CDL Hospitality Trusts (CDLHT) is looking for possible acquisitions in Japan, Vietnam and India with a potential fund of almost S$550 million ($403.8 million), said Vincent Yeo, CEO of CDLHT.
The company, which owns five hotels in Singapore, announced that hotel rates in the country could increase further, and income from its hotel chains could also increase due to existing corporate agreements renewed at higher rates.
“It’s got some more room to go, more upside. In terms of generic property prices, Singapore is certainly very much right up there and if you look at hotel as a property asset, it’s very much lagging behind,” he said in an interview with Reuters.
“We hope to acquire a couple of assets in the next 18 months.”
“Singapore is still our favourite market by far in terms of feasibility and prospects, but we can’t just confine ourselves to Singapore, so we are looking at other countries within Asia Pacific, for example, Vietnam, India and Japan,” he added, noting that the company was not looking for a possible acquisition in China.
“Most hotels in Chinese cities are doing very badly right now and there’s been severe over-building…Occupancies are low and rates have fallen as a result, but yet people are still building (hotels).”
CDL Hospitality, which owns several hotels in Singapore, Australia and New Zealand, is being managed by a unit of City Developments, Southeast Asia’s second largest property firm.
Mr. Yeo claimed that the average hotel occupancy rate in Singapore is expected to reach 90 percent to 95 percent in Q3. The company had an 88.5 percent occupancy rate in Q2, while data from STB indicated that hotels in Singapore had an average occupancy rate of 88 percent in June.