1、 Singapore Hospitality REITs Value creation and recovery in the making REITs | Initiation Figure 1: Stronger RevPAUs to drive dividends towards pre-pandemic levels * Benchmarked against 2019 dividends. RevPAU = Revenue per available unit. Source: Company data, Credit Suisse estimates Transformative
2、long-stay transition. Since the onset of the pandemic, hospitality REITs have embarked on a transformational pivot towards long-stay asset classes (e.g., student accommodation and rental housing). Historically, these assets have seen high through-cycle occupancies (90%) and sustained 1-2% p.a. renta
3、l growth, and a pivot would enhance the income resilience of the hospitality REITs to drive a positive rerating. ART is at the forefront of the transition, with 19% of valuations on long-stay assets, while it is only 4% for CDL HT. This can help to narrow ARTs fair dividend yields of 6.0% by 10-20 b
4、p to 5.8%, together with positive accretion from the portfolio reconstitution. Returning to the good old days in waves. We expect the global reopening to drive RevPAUs towards 100% of 2019 levels by 2024. ART is expected to recover faster in the near term, given higher exposure to fastest-improving
5、US/Europe (49% of CS 2022E gross profit (GP), with higher exposure to management contracts (71% of 2022E GP), while CDL HT is likely to recover relatively slower, given higher exposure to recently-opened Singapore (41% of CS 2022E GP) and master leases (73% of 2022E GP). We expect strong +16-45% YoY
6、 increase in GP in 2022-24, driven by RevPAU improvements and operating leverage. Focus on the recoverys frontrunner. We initiate coverage on ART with OUTPERFORM and a target price of S$1.35, implying 21% total returns. Hospitality REITs have started to rerate post recent reopening announcements on
7、recovery expectations; however, ART valuations remain attractive at FY24 yield of 6.5%, given that its attractive higher long-stay exposure is not yet priced in, while it will also likely offer higher growth potential through acquisitions, which can drive incremental dividends to bolster the recover
8、y. Despite CDL HTs similar FY24 yield of 6.4%, recovery expectations are largely priced in with less upside against our TP of S$1.44, while it has lower long-stay exposure and potential for acquisitions, hence our NEUTRAL rating. Key risks: A slower reopening; new virus variants; geopolitical tensio
9、ns; currency risks; and lower corporate travel. 40%57%69%85%99%55%47%58%75%96%0%40%80%120%2020A2021A2022E2023E2024EARTCDL HT5 May 2022 Equity Research Asia Pacific | Singapore DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSU
10、RE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should con
11、sider this report as only a single factor in making their investment decision. Research Analysts Terence Lee, CFA 65 6212 3011 terence.lee.2credit- Louis Chua, CFA 65 6212 5721 louis.chuacredit- Nicholas Teh 65 6212 3026 nicholas.tehcredit- 每日免费获取报告1、每日微信群内分享7+最新重磅报告；2、每日分享当日华尔街日报、金融时报；3、每周分享经济学人4、行
12、研报告均为公开版，权利归原作者所有，起点财经仅分发做内部学习。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。 5 May 2022 Singapore Hospitality REITs 2 Focus charts and tables Figure 6: Hospitality S-REIT comps more reasons to be positive about ART Note: Priced as at 4-May-2022. O = OUTPERFORM, N = NEUTRAL, NC = Not covered. Source: Refinitiv, IBES
13、 estimates for NC companies, Credit Suisse estimates for covered companies BBGMkt 6M ADTPriceTPUpsideTotalTickerHospitality REITsUS$mn US$mn RatingLC$LC$to TPreturnCY22CY23CY24CY22CY23CY24Singapore29.726.216.34.25.36.4ART SPAscott Residence Trust2,7534.9O1.161.3516.420.922.022.916.24.55.66.5CDREIT S
14、P CDL Hospitality Trust1,2051.7N1.351.446.710.522.729.827.83.95.06.4FEHT SPFar East Hospitality Trust9390.9NC0.66n.a.n.a.n.a.11.517.217.64.45.26.1FHT SPFrasers Hospitality Trust8980.6NC0.65n.a.n.a.n.a.81.940.5n.a.3.55.0n.a.Dividend yieldYoY DPS Chg. (%)Figure 2: Tighter dividend yields observed on J
15、-REITs with long-stay (residential, student housing) asset exposures Figure 3: ART has achieved meaningful 19% long-stay exposure, set to increase to 25-30% in the near term Source: IBES estimates, Credit Suisse estimates Source: Credit Suisse estimates Figure 4: ARTpoised to recover faster from str
16、onger RevPAU and operating leverage Figure 5: CDL HTlikely to recover slower, given higher SG exposure Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates Nomura (3462)Mori Hills (3234)NTT UD (8956)NIPPON (3296)HEIWA (8966)Advance Resi (3269)Nippon Accom (3226
17、)Kenedix Resi (3278)2.0%3.0%4.0%5.0%0%20%40%60%80%100%FY22 dividend yieldProportion of long-stay assets within portfolioShort-stayLong-stayShort-stayLong-stayPortfolio100.0%0.0%6.00%5.50%6.00%90%10.0%6.00%5.50%5.95%80%20.0%6.00%5.50%5.90%70%30.0%6.00%5.50%5.85%60%40.0%6.00%5.50%5.80%50%50.0%6.00%5.5
18、0%5.75%100.0%0.0%6.00%5.25%6.00%90%10.0%6.00%5.25%5.93%80%20.0%6.00%5.25%5.85%70%30.0%6.00%5.25%5.78%60%40.0%6.00%5.25%5.70%50%50.0%6.00%5.25%5.63%Proportion of portfolioImplied yieldsAssumes long-stay valued at 5.5% implied yieldAssumes long-stay valued at 5.0% implied yield52%56%76%88%103%44%51%74
19、%92%111%40%57%69%85%99%39%45%84%98%100%0%20%40%60%80%100%120%2020A2021A2022E2023E2024ERevenueNPIDPSDisclosed RevPAU60%80%92%111%128%49%61%70%91%113%55%47%58%75%96%44%45%55%79%103%0%20%40%60%80%100%120%140%2020A2021A2022E2023E2024ERevenueNPIDPSDisclosed RevPAU5 May 2022 Singapore Hospitality REITs 3
20、Value creation and recovery in the making Transformative long-stay transition Amid a nascent recovery in hospitality performance, hospitality REITs have expanded their investment mandate to include long-stay asset classes, such as rental housing/single or multifamily/co-living, senior housing and st
21、udent accommodation. Historically, these asset classes have seen high through-cycle occupancies (90%) and sustained 1-2% p.a. long-term rental growth, and a pivot would enhance the income resilience of hospitality REITs. Tailwinds facilitating the transition towards sunrise lodging asset classes inc
22、lude: (1) growing institutional interest within the long-stay asset class, which is expected to drive investment liquidity; with (2) manageable acquisition cap rates of 4-5% that can still offer room for dividend accretion, in lieu of growing competition for assets. We have observed that stable long
23、-stay class REITs listed in the US trade at tighter adjusted fund from operations (AFFO) yields of 5-6%, vs other hospitality REITs at 7-12%. Hence, a transformation towards stable income growth away from the more variable hospitality performance (ART and CDL HTs core dividend growth had ranged from
24、 -10% to +9% YoY in pre-Covid periods) should bode well for a rerating. ART is at the forefront of the transition, with 19% of valuations focussed on long-stay assets, while it is only 4% for CDL HT. We believe the pivot will likely entail divestments of existing hospitality assets to free up debt h
25、eadroom to acquire. So far ART has been divesting at significant premiums to book values (35%) at tight 2-5% 2019 yields, with hotel investment volumes expected to improve ahead. Returning to the good old days in waves The way forward will take place in waves and depend on which markets the REITs ar
26、e exposed to, and how fast each market recovers. By market, the recovery is likely to be driven by the US/Europe, where we have seen stronger travel patterns (40-60% of 2019 levels in late 2021) translating to stronger RevPAUs testament to the strong return of the willingness to travel, which is not
27、 expected to be derailed by higher cost of travel (fuel surcharge and virus testing, etc). Operationally, ART is expected to recover faster, given higher exposure to the fastest-improving US/Europe (49% of CS 2022E GP), with higher exposure to management contracts (71% of 2022E GP). CDL HTs primary
28、exposure to Singapore (41% of CS 2022E GP), where it also has a higher component of master leases (73% of CS 2022E GP), is expected to recover slower. This is in lieu of the governments 50% target and replacement of block-booking demand in 2021 with international travel, where we expect variable Sin
29、gapore income to start contributing meaningfully only from 2023 when RevPAUs surpass 70% of 2019 levels. More importantly, the recovery pace should pick up in 2023-24, with operating leverage, together with higher RevPAUs. Focus on the recoverys frontrunner We initiate coverage on ART with an OUTPER
30、FORM rating and target price of S$1.35, implying 21% total returns. Hospitality REITs have started to rerate post the recent reopening announcements on recovery expectations. However, ART valuations remain attractive at FY24 yield of 6.5%, given that its attractive higher long-stay exposure is not y
31、et priced in, while it will likely also offer higher growth potential through acquisitions, which can drive incremental dividends to bolster the recovery. Despite CDL HTs similar FY24 yield of 6.4%, recovery expectations are largely priced in with less upside against our TP of S$1.44, while it has l
32、ower long-stay exposure and potential for acquisitions, hence our NEUTRAL rating. Key risks: A slower reopening; new virus variants; geopolitical tensions; currency risks; and lower corporate travel. Long-stay class REITs listed in the US trade at tighter AFFO yields of 5-6%, vs other hospitality RE
33、ITs at 7-12%; a pivot from hospitality to long-stay bodes well for a rerating. ART is at the forefront of the transition with 19% of valuations focussed on long-stay assets, while it is only 4% for CDL HT. Recovery led by the US/Europe where we have seen stronger travel patterns: international trave
34、l his hit 40-60% of 2019 levels as of Jan-2022. ART expected to recover faster: US/Europe constitutes 49% of CS 2022E GP, management contracts make up 71% of 2022E GP. CDL HTs primary exposure to Singapore make up 41% of CS 2022E GP, with higher exposure to master leases where variable income on Sin
35、gapore hotels is not expected in 2022. 5 May 2022 Singapore Hospitality REITs 4 Valuation comparison Figure 7: Singapore REIT valuation comparison Priced as at 4-May-2022. O = OUTPERFORM, N = NEUTRAL, NC = Not-covered. Source: Refinitiv, IBES estimates for NC companies, Credit Suisse estimates for c
36、overed companies BloombergSingapore REITsRatingPriceTPUp/DnTotalMkt CapROE (%)P/BGearing 6M ADTTicker%return(S$ mn)CY21 CY22 CY23 CY24 CY21 CY22 CY23 CY24T+1(x)(%)S$mnRetail5.25.65.8n.a.5.21.03CICT SPCapitaland Integrated Commercial TrustO2.292.4261115,17219.512.95.31.24.55.15.45.55.41.1137.248.5MCT
37、 SPMapletree Commercial TrustN1.871.93386,2152.43.83.1n.a.5.05.25.3n.a.4.71.0934.130.8MAGIC SPMapletree North Asia CommercialNC1.20n.a.n.a.4,2473.65.62.12.45.55.96.06.15.30.9542.115.4FCT SPFrasers Centrepoint TrustO2.422.7514194,11821.04.33.1n.a.5.15.35.4n.a.5.11.0534.57.5LREIT SPLendlease ReitNC0.7
38、9n.a.n.a.n.a.1,768-81.76.56.0n.a.5.96.36.7n.a.4.40.9733.54.8SGREIT SPStarhill GlobalNC0.60n.a.n.a.1,34315.63.71.2-3.56.87.07.16.85.40.7536.11.5CLCT SPCapitaland China TrustNC1.17n.a.n.a.1,95635.99.22.14.17.48.18.38.65.30.7537.75.8SASSR SPSasseurNC0.83n.a.n.a.1,0149.22.84.16.68.68.89.29.87.00.9226.11
39、.9LMRT SPLippo-Malls Indo Retail TrustNC0.06n.a.n.a.446n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.0.5942.50.5Office5.15.55.5n.a.3.50.84SUN SPSuntec REITN1.811.69-7-15,19517.17.6-2.40.54.85.25.05.13.60.8643.716.7KREIT SPKeppel REITN1.181.256114,3921.63.90.82.34.95.15.25.33.40.8938.410.2OUECT SPOUE Commercia
40、lNC0.41n.a.n.a.2,2378.311.50.0-6.96.37.17.16.63.40.6738.70.8Commercial (US)8.99.39.59.68.70.86MUST SPManulife USO0.630.7417261,541-5.55.65.73.28.58.99.49.88.40.9442.82.2PRIME SPPrime USO0.730.9023331,185-2.34.3-0.10.89.39.79.79.88.10.8637.92.1KORE SPKeppel Pacific OakN0.730.788171,0481.82.50.60.58.7
41、9.09.09.110.20.8837.21.2UHU SPUnited Hampsire REITNC0.63n.a.n.a.48327.16.61.5-4.59.810.410.610.18.30.83n.a.0.3Office (Europe)7.67.67.77.86.30.99IREIT SPIREIT (in SGD)NC0.63n.a.n.a.728-18.42.20.0-6.47.37.57.57.03.01.1732.10.3CERT SPCromwell (in EUR)NC2.25n.a.n.a.1,841-2.90.61.24.67.67.67.78.06.30.893
42、5.11.2ELITE SPElite Commercial REITNC0.66n.a.n.a.54622.3-8.05.33.88.27.68.08.310.81.0842.40.4Industrial5.65.96.0n.a.9.21.21AREIT SPAscendas REITN2.823.0481411,8383.99.01.42.95.45.96.06.210.81.1835.932.3MLT SPMapletree Logistics TrustN1.751.887138,3703.34.10.4n.a.4.95.15.1n.a.6.01.2834.726.8MINT SPMa
43、pletree Industrial TrustN2.572.64386,8798.22.2-1.61.25.25.45.35.39.31.4339.918.3FLT SPFrasers Logistics & CommercialO1.431.6213195,2786.73.01.5n.a.5.45.65.7n.a.12.51.1534.311.4EREIT SPESR REITNC0.39n.a.n.a.2,5857.10.03.36.57.77.77.98.57.00.9840.03.3AIT SPAscendas India TrustNC1.24n.a.n.a.1,4352.112.
44、58.0n.a.6.97.88.4n.a.8.11.0535.03.1AAREIT SPAIMS AMP Capital Industrial REITNC1.40n.a.n.a.1,0032.85.32.8-0.36.77.17.37.28.91.0137.32.6ALLT SPARA LOGOSNC0.85n.a.n.a.1,235-5.720.00.0n.a.5.97.17.1n.a.9.31.2739.52.0SSREIT SPSabana REITNC0.45n.a.n.a.48710.7-3.20.0n.a.6.96.76.7n.a.6.50.8735.00.4ECWREIT SP
45、 EC World REITNC0.64n.a.n.a.51411.10.00.00.09.49.49.49.46.40.6838.20.4DHLT SPDaiwa House Logistics TrustNC0.84n.a.n.a.564n.a.85.70.0n.a.3.46.26.2n.a.4.90.9137.71.4Data Centre4.84.85.15.07.01.04KDCREIT SPKeppel DC REITN2.032.2812173,4867.42.11.3-0.54.95.05.05.08.21.5134.613.7DCREIT SPDigiCore REITNC1
46、.03n.a.n.a.n.a.1,606n.a.-2.114.9-3.74.74.65.25.04.3n.a.n.a.8.6Hospitality3.34.55.6n.a.1.80.95ART SPAscott ResidenceO1.161.3516213,80942.622.022.916.23.74.55.66.50.50.9737.16.7CDREIT SPCDL Hospitality TrustsN1.351.447111,667-13.722.729.827.83.23.95.06.43.11.0239.12.3FEHT SPFar East Hospitality TrustN
47、C0.66n.a.n.a.1,2998.311.517.217.64.04.45.26.14.20.8338.31.2FHT SPFrasers Hospitality TrustNC0.65n.a.n.a.1,242-72.181.940.5n.a.1.93.55.0n.a.2.20.9942.50.8ARAUS SPARA US Hospitality TrustNC0.51n.a.n.a.397n.m.400.020.0n.a.2.09.911.9n.a.1.00.7244.30.2Healthcare3.03.03.03.26.12.01PREIT SPPLife REITNC4.77
48、n.a.n.a.2,8862.20.71.44.93.03.03.03.26.12.0135.43.0FIRT SPFirst REITNC0.31n.a.n.a.635n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.0.8533.60.7Singapore REITS4.54.95.2n.a.Yield (%)YoY DPU Chg. (%)5 May 2022 Singapore Hospitality REITs 5 Table of Contents Focus charts and tables 2 Value creation and recovery in
49、 the making 3 Transformative long-stay transition . 3 Returning to the good old days in waves . 3 Focus on the recoverys frontrunner . 3 Valuation comparison 4 Transformative long-stay transition 6 A new dawn for hospitality REITs . 6 Underpinned by strong underlying structural forces . 6 Complement
50、ary sponsor portfolio and capabilities . 7 Acquisition headroom still a meaningful differentiator . 8 Lower cost of equity observed on long-stay assets . 9 Higher long-stay allocations to drive tighter yields . 10 Returning to the good old days in waves 14 Pandemic has significantly impacted revenue
