CityDev turns to surging Europe as Asian hospitality business languishes

RevPAR for the rest of Asia declined by 11.7%.

Drawing uninspiring numbers from its business in Asia particularly in Singapore, the real estate development company has its diversification to thank as a surge from its European business has done enough to band-aid the weakness.

According to analysts from UOB Kay Hian, lower occupancy prompted City Developments Limited’s global hotel RevPAR to dip by 1.4%. This was mainly due to Singapore, which saw RevPAR decline by 6.6%, and the rest of Asia, which registered an 11.7% decline in RevPAR.

“Management attributed this to the loss of contribution from the W Singapore (securitised Dec 2014), supply-side pressure, lower visitor numbers and the stronger S$ vs several other Asian countries,” UOB Kay Hian said.

Meanwhile, though numbers appeared bleak in the Asian region, CityDev’s European business provided the bright spot, registering a 14.4% increase in RevPAR due to higher occupancy and daily rates.

Furthermore, UOB Kay Hian noted that CDL’s overseas activity generally remained healthy.

“In China, Tower 1 (462 residential units) of CDL’s Suzhou mixed-use project saw sales of about 82% (2Q15: 61%). The group also plans to launch its 126-unit Chongqing project and 85 bungalows in Shanghai later this year,” UOB Kay Hian said.