YTL Hospitality REIT was listed on 16 December 2015 under its former name, Starhill Real Estate Investment Trust. At that time, it had an initial portfolio of 3 properties valued at RM 1.15 billion.
In 2009, the trust has embarked on a rationalization exercise to reposition itself to become a pure-play hospitality REIT. Subsequently, it has enlarged its portfolio by disposing 2 retail properties and acquiring 12 hospitality based properties. As I write, YTL Hospitality REIT has a portfolio of 13 hospitality-based properties valued at RM 3.84 billion.
Here, I’ll share 9 quick facts that you need to know about YTL Hospitality REIT before you invest.
#1: Stock Symbol
Ticker Symbol: KLSE: YTLREIT / KLSE: 5109
Market Capitalization: RM 1.99 Billion (11 December 2017)
Share Price: RM 1.17 (11 December 2017)
Syariah Compliant: No
#2: The Business
YTL Hospitality REIT’s properties are located in 3 different countries. They are:
It has 9 properties in Malaysia namely, JW Marriott Hotel Kuala Lumpur, The Ritz Carlton Kuala Lumpur (Both Suite & Hotel Wing), Vistana Kuala Lumpur Titiwangsa, Vistana Penang Bukit Jambul, Pangkor Laut Resort, Tanjong Jara Resort, Vistana Kuantan City Centre, and Cameron Highlands Resort. Collectively, as at 30 September 2017, the 9 properties are valued at RM 1.66 billion, 43.2% of its net asset value. Presently, YTL Hospitality REIT derives fixed rental income from master lease agreements for these 9 properties. In 2017, they have contributed RM 100.99 in revenues to YTL Hospitality REIT.
YTL Hospitality REIT owns the Hilton Niseko Village which is situated at Hokkaido, Japan. As at 30 September 2017, the hotel is valued at RM 268.0 million, 7.0% of its net asset value. Presently, YTL Hospitality REIT derives fixed rental income from a master lease agreement with Niseko Village K.K. In 2017, Hilton Niseko Village has contributed RM 15.95 million in revenues to YTL Hospitality REIT.
It has 3 Marriott Hotels located in Sydney, Melbourne and Brisbane, Australia. Collectively, as at 30 September 2017, the 3 hotels are valued at RM 1.91 billion, 49.7% of its net asset value. YTL Hospitality Trust would derive variable income from these properties. In 2017, the 3 hotels have contributed RM 332.74 million in revenues to YTL Hospitality Trust.
#3: The Financials
YTL Hospitality REIT has recorded its full-year results after its rationalization exercise in 2014. Since then, it has maintained its revenues, total income distribution, and distribution per unit (DPU) over the last 4 years.
Source: Annual Report 2017 of YTL Hospitality REIT
Source: Annual Report 2017 of YTL Hospitality REIT
#4: Major Acquisition
On 26 May 2017, YTL Hospitality REIT has entered into a conditional sale and purchase agreement with YTL Majestic Hotel Sdn Bhd to acquire the Majestic Hotel Kuala Lumpur for RM 380 million. Upon this acquisition, the hotel would be leased back to YTL Majestic Hotel Sdn Bhd for a lease period of 15 years with an option granted to renew for a further term of 15 years. This lease agreement has a 5% step-up provision every 5 years.
#5: Lease Expiry
Except for the 3 Marriott Hotels in Australia, YTL Hospitality REIT would expect to enjoy long-term fixed stable income from master lease agreements from its properties in Malaysia and Japan.
|1||The Ritz Carlton (Suite Wing)||36,116||30/6/2031|
|2||JW Marriott Hotel Kuala Lumpur||31/12/2023|
|3||The Ritz Carlton (Hotel Wing)||19,917||14/11/2026|
|4||Pangkor Laut Resort||8,664||14/11/2026|
|5||Tanjong Jara Resort||7,220||14/11/2026|
|6||Cameron Highlands Resort||4,126||14/11/2026|
|7||Vistana Kuala Lumpur||8,457||14/11/2026|
|10||Hilton Niseko Village||15,954||21/12/2026|
As I write, YTL Hospitality REIT is trading at RM 1.17 a unit.
As at 30 September 2017, YTL Hospitality REIT has reported to have RM 1.47 in net asset value a unit. Thus, its current P/NAV works out to be 0.80.
YTL Hospitality REIT adopts a distribution policy to declare and pay out at least 90% of its distributable income on a quarterly basis. In 2017, it has paid out 8.08 sen in distribution per unit (DPU).
If YTL Hospitality REIT is able to maintain its DPU at 8.08 sen for the next 12 months, its gross dividend yield is expected to be 6.91%. For individual investors, it is prudent to deduct 10% withholding tax from 7.27 sen when calculating your net dividend yield, as such, I would expect net dividend yield to be 6.22%.
#7: Debt Profile
As at 30 September 2017, YTL Hospitality REIT has reported to have RM 1.41 billion in total borrowings. Its gearing ratio stood at 35.2% which is lower than its gearing policy where its total borrowings should not exceed 50% of its net asset value.
#8: Investor Relations
For further enquiries or to request for additional investment information on YTL Hospitality REIT’s Investors Relation matters, you may contact:
(603) 2142 6633
#9: Major Shareholders
As at 20 July 2017, the major shareholders of YTL Hospitality REIT are as followed:
- Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay: 64.79% (Deceased)
- Dato’ Hj Mohamed Zainal Abidin bin Hj Abdul Kadir: 5.20%
- Employees Provident Fund Board: 2.13%
- Great Eastern Life Assurance (Malaysia) Bhd: 2.93%
- AIA Bhd: 1.05%
Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, Dato’ Yeoh Seok Kian, and Dato’ Mark Yeoh Seok Kah are siblings and are appointed as members of the board of directors of YTL Hospitality REIT. They are the sons of Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay who has passed away on 18 November 2017.