Ascott Residence Trust’s (ART) 3Q12 revenue increased by 6% YoY to S$77.4m, chiefly due to the contribution of Citadines Shinjuku and Citadines Kyoto, and better performance in the UK and China. Gross profit rose by 2% YoY to S$40.7m. 3Q12 DPU inched up 0.4% to 2.24 S cents. YTD 2012 DPU of 6.76 S cents is in-line with our expectations, forming 77% of our prior FY12 estimate of 8.8 S cents, which we now raise to 8.9 S cents. We find it encouraging that significant fractions of YTD apartment rental income are contributed by stays of <1 month and >12 months. This indicates that ART's properties are able to compete with hotels and apartments (excluding serviced residences). Updating our model, we raise our fair value from S$1.30 to S$1.37 and maintain our BUY rating on ART.
3Q12 results in-line
Ascott Residence Trust’s (ART) 3Q12 revenue increased by 6% YoY to S$77.4m, chiefly due to the contribution of Citadines Shinjuku and Citadines Kyoto, and better performance in the UK and China. Gross profit rose by 2% YoY to S$40.7m. 3Q12 DPU inched up 0.4% to 2.24 S cents. YTD 2012 DPU of 6.76 S cents is in-line with our expectations, forming 77% of our prior FY12 estimate of 8.8 S cents, which we now raise to 8.9 S cents. The portfolio will be enlarged by the acquisition of Madison Hamburg in 4Q12.
RevPAU inches up
Revenue per available unit (RevPAU) for the serviced residences (SRs) grew by 1% to S$148/day. In the UK, RevPAU grew by 9% YoY to S$228. The refurbished Citadines Prestige Trafalgar Square commanded higher rates. In China, RevPAU grew by 15% YoY to S$125, partly due to better demand for the refurbished apartments of Somerset Olympic Tower. There was weakness in France, Australia and Singapore. Revenue and gross profit in France fell 6% and 7% in S$ terms, however, in EUR terms, they had increased by 6% and 4% respectively. On a same-store basis, Australia saw RevPAU fall 2%. Singapore's RevPAU dropped 4% arising from the then-impending closure of Somerset Grand Cairnhill on 27 Sep. As of Jul 2012, Somerset Salcedo Property Makati was renamed Salcedo Residences after conversion from a master lease arrangement to a management contract.
Balanced profile for duration of stay
We find it encouraging that significant fractions of YTD apartment rental income are contributed by stays of one week or less (34%), <1 month (18%) and >12 months (15%). This indicates that ART's properties are able to compete with hotels, which are targeted at short-stay guests, and apartments (excluding SRs), which appeal to long-stay tenants. Average apartment rental income by length of stay is around four months.
Raise FV to S$1.37
We update our discount rate and capitalisation rate assumptions. Raising our fair value from S$1.30 to S$1.37, we maintain our BUY rating on ART.
Ascott Residence Trust’s (ART) 3Q12 revenue increased by 6% YoY to S$77.4m, chiefly due to the contribution of Citadines Shinjuku and Citadines Kyoto, and better performance in the UK and China. Gross profit rose by 2% YoY to S$40.7m. 3Q12 DPU inched up 0.4% to 2.24 S cents. YTD 2012 DPU of 6.76 S cents is in-line with our expectations, forming 77% of our prior FY12 estimate of 8.8 S cents, which we now raise to 8.9 S cents. The portfolio will be enlarged by the acquisition of Madison Hamburg in 4Q12.
RevPAU inches up
Revenue per available unit (RevPAU) for the serviced residences (SRs) grew by 1% to S$148/day. In the UK, RevPAU grew by 9% YoY to S$228. The refurbished Citadines Prestige Trafalgar Square commanded higher rates. In China, RevPAU grew by 15% YoY to S$125, partly due to better demand for the refurbished apartments of Somerset Olympic Tower. There was weakness in France, Australia and Singapore. Revenue and gross profit in France fell 6% and 7% in S$ terms, however, in EUR terms, they had increased by 6% and 4% respectively. On a same-store basis, Australia saw RevPAU fall 2%. Singapore's RevPAU dropped 4% arising from the then-impending closure of Somerset Grand Cairnhill on 27 Sep. As of Jul 2012, Somerset Salcedo Property Makati was renamed Salcedo Residences after conversion from a master lease arrangement to a management contract.
Balanced profile for duration of stay
We find it encouraging that significant fractions of YTD apartment rental income are contributed by stays of one week or less (34%), <1 month (18%) and >12 months (15%). This indicates that ART's properties are able to compete with hotels, which are targeted at short-stay guests, and apartments (excluding SRs), which appeal to long-stay tenants. Average apartment rental income by length of stay is around four months.
Raise FV to S$1.37
We update our discount rate and capitalisation rate assumptions. Raising our fair value from S$1.30 to S$1.37, we maintain our BUY rating on ART.
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