CDL Hospitality Trusts - CGS-CIMB Research 2021-08-31: Maiden Foray Into New Lodging Spaces

CDL HOSPITALITY TRUSTS (SGX:J85) | SGinvestors.io CDL HOSPITALITY TRUSTS (SGX:J85)

CDL Hospitality Trusts - Maiden Foray Into New Lodging Spaces

  • CDL Hospitality Trusts ventured into residential build-to-rent (BTR) market in UK for a max sum of £73.3m.
  • Limited supply and strong demand will support the demand for its BTR.
  • This will enhance its income stability. DPU accretion 2.2%. Reiterate Add.



CDL Hospitality Trusts ventured into built-to-rent market in Manchester, UK

  • CDL Hospitality Trusts (SGX:J85) entered into a land purchase agreement and a development funding agreement to invest in a residential build-to-rent (BTR) forward funding scheme in Manchester, UK, for £73.3m (S$136m).
  • CDL Hospitality Trusts acquired land and buildings (£9.5m) located on the south east side of Longacre Street, Ancoats, Manchester, UK from Packaged Living, which will redevelop the land into a residential BTR (to be known as The Castings) for £63.8m; £58.2m will be paid out periodically over the development period, and the remaining cost will be paid upon completion. Including fit-out and transaction expenses, the total transaction cost works out to be £78.9m (S$146.5m), funded by GBP debt.
  • The property will be developed into a freehold 352-unit BTR block, comprising lodging units, common amenity spaces (gym, cinema, lounge), rooftop terrace and ground floor retail spaces. The project should be completed by May 2024F.


A DPU-accretive deal at attractive pricing

  • The total purchase consideration of £73.3m is lower than the funding assets.
  • DPU accretion is expected to be 2.2%, based on FY20 distribution on a pro forma basis.


A new venture that will enhance income stability



Reiterate ADD on CDL Hospitality Trusts at an unchanged target price of S$1.32






EING Kar Mei CFA CGS-CIMB Research | LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2021-08-31
SGX Stock Analyst Report ADD MAINTAIN ADD 1.320 SAME 1.320



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