CDL H-Trust

CDL H-Trust: Credit Suisse maintains O/p with $2.34 TP. Recall that REIT plans to acquire Maldives’ 113-room Angsana Velavaru from Banyan Tree for US$71m (S$86.8m), which is in line with mgt’s strategy to acquire assets that are leveraged to the rising Asian affluence, particularly outbound Chinese travellers. Acquisition price implies a 9.6% annualised NPI yield and is expected to complete in a couple of weeks pending approvals from the Maldives authorities. The asset comes with future asset enhancement opportunities with the recent increase of built-up area for tourist facilities from 20% of total land area to 30%. The hotel will be operated by Banyan Tree under a ten-year lease where rents will be derived from gross operating profit less mgt fee subject to a minimum rent reserve of US$6m (implies a 7% NPI yield). House estimate fixed rents will account for 77% of rents and believe this mitigates the seasonality impact.