OCBC Investment Research lowered its target price on Singapore's
CDL Hospitality Trusts to S$1.79 from S$2.05 but kept
its 'hold' rating, citing weaker revenue per available room
(RevPAR) projections in Singapore.
CDL units were up 0.55 percent at S$1.83 versus a 0.8
percent gain in the benchmark Straits Times Index on
Friday. The stock has fallen about 3 percent so far this year.
From January to April, RevPAR for Singapore hotels fell 2.6
percent from a year earlier to S$218 ($170), OCBC said, adding
visitor arrivals are converting into fewer room nights on a per
OCBC forecast hotel room demand growth of 5.4 percent per
year from 2013 to 2015, lower than the projected 5.8 percent per
annum increase in room supply.
"Concerned with an oversupply situation building up in the
hospitality market and generally weak performance of the
industry year-to-date, we are lowering our FY13 RevPAR growth
assumption for CDLHT's Singapore hotels from 0% to -5%," OCBC