Singapore firm CDL Hospitality Trusts mulling acquisitions in India amongst other Asian nations, reports

In an interview with Reuters Monday, Singapore’s CDL Hospitality Trusts chief executive officer said the firm was considering acquisition investments in India, Vietnam and Japan. In that regard, the firm’s chief said CDL Trusts had a war chest of around 550 million Singapore Dollars for undertaking the investments.

CDL Hospitality Trusts controls about five hotels in Singapore. Further to that, the chief executive reiterated that the firm was also keen on using the interest it earns form its hotel rates that are expected to go up as current business deals are renewed at higher rates. Vincent Yeo, CDL Hospitality Trusts chief executive, added that the firm was keen on acquiring some assets over a period of the coming 18 months.

Yeo said that, whereas Singapore would remain the firm’s core market with regard to feasibility and prospects, CDL Hospitality Trusts will seek expansion overseas and not restrict itself to the Singaporean market. The expansion drive will however target Asia Pacific states such as India, Japan and Vietnam particularly.

Further to that, the chief executive said the company was capable of raising its gearing to about 40%, from its existing debt to asset ratio of 18.6%. As such, if CDL assumes an internal gearing restriction of about 40%, that would give it an acquisition capacity of 550 million Singapore dollars, he added. Currently, the Singaporean realty major controls assets in New Zealand, Singapore and Australia.

The properties are managed by a unit of City Developments, Singapore’s biggest property company after CapitaLand. City Developments is also Southeast Asia’s second largest property firm after CapitaLand. Commenting over CDL Hospitality’s Singapore business, Yeo said he expects the average hotel occupancy rate in the country to vary stand at about 90% to 95% in the third quarter of 2010.

CDL Hospitality Real Estate Investment Trust is managed by M&C REIT Management Limited, an indirect wholly owned subsidiary of Millennium & Copthorne Hotels plc. M&C REIT Management Limited is responsible for the overall management and administration of the assets of CDL Hospitality Real Estate Investment Trust and for originating new acquisitions.

M&C REIT Management Limited works closely with the master lessees of the hotels and the hotel managers to implement CDL Hospitality Real Estate Investment Trust’s asset enhancement plans. M&C REIT Management Limited also works closely with and leverages the strengths of both Millennium & Copthorne Hotels Plc as well as its parents, City Developments Ltd, one of the largest companies in Singapore.

16 Aug 2010.