SINGAPORE’S real estate investment trusts (S-Reits) with hotel assets recorded broadly stable operational performance in the third quarter, even as tourism activity normalizes following the post-pandemic travel boom.

Trading updates released last week show that revenue per available room (RevPAR) for most trusts has remained relatively resilient, despite a high base compared to the strong growth seen in the same period a year earlier .

CapitaLand Ascott Trust reported an 8 percent improvement in gross profit for the third quarter ended September as portfolio replenishment initiatives yielded positive results. On a comparable basis, excluding acquisitions and disposals, the gross margin would have been 2 percent higher year-on-year, thanks to better operational performance.

The trust’s revenue per disposable unit (RevPAU) rose 3% year-on-year to S$158, remaining above pre-pandemic levels. This was mainly due to a higher average occupancy rate, while average daily rates (ADRs) remained relatively stable.

In the same way, Far East Hospitality TrustHotel RevPAR increased 2.8 percent year-over-year in the third quarter driven by higher ADR as all hotels exited government contracts, giving the portfolio better pricing flexibility.

RevPAU for assisted living facilities also increased 2.5 percent year-over-year in the third quarter.

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In the meantime CDL Hotel Trusts reported mixed RevPAR performance across its portfolio, with around half of the markets – including Australia, Japan and Germany – experiencing growth in the third quarter.

The RevPAR of its Singapore properties, however, fell 10.3% year-on-year in the third quarter, as demand normalized following a period of exceptional ADR growth in 2023.

Nonetheless, its RevPAR in Singapore remained 18.9% higher than pre-pandemic levels in Q3 2019.

THE Macroeconomic review According to a report released last month by the Monetary Authority of Singapore, the increase in Chinese tourists has supported the growth of tourism-related sectors.

Average monthly visitor arrivals to Singapore in the third quarter increased by 14 percent compared to the second quarter.

The number of Chinese visitors increased by 56 percent, contributing about two-thirds of the increase in arrivals.

The report also notes that Singapore’s hotel occupancy rate jumped to 89 percent between July and August, compared to 80 percent in the first half of 2024, with a widespread increase seen across all hotel tiers, partly due to to longer stays of Chinese tourists. SGX SEARCH

The author is a research analyst at SGX. For more research and information on the Singapore Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts manual.