Ascott Residence Trust's RevPAU down 70% to $47 in Q3

Outlook muted as foreign travel remains limited, other markets see renewed outbreaks.

Ascott Residence Trust’s (ART) portfolio revenue per available unit (RevPAU) dropped to $47 in Q3, a 70% YoY decline compared to Q3 2019 but 27% higher than the previous quarter, the trust revealed in an SGX filing.

Average portfolio occupancy also rose to 40% from 30% in Q2. Overall, 93% of its properties are operational, with more properties having reopened as market conditions stabilized.

Gearing remains low at 34.6%, with debt headroom of $2.2b.

The trust expects international travel demand to take some time to return despite the formation of green lane arrangements and progressive easing of travel restrictions, especially in tourism-dependent markets such as Singapore.

ART’s Singapore portfolio saw its RevPAU shrink 50% in Q3 to $50m on the back of lower room rates. Whilst block bookings by the government is expected to help occupancy remain elevated, it also means operating on lower rates in the near-term.

In a more positive note, the trust expects to receive a possible boost from Ascott Orchard Singapore, which currently serves guests on staycations, in addition to guests on long stays and self-isolation.

Outlook also remains uncertain on other markets as borders remain closed, such as in Australia; or by a second wave of outbreaks, such as in Vietnam, with RevPAU falling by 58% to VND687,000.

In Australia, RevPAU contracted 63% to AU$47, blamed on the softer performance of hotels as most state borders remained closed. On the upside, block bookings from Australia’s government, military and healthcare workers were able to partially mitigate absence of traditional demand.

Meanwhile, large domestic markets such as China saw support from local demand, although RevPAU still recorded a 30% decline to RMB321.

The trust reported above-market portfolio occupancy of 60% in Q3 from their China portfolio, thanks to long stays and rising domestic demand. Whilst the recovery in international and expatriate demand remains soft, domestic corporate and industrial activities have resumed and expected to pick up pace, ART said.

Situation remains ‘fragile’ in France due to a recent spike in COVID-19 caseloads and tightened measures, according to ART. Of its 12 French properties temporarily closed in H1, 11 have already reopened, with remaining property expected to reopen in Q4.

Japan’s operating environment also remains challenging as locals reportedly prefer to visit regional cities in the country. For Q3, ART’s RevPAU in the market plunged 91% YoY to JPY1,068, hit by the absence of transient travel demand.

UK RevPAU recorded an 89% YoY decline to GBP17, whilst US RevPAU decreased 78% to US$47.