SHREIT announces MB141.62 profit in 2018 performance Demonstrates high-quality assets, poised for growth

Monday 04 March 2019 10:52
Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) announced its 2018 performance achieving 418.83 million baht in revenue and a profit of 141.62 million baht derived from the strength of its hotel portfolio, the growth of the tourism industry in the ASEAN region with support from the business segment. Revenue per available room (REVPAR) has been increasing across the portfolio of hotels while the total asset valuation improved by 9.6 percent with a net worth of US$143.2 million. The performance report also highlights the REIT manager's strong ability to identify quality assets.
SHREIT announces MB141.62 profit in 2018 performance Demonstrates high-quality assets, poised for growth

Mr. Patan Somburanasin, Managing Director of Strategic Property Investors (SPI), an independent professional REIT manager, revealed that in 2018 SHREIT generated a total revenue of 418.83 million baht and a net profit of 141.62 million baht.

SHREIT's initial portfolio of 3 hotels in Indonesia and Vietnam has reported a continued growth enacted by the positive response of the tourist and business segments. IBIS Saigon South Hotel in Vietnam improved its REVPAR by 7.1 percent, Capri by Fraser Hotel in Vietnam by 3.3 percent and Pullman Jakarta Central Park Hotel in Indonesia by 1.0 percent.

However due to the unexpected capital market volatility at the year-end 2018, SHREIT had to withdraw from its first capital increase to acquire two hotels in Malaysia and Indonesia. The transaction incurred once-off non-recurring costs which impacted Q4/2018 results causing the deferred payment of dividend of the fourth quarter. The REIT manager is confident SH REIT will achieve its growth target for 2019.

Towards the end of 2018, SHREIT reappraised the value of the REIT's portfolio. As of December 31, 2018 the portfolio was valued at US$143.2 million – 9.6% higher than the purchase price of US$130.7 million and an increase of 3.6 percent from the US$138.2 million investment value of the 2017 fiscal year. This increase in valuation reflects the REIT manager's ability to select high quality assets and identify outstanding financial opportunities.

SHREIT's portfolio of assets includes the Pullman Jakarta Central Park Hotel in Indonesia, a 317-room 5-star hotel; the Capri by Fraser Hotel in Ho Chi Minh City, Vietnam, a 175-room 4-star hotel; and the IBIS Saigon South Hotel, a 140-room 3-star hotel in Ho Chi Minh City. The portfolio composition of three to five-star hotels offers diversification through high-quality assets located in growing key cities and targeting various customer segments from international tourists to business travelers.

Earlier this year, the Pullman Jakarta Central Hotel was honored with the hosting of the auction of paintings of the President of the Republic of Indonesia, Mr. Joko Widodo to raise funds as organised by the election candidates. This clearly reflected the prime status of the hotel as recently recognised by the Best Luxury Art Hotel for Indonesia Award and Best Hotel City Award (Indonesia).

The REIT manager remains optimistic and confident in the ability of the assets to continue to generate sustainable revenue growth and is committed to develop and pursue a growth strategy and initiatives.