Ascott Residence Trust reports strong recovery
Ascott Residence Trust (ART) has achieved strong recovery with the highest quarterly increase in revenue per available unit (REVPAU) of 85% in 2Q 2022 since 2Q 2020. ART’s REVPAU jumped 91% to S$124 in 2Q 2022 compared to 2Q 2021. Its robust operating performance was due to higher average daily rate and average occupancy rate which grew from about 50% in 1Q 2022 to about 70% in 2Q 2022. ART’s properties in United States of America (USA), United Kingdom, Singapore and Australia registered the strongest quarter-on-quarter growth in REVPAU. In 1H 2022, REVPAU rose 60% to S$96 compared to the previous year.
ART has increased its distribution per Stapled Security (DPS) for 1H 2022 by 14% to 2.33 cents compared to 1H 2021. ART’s total distribution also grew 20% to S$76.7 million compared to 1H 2021. The total distribution for 1H 2022 included realised exchange gain arising from repayment of foreign currency bank loans. Excluding one-off items, ART’s adjusted DPS rose 120% year-on-year to 1.78 cents on stronger operating performance.
Revenue for 1H 2022 increased by 45% to S$267.4 million compared to 1H 2021. This was mainly attributed to higher revenue from ART’s existing portfolio, contributions from its expanded portfolio of longer-stay assets comprising student accommodation and rental housing properties, as well as from the newly opened lyf one-north Singapore. Gross profit for 1H 2022 also grew 44% to S$118.2 million compared to 1H 2021. On a same store basis, revenue and gross profit in 1H 2022 increased by 32% and 28% respectively compared to 1H 2021.
Mr Bob Tan, Chairman of Ascott Residence Trust Management Limited (ARTML) and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “As the global travel recovery continues, our serviced residences and hotels have contributed more growth income. This builds upon the steady income stream from our strong foundation of longer-stay assets. ART’s diversified and resilient portfolio remains poised for further growth. In addition, our robust financial position gives us the capacity to achieve our asset allocation target of 25-30% in longer-stay assets and 70-75% of our portfolio in serviced residences and hotels.”
Ms Serena Teo, Chief Executive Officer of ARTML and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “As Asia Pacific’s largest hospitality trust, ART is a key barometer of the sector’s performance. Our quality hospitality properties remain highly sought-after by corporate and leisure guests, and the pent-up demand has enabled ART to achieve our highest increase in REVPAU over the last quarter. We are seeing strong forward bookings at our properties and we expect this demand to sustain. With our geographically diverse network of serviced residences and hotels in key gateway cities and large domestic markets, ART has the agility to price our room rates dynamically to abate rising utility and labour costs, and better capture growth opportunities. As our properties cater mainly to long-stay guests, we have lower manning requirements and leaner cost structures. ART’s stable income base is expected to cushion the impact from recessionary concerns, rising inflation and macroeconomic uncertainties.”