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Ascott Residence Trust
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
Financials &
Additional
Information
2015 Review
According to Economic Intelligence Unit (EIU),
Singapore’s Gross Domestic Product (GDP) grew
2.0% in 2015, which was lower than 2014’s growth
rate of 2.9%. Despite a strong financial sector,
Singapore’s economy struggled to fight spillover
effects from China’s slowdown through 2015. China is
one of Singapore’s key trading partners, as wholesale
and retail trade make up nearly 20% of its GDP.
In 2015, visitor arrivals into Singapore recorded a 0.9%
year-on-year (YoY) increase to reach 15.2 million.
This is in line with Singapore Tourism Board’s (STB)
forecast of 15.1 million to 15.5 million visitor arrivals in
2015. With corporates continuing to rationalise their
travel and accommodation budgets and coupled with
increasing new hotel supply in Singapore outstripping
growth in demand, we saw a slight decline in Average
Daily Rate (ADR). Consequently, Revenue per Available
Unit (RevPAU) declined by 5% YoY, from S$211
in 2014 to S$201 in 2015. Despite the decline in
RevPAU, average occupancy for our three properties
has exceeded 80% since 2013.
2016 Outlook
Singapore’s economic growth is expected to remain
moderate in 2016, with the Singapore government
forecasting GDP growth of 1% to 3%. EIU predicts the
economy to grow 2.4% in 2016. The accommodation
market in Singapore will likely remain challenging with
close to 4,000 rooms expected to be added to the
current stock of rooms. This increase in supply coupled
with projected slowdown in visitor arrivals will likely
impact the hospitality market.
Despite the uncertain growth outlook, Singapore
continues to be a key market for corporate travellers
worldwide. Occupancy of our properties is likely to remain
stable in 2016 as we continue to focus on the long-stay
corporate segment. Major returning events in 2016 such
as the biennial Singapore Airshow, Asia’s largest Aviation
Airshow, Food&Hotel Asia, CommunicAsia and the hugely
popular Formula 1 Grand Prix are expected to increase
visitor arrivals to Singapore. In addition, the Singapore
Tourism Board targets to spend S$20 million over the next
two years through its largest collaboration with Singapore
Airlines and Changi Airport Group, boosting its marketing
campaign to attract leisure, business and MICE arrivals
from more than 15 markets worldwide. We believe STB’s
continual efforts to reposition Singapore to appeal to both
corporate and leisure travellers alike would boost demand
for both short- and long-term accommodation over the
next two years.
The redevelopment of Somerset Grand Cairnhill
Singapore, which Ascott Reit divested in 2012 and
subsequently entered into a sale and purchase
agreement in 2013 to acquire upon completion,
is currently underway. The building is expected to
obtain its temporary occupation permit by the end
of 2016 and the property is on track to be delivered
in end 2017.
Gross Rental Income
(S$’000)
Agreed
Property Value
at Acquisition
(S$’million)
FY 2015 FY 2014
Ascott Raffles Place Singapore
9,297
9,064
220.0
Citadines Mount Sophia Property Singapore
9,911
10,086
107.0
Somerset Liang Court Property Singapore
15,881
16,910
127.5
Revenue Per Available Unit (S$)
FY 2015
FY 2014
Citadines Mount Sophia Property Singapore
176
179
Somerset Liang Court Property Singapore
221
235
