Bangkok--5 Mar--MT Multimedia
The Strategic Hospitality Extendable Freehold and Leasehold REIT (SHREIT) has posted impressive results both in terms of revenue and profit growth from its hotel portfolio of three high-value properties in Indonesia and Vietnam.
Listed on the Stock Exchange of Thailand (SET) since last December 27, SHREIT's portfolio comprises of the five-star Pullman Jakarta Central Park Hotel (317 rooms) in Indonesia plus the Capri by Fraser HCMC (four-star, 175 rooms) and the IBIS HCMC (three-star, 140 rooms) in Ho Chi Minh City of Vietnam.
All three hotel properties have recorded impressive growth in both revenue and net operating profit – thanks to strong growth in non-room revenue at the Jakarta hotel driven by significant increases in domestic weddings and MICE activities plus the robust Vietnamese economy which spurred high growth in trade fairs and events at the Saigon Exhibition and Convention Centre.
Gross hotel revenue at the Jakarta property rose 7.8% from 2016 to 222.74 billion IDR (508.91 million baht) in 2017 while hotel net operating profit rose a significant 19.9% over the same period to 95.20 billion IDR (218 million baht). In Vietnam, gross hotel revenue at the Capri by Fraser HCMC rose 8.1% from 2016 to 68.20 billion VND (94.48 million baht) in 2017 against a 2.1% rise in hotel net operating profit to 39.41 billion VND (54.59 million baht) over the same period while the IBIS HCMC posted 15.5% growth in gross hotel revenue to 40.58 billion VND (56.21 million baht) against 17.7% rise in hotel net operating profit to 18.21 billion VND (25.22 million baht) over the same 2016-2017 period.
According to Mr. James Lim, Executive Director of Strategic Property Investors (SPI), the REIT Manager, the portfolio has continued to build on the strong momentum from 2017 with all three properties achieving their best ever January trading month in January 2018.
"The organic hotel level metrics of the portfolio indicates continued upside momentum from higher occupancies and room pricing power at Capri and IBIS in HCMC while the more mature Pullman Central Park property in Jakarta is demonstrating steady room revenue coupled with double digit non-room revenue growth," Mr. James Lim said.
He added: "We believe the essential drivers of our portfolio are unique among the current REIT and Property Funds listed on the SET, with SHREIT providing investors with compelling diversification and resilience but at the same time, a yield plus growth exposure to younger and faster growing economies outside Thailand."
Meanwhile, SPI's Managing Director Mr. Patan Somburanasin has expressed confidence over SHREIT's growth prospects. "We are delighted to have listed SHREIT on the SET, which will provide Thai and international investors with exposure to fast-growing economies across ASEAN and providing unique diversification across multiple guest segments."
He said following the impressive growth in 2017, SPI continued to be very positive on Vietnam and Indonesia "where our portfolio is exposed to international leisure, domestic leisure, corporate, MICE and weddings which help provide growth with resilience."
With total assets of US$165 million as of the end of last year, SHREIT was established with the objective of being an active and independently managed REIT, focused on driving organic and acquisition growth with responsible capital management.
According to Mr. Patan, the key business development initiatives for 2018 include obtaining a corporate credit rating to diversify and/or lower debt funding sources and growing the existing portfolio via multiple accretive acquisitions.
He concluded: "While 2017 saw our landmark listing, 2018 is gearing up to be an extremely busy year as we continue to have access to a number of interesting acquisition opportunities in both our existing markets and potential new markets. We have strong support from our large institutional shareholders who are excited by our growth prospects and remain in regular dialogue with both the SET and SEC as we position SHREIT for near term acquisitions."