CDREIT to acquire Maldives hotel Jumeirah Dhevanafushi for $60m

Analyst shares bullishness on purchase.

CDL Hospitality Trusts announced the acquisition of Jumeirah Dhevanafushi, Maldives (newly opened in Nov-11) for US$60m (or ~5% of current market capitalisation) at net property yield of 6.2%, reports OSK-DMG.

"This is CDREIT’s second acquisition in Maldives and is expected to be fully debt funded with group gearing expected to increase from 28.1% to proforma level of 30.6%, while DPU yield accretion estimated at 2.2%," said OSK-DMG.

Post acquisition, Maldives will account for 7.5% of CDREIT’s portfolio (up from 4.2%).

"We like this acquisition as it increases CDREIT’s exposure to the highest RevPar market in the world backed by strong flow rate of visitor arrivals from the likes of China (24% market share with YTD +31% YoY growth) and Russia (7% market share and YTD +6.6% YoY)," said OSK-DMG.

"Impact likely to be newsflow positive and we expect rising contribution from Jumeirah as its yield stabilises by 2015," it added. The research firm maintained its Neutral call on CDREIT for now.