-Video Course for you to help you get up to speed on how to look for great investments in Asia. Click here to find out more.