New Issue: 4.25% yield (IPG) offered by SGX-listed hospitality REIT

CDLHT is a leading Asian hospitality investment trust with assets under management of approximately SGD$3.5 billion (as of 31 December 2025). CDL Hospitality Trusts (“CDLHT”) plans to issue new SGD NC5.5 perpetuals at the initial price guidance (“IPG”) of 4.25%. These perpetuals have their first reset date on 20 August 2031, with subsequent resets every 5 years thereafter. Both the issuer and bonds are expected to be unrated. The net proceeds from the issuance will be used for general corporate and working capital purposes, investments, refinancing of existing borrowings, and financing of asset enhancement works.

Expect a rebound in earnings:

For the full year ending 2025 (“FY25”), CDLHT reported a 2.8% year-on-year (“YoY”) increase in gross revenue to SGD 267.57m (FY24: SGD 260.26m), supported mainly by growth from its Australia, UK, and Japan portfolios. However, net property income (“NPI”) declined by 4.1% YoY to SGD 129.69m (FY24: SGD 135.22m) due to softer Revenue Per Available Room (“RevPAR”) across the hotel portfolio, higher operating costs, and ongoing renovation works that temporarily limited revenue contributions from W Hotel (Sentosa Cove) and Grand Millennium Auckland. That said, excluding these two properties, revenue would have risen by 7.0% YoY, while NPI would have remained broadly stable, increasing only 0.3% YoY. This points to resilient underlying portfolio performance, anchored by CDLHT’s high-quality and diversified portfolio.

Management has highlighted that the refurbishment works for both properties have been completed as of the end of 2025. Management expects earnings to rebound for FY26 due to higher daily rates these refurbished assets can now command, and without the disruption of renovations.

CDLHT’s Singapore portfolio remains its main revenue driver, though performance softened in FY25. RevPAR declined 6.2% YoY due to lower average room rates, while occupancy remained stable at 79.0% (FY24: 78.8%). Consequently, NPI fell 9.6% YoY for the full year to SGD 76.98m (FY24: SGD 85.11m). Nonetheless, we remain optimistic about the Singapore portfolio, given a positive outlook for Singapore’s hotel sector, supported by the Tourism 2040 roadmap, upcoming local attractions and infrastructure, and additional major events. As such, Singapore hotel operators expect 2026 to see moderate growth in RevPAR, supported by higher occupancy and stable average rates, underpinned by stable international demand and a stabilising supply pipeline.

Credit Profile:

CDLHT reported an aggregate leverage ratio of 37.7% as of 31 December 2025 (30 September: 42.4%), in line with other SG hospitality REITs, a level we are comfortable with. There is also roughly SGD 819m debt headroom before the ratio breaches MAS' 50% limit. The Group reported a total debt of SGD 1.25b as of 31 December (30 September: SGD 1.41m). Around SGD 190M to SGD 390m of debt is maturing annually over the next three years (as of 31 December), which may be manageable if the Group maintains its positive operating cashflow momentum (note: operating cash flow for FY25 remains stable at SGD 114.30m (FY24: 120.71m)helped by the total available liquidity (cash and credit facilities) of SGD 593.50m as of 31 December. There is also potential for secured borrowings if additional financing is needed, as about 95.7% of CDLHT’s property value remains unencumbered.

The Group also reported an interest coverage ratio of 2.3x as of 31 December, improving slightly from 2.1x as of 30 September, and above MAS’ threshold of 1.5x. Encouragingly, the weighted average cost of debt fell to 3.0% as of 31 December (30 September: 3.4%), which helped support the interest coverage ratio and is a result of successful debt refinancing conducted in 2025. We think the Group can maintain a decent interest coverage ratio moving forward, barring a material rise in debt take-up. Per management, the cost of debt is expected to remain broadly stable for 2026. Meanwhile, a large part of CDLHT’s debt is floating rate (around 44%), which should benefit from the declining rates backdrop.

Table 1: Peer comparison

Issuance	Issuer	Ask Price	Years to Call	Yield to Worst
CDREIT Perpetual Corp (SGD)*	CDL Hospitality Trusts	100.00*	5.50*	4.25%*
CDREIT 3.700% Perpetual Corp (SGD)	CDL Hospitality Trusts	99.62	4.77	3.78%
ARTSP 4.600% Perpetual Corp (SGD)	CapitaLand Ascott REIT	105.11	4.00	3.23%
ARTSP 4.200% Perpetual Corp (SGD)	CapitaLand Ascott REIT	104.35	5.13	3.27%
EREIT 5.750% Perpetual Corp (SGD)	ESR-REIT	106.27	4.10	4.08%
Source: Bondsupermart, iFAST Compilations. Data as of 10 February 2026. *New issue

Overall, we think CDLHT’s credit profile is relatively stable with a manageable debt profile and interest coverage. At an IPG of 4.25%, CDLHT’s new perpetual issuance is offers decent value as compared to other SGD real estate perpetuals with 2030 – 2031 call dates, which are mostly trading at a yield-to-worst of between mid to high 3.0%. That said, we expect the final price guidance (“FPG”) to be adjusted downward from the IPG.

In our opinion, CDLHT’s new issuance is also fairly attractive relative to its closest peers – specifically perpetuals from CapitaLand Ascott REIT (Hospitality REIT issuer) - which are currently trading around 3.2%, albeit with a stronger credit profile. However, CDLHT’s new issuance is relatively attractive compared to EREIT 5.750% Perpetual Corp (SGD), which has a weaker credit profile. Do note that the two issuers also differ in their portfolio focus, with CDLHT being exposed to the hospitality assets, whereas ESR-REIT is primarily exposed to industrial and logistics assets.

In sum, we believe CDLHT’s new perpetual issuance is suitable for investors who are seeking a stable name with a solid market presence.

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a NIL position in the abovementioned securities. The analyst who produced this report holds a NIL position in the abovementioned securities.

All Contents here in do not constitute financial advice or formal recommendation and must not be relied upon as such. Bondsupermart and its Information Providers are not giving or purporting to give or representing or holding ourselves out as giving personalised financial, investment, tax, legal and other professional advice. Please read our full Terms and Conditions section on the website