Business Magazine

Is 2018 The Year To Invest In Hospitality REITs?

Posted on the 01 March 2018 by Sgyounginvestment

The question is, on the back of all these positive sentiments, is there still opportunities to invest in the hospitality sector? I am always weary when we see a lot of good news for a particular sector because most of the time, the stocks would have already run up. This is the case for the hospitality sector currently where many brokerage houses and analyst are very bullish on this sector.

Yes, many stocks in the hospitality sector have already run up since last year. The stocks which are listed in Singapore and in the hospitality sector are as follow:

  1. Ascendas Hospitality Trust
  2. CDL Hospitality Trust
  3. Far East Hospitality Trust
  4. Frasers Hospitality Trust
  5. OUE Hospitality Trust

I have invested in all the above hospitality trust except for OUE Htrust which I am not vested in. I have recently bought into Frasers Htrust as it is at fair value with stable and relatively high DPU at about 6.4%. Its hotels are also located strategically around the world so I believe they will benefit from the improved tourism moving forward. In its latest 1Q FY18 financial results, Frasers Htrust reported higher revenue for all countries except for its UK hotels.

Is 2018 The Year To Invest In Hospitality REITs?


Another opportunity to invest in the hospitality sector is Far East Htrust. This is a stock I invested back in May last year at a lower price. But, at current price, I still believe it still has some good value for those who want to invest in it. They have recently acquired Oasia Hotel Downtown which is strategically located in the heart of CBD just beside Tanjong Pagar MRT. This would have boosted DPU by 4% for 9MFY2017 results on a pro forma basis. Oasia Hotel has good reviews on Tripadvisor as well as Booking.com and its a choice of stay for travellers coming to Singapore. We should expect RevPAR to improve with the addition of this new hotel into their portfolio for FY2018 when its approved by the shareholders in March 2018.

However, we have to note that their latest financial results didn't really show much improvements for their current portfolio. Their average occupancy for the hotel portfolio is only 85.4% and RevPAR declined 2.4% year on year to $132. For the serviced residences, average occupancy is only at 78.2% and RevPAU decreased 5.5% to $166. I do not know clearly if its occupancy or RevPAR will improve in 2018 even though the general sentiment is that hotels should do well in 2018 onwards.

Far East Htrust still gives good dividends at around 5.45% at the price of $0.715. It is trading at 0.8x PB which is still at a discount to its book value. All the other stocks in the hospitality sector are trading at much higher book value with CDL Htrust at 1.09x PB, Ascendas Htrust at 0.99x PB and OUE Htrust at 1.09x PB. If some of these hospitality stocks continue their decline due to the volatility of the market, I will consider accumulating some along the way.

or follow me on my Facebook page and get notified about new posts.


You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • Lipoprotein (a) Used to Be the Forgotten Lipid. Not Anymore.

    Lipoprotein Used Forgotten Lipid. Anymore.

    Lipoprotein (a) - or its abbreviation, Lp(a), pronounced "el-pee-little-a" - is emerging from obscurity. And for good reason. Among them, Bob Harper, the TV... Read more

    The 18 October 2018 by   Dietdoctor
    DIET & WEIGHT, HEALTH, HEALTHY LIVING, MEDICINE
  • How to Avoid an Identity Crisis.

    Avoid Identity Crisis.

    The secrets of a branding identity review - and when to ask for help. Quick quiz: Which of the following items are part of your company's brand identity? ... Read more

    The 18 October 2018 by   Marketingtango
    BUSINESS, MARKETING & ADVERTISING
  • Wake Up You Sleepy Head!!

    So how are your mornings?? Is your teen a member of the "I'm getting up!!! Leave me alone club!! Do you dread getting out of bed, knowing that your early mornin... Read more

    The 18 October 2018 by   Joanigeltman
    FAMILY, PARENTING
  • Rothy’s Shoes Review

    Rothy’s Shoes Review

    A year ago, I purchased my first pair of Rothy's flats. After giving them a real beating through the streets of New York, I wrote my first Rothy's flats... Read more

    The 18 October 2018 by   Wardrobeoxygen
    FASHION, SELF EXPRESSION, SHOPPING
  • This Week’s Meal Plan: Egg-free Meals!

    Our popular keto meal-plan tool gives you everything you need to succeed on a keto low-carb diet. Meal plans, recipes and shopping lists - no planning... Read more

    The 18 October 2018 by   Dietdoctor
    DIET & WEIGHT, HEALTH, HEALTHY LIVING, MEDICINE
  • ExWeb Interviews Controversial Mountaineer Denis Urubko

    ExWeb Interviews Controversial Mountaineer Denis Urubko

    If you're looking for some interesting reading today, check out Explorers Web's great interview with climber Denis Urubko, an extremely talented mountaineer... Read more

    The 18 October 2018 by   Kungfujedi
    OUTDOORS
  • AAU Acceptance And School Fees Registration Procedure – 2018/2019

    The Ambrose Alli University (AAU) Acceptance fee payment and registration procedure for newly admitted candidates in the 2018/2019 academic session have been... Read more

    The 18 October 2018 by   Naijapary
    SOCIETY, A-CLASSER

Magazine