GROSS RENTAL INCOME (RMB’000) FY 2023 FY 2022 Citadines Xinghai Suzhou 12,961 7,968 Citadines Zhuankou Wuhan 12,044 14,365 Somerset Grand Central Dalian 33,867 28,684 Somerset Heping Shenyang 25,732 19,056 Somerset Olympic Tower Property Tianjin 37,968 37,858 REVENUE PER AVAILABLE UNIT (RMB) FY 2023 FY 2022 Citadines Xinghai Suzhou 209 128 Citadines Zhuankou Wuhan 120 145 Somerset Grand Central Dalian 455 389 Somerset Heping Shenyang 261 193 Somerset Olympic Tower Property Tianjin 469 445 6 Source: OAG (2024) 7 Excluding Ascott Guangzhou which was divested in December 2020 and Somerset Xu Hui Shanghai which was divested in May 2021. capacities. As of December 2023, international flight capacity to and from China was only 62% of December 2019 levels6. In line with the market, bookings at CLAS’ China properties were largely from the domestic segment in 2023. The average occupancy of the properties was resilient at close to 70%, given the base of corporate long stays and project group bookings. Several exhibitions, concerts and events, in addition to public holidays, such as the Labour Day weekend and Golden Week, and the summer holidays, boosted transient demand. In FY 2023, RevPAU increased gradually quarter-onquarter. On a full year basis, RevPAU increased 16% YoY in RMB terms. 4Q 2023 RevPAU increased 7% YoY to 86% of 4Q 2019 same-store RevPAU7. 2024 OUTLOOK Growth in China is projected at 4.6% in 20248. China’s economy is facing several challenges including low consumer confidence and deflationary pressure5. In January 2024, China’s consumer prices fell at its steepest pace month-on-month in more than 14 years1. In a welcomed move, China’s central bank announced the deepest cut to bank reserves in two years in late January 2024, injecting about US$140 billion of cash into the banking system, to defend markets and spur growth2. To attract more foreign investment, the Chinese government rolled out 24 policy measures, pledging to beef up support for foreign investors’ research and development in China and ensuring their equal participation in government procurement activities4. However, it remains uncertain if foreign investors will return in 2024, due to worsening geopolitical relations and investor skepticism9. Chinese travellers are expected to make more than 6 billion domestic trips in 2024, close to 2019 numbers10. China reported a record upsurge in travel and consumption during the Lunar New Year holidays. A total of 474 million trips were made within mainland China during the 2024 Lunar New Year – the first since China reopened fully, an increase of 34% compared to 2023 and up 19% compared to 20195. International arrivals are projected to return to 50% of 2019 levels in 2024. Since the second half of 2023, China has eased administrative and visa requirements to facilitate international travel into the country11. The restoration of international flights has also picked up pace. China’s international capacity has recovered to 70% of pre-COVID-19 levels in 1Q 20246. This is expected to facilitate travel to China for business, education and leisure. With long-stay guests as the primary source of business, CLAS’ China properties are expected to remain resilient against macroeconomic headwinds. International demand is expected to improve further in the coming months, as the frequency of flights to and from China continues to recover progressively, and as China introduces more visa-free arrangements with other countries. 8 Source: International Monetary Fund (2024) 9 Source: Peterson Institute for International Economics (2023) 10 Source: South China Morning Post (2024) 11 Source: The Straits Times (2023) ANNUAL REPORT 2023 35 Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information
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