Singapore real estate investment trusts (S-REITs) with hospitality assets have reported mostly stable operating performance in the third quarter even as tourism activity normalises following the post-pandemic travel boom.

Business updates released last week show that revenue per available room (RevPAR) for most trusts remained relatively resilient, despite a high base from the strong growth seen in the same period a year earlier.

CapitaLand Ascott Trust reported an 8 per cent improvement on year in gross profit for the third quarter ended September, as its portfolio reconstitution initiatives yielded positive results. On a same-store basis, excluding acquisitions and divestments, gross profit would have been 2 per cent higher on year, due to stronger operating performance.

The trust's revenue per available unit (RevPAU) rose 3 per cent on year to S$158, staying above pre-pandemic levels. This was mainly due to higher average occupancy, while average daily rates (ADR) remained relatively stable.

Similarly, Far East Hospitality Trust's RevPAR for hotels rose 2.8 per cent on year in the third quarter on the back of higher ADR, as all hotels exited government contracts, giving the portfolio better pricing flexibility.

RevPAU from serviced residences also rose 2.5 per cent on year in Q3.

Meanwhile CDL Hospitality Trusts saw mixed RevPAR performance across its portfolio, with around half the markets – including Australia, Japan and Germany – experiencing growth in the third quarter.

RevPAR for its Singapore properties, however, fell 10.3 per cent on year in Q3, as demand normalised after a period of exceptional ADR growth in 2023.

Nevertheless, its RevPAR in Singapore remained 18.9 per cent higher compared with pre-pandemic levels in Q3 2019.

The Macroeconomic Review published by the Monetary Authority of Singapore last month noted that a surge in Chinese tourists has supported growth in tourism-related sectors.

Average monthly visitor arrivals to Singapore in Q3 grew 14 per cent compared with the second quarter.

Chinese visitor numbers rose by 56 per cent, contributing to around two-thirds of the increase in arrivals.

The report also noted that hotel occupancies in Singapore climbed to 89 per cent in July to August, from 80 per cent in the first half of 2024, with a broad-based increase seen across hotel tiers, partly driven by lengthier stays among Chinese tourists.

For more research and information on Singapore's REIT sector, visit sgx.com/research-education/sectors for the quaterly SREITs & Property Trusts Chartbook.

REIT Watch is a regular column on The Business Times, read the original version.

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