REIT Watch - Mixed 1H 2025 performance, but Hospitality S-REITs push ahead with portfolio reconstitution and diversification

5 Hospitality Trusts listed in SingaporeTrust NameStock CodeMarket Cap (S$B)Dividend Yield %P/B Ratio %CapitaLand Ascott TrustHMN3.426.810.73Frasers Hospitality TrustACV1.353.131.09Far East Hospitality TrustQ5T1.216.730.66CDL Hospitality TrustsJ851.016.650.56Acrophyte Hospitality TrustXZL0.225.510.40Source: SGX Stock Screener, Morningstar (Data as of 31 Jul 2025). List of 5 actively traded Hospitality Trusts. Three out of five Singapore-listed Hospitality Trusts have reported half-yearly financial results for the first half of 2025 over the past week, with two more due to report this week.CapitaLand Ascott Trust (CLAS) reported a resilient performance in 1H 2025, with revenue rising 3 per cent year-on-year to S$398.5 million and gross profit up 6 per cent to S$182.5 million, driven by stronger operating performance, portfolio reconstitution, and asset enhancement initiatives (AEIs). Core distribution in 1H 2025 rose 1 per cent to S$91.6 million, although distribution per stapled security (DPS) dipped slightly to 2.53 cents.CLAS benefited from stable income streams, with 66 per cent of gross profit derived from master leases and living sector assets. Notably, most of its key markets Australia, Japan, UK and USA registered RevPAU growth year-on-year, while Singapore experienced a slight decline due to increased competition and the absence of major events.CLAS continued its proactive portfolio reconstitution strategy in 1H 2025, aimed at enhancing long-term value and income stability. Since 2024 to-date, the trust completed over S$500 million in divestments at up to 55 per cent premium to book value, and redeployed into accretive acquisitions totalling S$530 million in assets in Japan and USA and lyf Funan Singapore. Three more AEIs are planned through 2026, and redevelopment of the Somerset Clarke Quay serviced residence is underway with completion expected in 2026.Far East Hospitality Trust (FEHT) faced headwinds in 1H 2025, with gross revenue declining 4.2 per cent year-on-year to S$51.6 million and net property income (NPI) falling 7.7 per cent to S$45.6 million. The decline was mainly due to softer performance from Singapore hotels and serviced residences, partially offset by contributions from commercial premises and the newly acquired Four Points by Sheraton Nagoya in Japan.Distribution to stapled securityholders decreased 8.7 per cent to S$36.0 million, translating to a DPS of 1.78 cents. Despite the earnings decline, FEHT maintained a strong balance sheet with aggregate leverage at 32.8 per cent, interest coverage ratio at 3.1 times, and average cost of debt at 3.4 per cent.The trust’s portfolio remained anchored in Singapore, with Japan contributing to income diversification. Gerald Lee, chief executive officer of the REIT Manager said: “After a slow start in the first half of the year amid macroeconomic headwinds and cautious corporate sentiments, demand has started to trend more positively.”CDL Hospitality Trusts (CDLHT) experienced a softer first-half, with NPI falling 11.9 per cent year-on-year to S$58.6 million and total distribution after retention declining 20.2 per cent to S$25.1 million, or DPS of 1.98 cents.The decline was attributed to softer performance in most markets, except for Japan, UK and Australia, as well as higher interest costs. Singapore RevPAR fell 14.2 per cent due to the absence of large-scale events and ongoing renovations at W Hotel.However, CDLHT saw positive contributions from its UK portfolio, particularly from new acquisitions like Hotel Indigo Exeter and living assets Benson Yard and The Castings. Japan also performed well, with RevPAR up 13.7 per cent and NPI rising 11.4 per cent.Frasers Hospitality Trust will be reporting business updates for the third quarter period on August 4, while Acrophyte Hospitality Trust will be reporting financial results for the first half of 2025 on August 6. For more research and information on Singapore’s REIT sector, visit sgx.com/research-education/sectors for the SREITs & Property Trusts Chartbook.REIT Watch is a regular column on The Business Times, read the original version.Enjoying this read?Subscribe now to our SGX My Gateway newsletter for a compilation of latest market news, sector performances, new product release updates, and research reports on SGX-listed companies.Stay up-to-date with our SGX Invest Telegram and WhatsApp channels.