Why is CDL Hospitality Trust bullish on resort assets?

Why is CDL Hospitality Trust bullish on resort assets?

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CDL Hospitality Trust Jumeirah Dhevanafushi
Jumeirah Dhevanafushi, Maldives

CDL Hospitality Trusts announced their acquisition of Jumeirah Dhevanafushi in the Maldives. See attachment below. Looking through their website reveals another property in the Maldives Рthe Angsana Velavaru. CDL acquired the Velavaru property in January 2013 and the Dhevanafushi property in December 2013.

Looking through the websites of two other Singapore publicly listed hospitality trusts – Ascendas Hospitality Trust and Far East Hospitality Trust – reveals that neither have pure resort assets.

So what’s CDL’s rationale for these resort acquisitions and venturing beyond city hotels?

Emerging market growth

From section 3.2: “In recent years, the rise in Asian visitors, particularly from China, has benefited the Maldives tourism sector with an overall increase in room demand despite some weakness in demand from its traditionally strong European source markets. Since 2010, China has become the first Asian market to gain the top position in terms of visitor arrivals into Maldives, with its market share increasing from 2.9% in 2005 to 15.0% for 2010 and now to 30.8% for the first ten months of 2013, growing by 45.8% compared to the corresponding period in 2012. Maldives’ fourth largest market, Russia, is a bright spot amongst the European source markets. Russia contributed 6.6% of overall tourist arrivals in the Maldives for the first ten months of 2013, registering a 16.6% growth on a year-on-year basis. Overall tourist arrivals recorded robust growth of 18.0% for the first ten months of 2013 on a year-on-year basis, and are expected to reach 1,290,000 by the end of 2014.”

Upside on development density

From section 3.5: “The regulations relating to the percentage of built up area for tourist facilities has been increased from 20.0% to 30.0% of total land area. The property’s current utilisation is approximately 17%, with potential for further capital enhancements including the development of additional villas.”


Acquisition of the Jumeirah Dhevanafushi

Download (PDF, 137KB)

Image: Jumeirah

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