Singapore Hospitality REITS on Verge of Turnaround, DBS Says
Singapore Hospitality REITS on Verge of Turnaround, DBS Says
(Bloomberg) -- Singapore’s hospitality trusts may soon turn a corner thanks to a robust lineup of conferences in 2020.
That’s according to DBS Bank Ltd., which sees increasing demand for rooms driven by new meetings as well as returning events such as the Singapore Airshow in February 2020. The bank also expects the hotel industry to be supported by potential mergers and muted growth in supply.
“We believe that the sector is at the cusp of recovery,” analysts Derek Tan and Rachel Tan wrote in a note. For DBS, the top buy ideas on theme include Far East Hospitality Trust, which it upgraded to buy from hold, CDL Hospitality Trusts and Ascott Residence Trust.
| Meetings in 2020 | Date | Expected no. of attendees |
|---|---|---|
| Singapore Airshow | 1Q | 48,000 (2018 result) |
| Food & Hotel Asia | April | 78,000 |
International Trademark Association meeting | April | 11,000 |
Lions Clubs International Convention | mid-year | 20,000 |
Industrial Transformation Asia-Pacific | October | 18,000 |
| Gamescom Asia | October | 30,000 |
| Source: DBS Bank |
Far East Hospitality Trust rose 2.8% on Thursday to its highest since Feb. 2018. CDL Hospitality Trusts rose 0.6%, while Ascott Residence Trust fell 1.4%.
“We believe that downside from current levels is limited,” as hospitality real estate investment trusts are trading in line with historical mean valuations, the note added.
To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie
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