Letter to Unitholders

On behalf of the Board of Directors of the H-REIT Manager and the HBT Trustee-Manager (collectively the "Managers"), I am pleased to present our annual report for the financial year ended 31 December 2023 ("FY 2023").


CDLHT's portfolio showcased a strong operating performance in FY 2023, buoyed by the gradual recovery of international tourism. While outbound travel from China has yet to fully rebound, international tourism witnessed significant improvement during the year, reaching 88% of pre-pandemic levels(1). Reflecting this positive trajectory, most of our portfolio markets experienced growth, with nearly all portfolio hotels reporting a yoy increase in Revenue Per Available Room ("RevPAR"). As a result, we recorded a noteworthy 11.8% yoy increase in net property income ("NPI") to S$138.3 million for the year, from S$123.7 million for FY 2022.

The stratospheric rise in interest rates detracted from the improved operating performance. As a result, total distributable income for FY 2023 amounted to S$71.0 million, representing a 1.8% yoy increase over FY 2022. Similarly, the distribution per stapled security grew 1.2% yoy to 5.70 cents for FY 2023.

As at 31 December 2023, the portfolio valuation increased by 8.1% (S$227.3 million) yoy to S$3.0 billion. On a same store basis (excluding the BTR under development in UK), the increase would have been 5.6% (S$155.6 million) yoy, primarily driven by the higher valuation of the Singapore portfolio.


The hospitality sector in Singapore demonstrated robust growth in the first nine months of 2023, building on the momentum from 2022. However, the fourth quarter experienced a decline due to the normalisation of pent-up demand, coupled with a rise in COVID cases in Singapore which impacted leisure demand.

Singapore received 13.6 million international visitor arrivals in 2023, in line with the Singapore Tourism Board's forecast. This represents 71.2% of the pre-pandemic 2019 figure while total visitor days recovered to 80.4% of 2019, supported by a longer average length of stay(2).

The expansion of Terminal 2 at Changi Airport, which was completed in November 2023, marks a significant milestone for Singapore's airport infrastructure. This expansion has increased the airport's operating capacity by five million, bringing the total operating capacity to 90 million passengers annually across its four terminals, ensuring that the airport is well-positioned to capture the anticipated growth in air travel in the coming years.

Notwithstanding some disruption at Grand Copthorne Waterfront Hotel and W Hotel due to asset enhancement works, the Singapore Hotels reported full year RevPAR growth of 19.0% yoy and an improvement of 17.8%(3) against pre-pandemic levels in FY 2019.

Looking ahead, Singapore's hospitality sector is expected to be supported by key demand drivers such as a healthy pipeline of MICE events and concerts, as well as continued recovery in outbound travel from China. Major events scheduled for 1H 2024 include the Singapore Airshow, FHA-Food & Beverage, Asia Tech x Singapore and the 2024 Rotary International Convention. These events, along with Singapore's robust line up of concerts, are expected to enhance the country's appeal as a tourism destination and attract travellers from neighbouring countries.

The mutual 30-day visa-waiver arrangement between Singapore and China, which commenced on 9 February 2024 will support the return of Chinese travellers. In the longer term, further enhancements to Singapore's infrastructure and tourist attractions will strengthen the country's value proposition and attract longer staying visitors. Overall, the prospects for Singapore's hospitality sector remain bright, and our Singapore Hotels are well-positioned to benefit from the positive momentum.

In New Zealand, Grand Millennium Auckland navigated a lengthy recovery gestation period following its exit from the government isolation program in June 2022. This was partly attributed to slow recovery of international and Trans-Tasman flight capacities. With most of the increase materialising towards the end of the year, the hotel achieved RevPAR growth of 7.2% yoy. Looking ahead, New Zealand's tourism sector should continue to recover in 2024, aided by Tourism New Zealand's efforts to focus on attracting high quality visitors who spend more, stay longer, visit multiple regions and travel throughout the year(4).

In Australia, our Perth Hotels achieved a RevPAR improvement of 29.3% yoy for FY 2023. The performance was driven by stronger first four months of 2023, as compared to the previous corresponding period when demand was impacted by border closures into Western Australia. For the year ahead, Western Australia's tourism recovery should continue to be supported by improving flight connectivity and various tourism initiatives.

As Chinese visitor arrivals to Australasia remains depressed, our hotels there should also see an improvement in performance when the Chinese travellers return to the region.

Japan has experienced robust inbound travel recovery over the course of 2023, with visitor arrivals reaching 14.4 million in 2H 2023, representing 94.1% of 2H 2019 levels(5). Although visitors from China, one of Japan's key source markets, have yet to recover, our Japan Hotels achieved a remarkable rate-driven RevPAR growth of 101.2% yoy and also 12.6% higher against FY 2019. The positive trends for Japan's tourism sector are likely to persist, supported by the country's surging popularity as a travel destination, as well as the weak yen.

Although the Maldives recorded an increase in visitor arrivals in 2023, RevPAR for our Maldives Resorts fell marginally by 2.7% yoy. The resorts' operating performance was affected by increased resort supply and the full reopening of alternative destinations such as Seychelles, Mauritius and Thailand. The operating performance of Raffles Maldives Meradhoo was also impacted by geopolitical issues which affected its luxury source markets such as Russia and Middle East. The resurgence of the Chinese market, which was the largest inbound source market in 2019 pre-pandemic, should provide some support to the overall demand.

In the UK, Hilton Cambridge City Centre and The Lowry Hotel achieved an 8.6% yoy RevPAR growth in FY 2023. Against FY 2019, RevPAR for these two hotels grew by 3.8% driven by a 15.0% increase in average rate. Both hotels achieved record RevPARs in FY 2023 since acquisition. The fixed rent for Hotel Brooklyn saw a 5.0% increase (annual inflation-linked adjustment) to £2.5 million (S$4.3 million) for the rental period of 7 May 2023 to 6 May 2024. Although the UK continues to face economic challenges, the overall tourism outlook remains positive with inbound visits for 2024 forecasted at 39.5 million, representing 97% of the 2019 level and 5% higher than in 2023(6).

In Munich, corporate travel demand had yet to recover to pre-pandemic levels, and 2023 saw a weaker event calendar compared to 2019. Nonetheless, Pullman Hotel Munich recorded a RevPAR growth of 14.0% yoy against FY 2022, when the hotel was still in the incipient stages of recovery.

Benefitting from strong inbound and domestic demand, Hotel Cerretani Firenze, achieved a stellar RevPAR growth of 46.6% yoy. Notably, full year average rate and RevPAR in FY 2023 reached a record high since acquisition of €297 and €223, exceeding FY 2019 by 53.0% and 41.3%, respectively.

Hotel demand in Munich and Florence will continue to be supported by a general recovery in travel and events. In Munich, major events on the calendar for 2024 include the European Football Championship, Oktoberfest and concerts. In Florence, the events calendar for 2024 promises a healthy line up of events and festivals. In particular, the 111th edition of the Tour de France will start from Florence on 29 June 2024, marking a historic first for the event with an Italian debut(7).

Looking ahead, the various geographical markets are expected to remain supported by their respective demand drivers. Geopolitical headwinds such as the ongoing Russia-Ukraine and Israel-Hamas wars could perpetuate uncertainty to global tourism. On a brighter note, the continued recovery in outbound Chinese travellers will bode well for international tourism and should contribute to the continued positive momentum for many of our portfolio markets.

Inflationary cost pressures and elevated funding costs could potentially weigh on bottom line performance. That said, interest rates have shown signs of peaking and CDLHT will benefit from interest rate declines which are widely expected to occur in 2024. To alleviate cost pressures, the Managers will continue to work with operators across the portfolio to seek operational synergies and protect margins.


In a high interest rate environment, 2023 proved to be a challenging year for acquisitions due to the negative spread between asset yields and funding costs in many markets. Hence, we continued to invest in our existing portfolio through strategic asset enhancement opportunities to fortify the competitive edge of our hotels.

In Singapore, asset enhancement initiatives have been completed across several hotels to strengthen our competitive positioning in the market. Grand Copthorne Waterfront Hotel completed the full renovation of all of its rooms and meeting spaces, solidifying its position as a leading conference hotel in Singapore for years to come. W Hotel also underwent a transformation of its lobby, restaurant and meeting facilities.

Grand Millennium Auckland also commenced refurbishment works in phases from 3Q 2023. Enhancement works on the all-day dining restaurant and the lobby lounge were completed during the year while the hotel's ballroom renovation was substantively completed in March 2024.

We continued to progress on our sustainability journey in FY 2023, having solidified our ESG framework and long term goal to achieve net zero emissions by 2050. Our sustainability reporting is in full compliance with SGX listing rules including alignment with Task Force on Climate-related Financial Disclosures ("TCFD") recommendations. The Managers are actively working towards alignment with new International Sustainability Standards Board ("ISSB") standards effective from FY 2025. Working with our operating partners, various initiatives have been implemented across the majority of our portfolio, such as the replacement of single use plastics as well as operational adjustments in housekeeping to reduce water and energy consumption. We have also completed Phase 1 of the solar panel installation at our Maldives Resorts, generating 413 MWh of solar power since commencement, avoiding 144,000 litres of diesel or equivalent to 327 tonnes of CO2. Notably, the group has transitioned approximately 86% of its maturing term loans and bank facilities into sustainability-linked term loans and revolving credit facilities, reinforcing our steadfast commitment to sustainable practices and responsible business operations. Finally, our Singapore portfolio is actively pursuing certification from the Global Sustainable Tourism Council, aligning with our strategic vision for sustainable growth and to support conscientious tourism practices.


In 2024, our Manchester residential Build-to-Rent project, The Castings, is anticipated to open around mid-year. The mobilisation of the property has been ongoing in preparation for the lease-up phase. The Castings is well-positioned to benefit from robust residential rental growth in Manchester, supported by the favourable demand and supply dynamics.

In 2026, we look forward to completing the forward purchase of Moxy Singapore Clarke Quay, a turnkey lifestyle hotel, which will add 475 keys to our portfolio. This will increase CDLHT's ownership of total Singapore hotel key count to 3,030 rooms on completion, strengthening our presence in our core market.


Maintaining a strong financial position remains a key priority for CDLHT. As at 31 December 2023, CDLHT has a robust balance sheet with a gearing ratio of 36.7%(8), and an ample debt headroom of S$835.0 million(9).

Approximately S$304.0 million sustainability-linked term loans and bank facilities were secured during the year. Of this amount, S$254.0 million was utilised to re-finance its maturing term loans and revolving credit facilities, with the remaining balance reserved for asset enhancement works and working capital needs. To hedge against interest rate volatility on some of its SGD borrowings, two interest rate swaps were entered during the year. Furthermore, a forward interest rate swap contracted in 2022 to manage interest costs from the progressive drawdown of the UK BTR development term loan facility became effective in the third quarter of 2023. These swaps helped to alleviate some of the interest rate volatility risks.

The healthy gearing level and a strong unencumbered position of 95.2% of property value well positions CDLHT with the financial flexibility to pursue suitable growth opportunities.


I extend my sincere appreciation to my fellow members of the Boards for their invaluable advice, and the management and staff of the Managers and the H-REIT Trustee for their dedication and invaluable contribution to CDLHT. On behalf of the Boards and management team, I would also like to take this opportunity to thank our lessees, hotel operators, business partners and service providers from around the world for their continued support to CDLHT.

Finally, I would also thank our Stapled Security Holders for the trust in and steadfast support for us. I look forward to meeting our Stapled Security Holders at our annual general meetings on 26 April 2024.

Chan Soon Hee, Eric
Dated as of 26 March 2024

  • (1) UNWTO, "International tourism to reach pre-pandemic levels in 2024", 19 January 2024
  • (2) Singapore Tourism Board ("STB")
  • (3) On a proforma basis for comparability, assuming CDLHT owns W Hotel from 1 January 2019
  • (4) Tourism New Zealand, "Strong off peak holiday arrivals support New Zealand economy", 17 November 2023
  • (5) Preliminary data by Japan National Tourism Organization
  • (6) VisitBritain, "2024 inbound tourism forecast", 20 December 2023
  • (7) The Straits Times, "`Dazzling' finish to new-look Tour de France route in 2024", 26 October 2023
  • (8) For the purposes of gearing computation, the total assets exclude the effect of FRS 116/SFRS(I) Leases (adopted wef 1 January 2019).
  • (9) Computed on basis of the regulatory gearing limit of 50.0%.