Most hospitality and lodging S-Reits post higher H2 revenue, payouts

[SINGAPORE] Hospitality and lodging real estate investment trusts in Singapore (S-Reits) have shown robust operating performance, with mostly stable to higher distributions in their latest earnings reports.

Across the five trusts that focus on hospitality and lodging assets, four have reported higher revenue and total distributions in the latest financial period ended December 2025. CapitaLand Ascott Trust (Clas) – which marks the 20-year anniversary of its Singapore Exchange (SGX) listing this month – saw revenue grow 4 per cent in the second half to S$439.1 million, while its distribution per stapled security (DPS) rose to S$0.0358 from S$0.0355.

The increase in distributions was driven by stronger operating performance, portfolio reconstitution and higher non-periodic items. Lui Chong Chee, chairman of the managers of Clas, noted in the January results announcement that since listing on SGX two decades ago, Clas has grown its distribution income at a compounded annual growth rate of about 12 per cent and delivered a total return of more than 250 per cent to stapled-security holders.

Clas managers are progressing towards its medium-term portfolio allocation of 25 to 30 per cent in the living sector, while maintaining the remainder in hospitality assets to further enhance the resilience of Clas’ portfolio.

Elsewhere, Far East Hospitality Trust (FEHT) reported a stronger second half, supported by improved performance at its commercial premises and contributions from its Japan hotel acquisition. Gross revenue rose 9 per cent on year, while core DPS excluding divestment gains rose 13.2 per cent to S$0.0180.

While softer corporate and leisure demand in the first half weighed on room rates, amid fewer large-scale events, operating conditions improved in the second half.

Meanwhile, CDL Hospitality Trusts reported 7.2 per cent year-on-year increase in gross revenue for the second half, supported by stronger contributions from the Singapore, Australia, New Zealand, Japan and UK portfolios. Interest expense for H2 2025 fell 14.6 per cent, driven by refinancing initiatives as well as the easing of interest rates. The lower interest expense and improved operating performance contributed to DPS rising 0.4 per cent on year in the second half.

Centurion Accommodation Reit (CAReit) – which listed on SGX in September 2025 – similarly delivered robust results for the financial period ended December, with revenue and DPU coming in above the initial public offering forecasts.

Revenue was 3.4 per cent higher at S$50.7 million, while its DPU of S$0.01739 was 6.7 per cent above forecast. The living sector Reit maintained near full occupancy across its worker accommodation and student housing portfolios.

CAReit’s manager said it is focused on driving organic value while leveraging its strong balance sheet to pursue accretive acquisitions. The Reit has an aggregate leverage of 30.7 per cent following the acquisition of Epiisod Macquarie Park, with debt headroom of S$348 million based on a 40 per cent leverage threshold.

Most of the hospitality S-Reits also highlighted the importance of capital management in their latest earnings. FEHT reported a lower weighted average cost of debt, and its manager noted that the trust is well positioned to pursue selective yield-accretive opportunities with its strong balance sheet and ample debt headroom. Gearing as at December 2025 stood at 33 per cent.

Similarly, Clas’ gearing decreased to 37.7 per cent, comfortably within regulatory limits, providing ample debt headroom for future opportunities.

While most of the hospitality S-Reits achieved growth in H2, Acrophyte Hospitality Trust’s revenue and distributable income slipped in FY2025, as operational performance was impacted by the continued disposition strategy of non-core assets and disruption from brand-mandated renovations at seven of its higher performing hotels.

However, its manager noted that continuously improving the overall quality of the portfolio is critical to preserving value and enhancing returns to stapled-security holders. Asset enhancement initiatives (AEIs) also featured across most portfolios as managers sought to drive future growth. While such works can temporarily disrupt earnings, managers viewed them as necessary investments to maintain competitiveness and protect long-term value.

Clas has also planned enhancements in key gateway cities such as London, Sydney and New York, while CAReit also continues to evaluate selective AEI opportunities across its student accommodation portfolio, including bed reconfiguration and refurbishment works.

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.