Letter to Unitholders

On behalf of the Board of Directors of the H-REIT Manager and the HBT Trustee-Manager, I am pleased to present our annual report for the financial year ended 31 December 2020 ("FY 2020").


In FY 2020, the COVID-19 pandemic brought about unprecedented challenges to the global economy. Measures such as lockdowns, border controls and domestic restrictions implemented by governments across the world to curb the spread of the virus severely disrupted the hospitality sector globally.

In the face of the global downturn, we responded quickly by implementing proactive measures to contain costs and conserve cashflows. Such measures include the temporary closing of hotels, shortening working hours, implementing unpaid leave as well as furloughs for hotel employees, maintaining operations on minimal manning levels, reviewing of operational contracts for deferment or cancellation and deferring non-essential capital expenditure. Above all, the safety and well-being of our guests and staff on the frontlines were foremost on our minds.

On the demand side, we actively pursued alternative revenue channels, such as demand for isolation facilities, foreign workers affected by border closures, staycation business, accommodation for essential workers or business travellers, to mitigate the impact of the pandemic.

For FY 2020, with the exception of the Singapore and New Zealand Hotels, our properties were either closed on a temporary basis or have experienced varying degrees of occupancy declines since March 2020. Occupancies for our New Zealand and Singapore Hotels were largely supported by demand for accommodation facilities used for isolation purposes and continue to be so to date. As of 28 February 2021, all the hotels are open except for the hotel in Florence, Italy.

Balancing the need to conserve cash while continuing to invest in our properties to optimise their value and potential, we took the opportunity during low occupancy to perform various asset enhancement initiatives incorporating essential refurbishment and maintenance works, to minimise future disruptions ahead of the eventual normalisation of business levels. During FY 2020, W Hotel completed the renovation project for the all-day dining restaurant, the kitchen table, Copthorne King's Hotel completed its room refurbishment project, Angsana Velavaru completed a major refurbishment of all 79 beach villas and we also officially opened the presidential villa at the Raffles Maldives Meradhoo resort.

In FY 2020, we completed three transactions – the divestment of Novotel Singapore Clarke Quay ("NCQ"), the acquisition of W Hotel and the divestment of Novotel Brisbane (1). Through the Singapore transactions, we strengthened our long term presence in Singapore, and W Hotel has offered some form of diversification during this pandemic with its differentiated offering and location. We have strategically exited the Brisbane market via the sale of Novotel Brisbane and recycled capital in search of better returns while strengthening our financial position to achieve greater financial flexibility.

Net property income ("NPI") for FY 2020 was S$69.3 million, 50.9% lower than the previous year, mainly due to the COVID-19 pandemic, which led to a significant decline in tourism, business travel, and the deferment or cancellation of major MICE events, wedding banquets and social functions. While there was inorganic NPI contribution from W Hotel in 2H 2020, this was more than offset by the absence of contributions from NCQ and Novotel Brisbane. Overall, the collective decline was partially mitigated by minimum rent, governmental relief measures and alternative sources of business.

Total distribution to Stapled Security Holders (including capital distribution and after retention for working capital) for FY 2020 was S$60.4 million and DPS was 4.95 cents, a decrease of 44.8% and 45.1% yoy respectively. A capital distribution of S$20.0 million which relates to a partial distribution of the proceeds from the divestment of NCQ was made to mitigate the impact of divestments and decline in distribution due to the impact brought about by the pandemic.

As at 31 December 2020, the portfolio book value (excluding right-of-use assets) decreased by 8.8% yoy to S$2.6 billion (2), partly attributed to the divestments of NCQ and Novotel Brisbane, which more than offset the value attributed to the newly acquired W Hotel. On the same store basis (stripping out NCQ and Novotel Brisbane and assuming W Hotel was included as at 31 December 2019), the decline would have been 5.1% yoy instead.

Due to our healthy balance sheet and financial strength, we are in a strong position to weather this crisis. With ample debt headroom, we remain well-placed to pursue acquisitions, with a focus on long term value creation for our Stapled Security Holders. We will also continue to evaluate suitable divestment opportunities as they arise to recycle capital for better returns.


A year since the outbreak of the COVID-19 pandemic, the world continues its fight against resurgent waves, with fresh lockdowns and restrictions being imposed globally. The availability of the vaccines is expected to pave the way for recovery, although it will still take time before mass travel resumes in full force. Singapore has stepped up its border reopening efforts through bilateral or unilateral travel arrangements, which will facilitate reviving inbound travel when mass vaccination takes place and the pandemic situation is brought under control globally.

In 2020, visitor arrivals to Singapore fell 85.7% yoy to 2.7 million, the lowest in four decades (3), as a result of the unprecedented global travel restrictions and border closures. The government has launched initiatives to promote local tourism, such as the S$45 million SingapoRediscovers marketing campaign and S$320 million worth of SingapoRediscovers vouchers for Singaporeans to spend on local hotel stays, attractions and tours. Occupancy for our Singapore Hotels was supported by continued demand for dedicated isolation facilities, business from project groups and foreign workers affected by border closures. RevPAR for the 6 Singapore Hotels (4) was down 51.4% yoy, mainly due to a lower average daily rate. The inclusion of W Hotel into our portfolio in July 2020, coupled with the timely resumption of the staycation business in the same month, lifted RevPAR in the third and fourth quarter of 2020.

In December 2020, Singapore moved into Phase 3 of reopening and increased the maximum number of physical attendees for MICE events to 250 (subject to relevant approvals) (5). As we move towards a recovery, countries which have demonstrated strong ability to contain the situation, such as Singapore, are likely to rank among the top choices for travel and MICE events in the near to medium term. Singapore was chosen to be the host country to hold the World Economic Forum's annual meeting in August 2021, reflecting the international community's trust and confidence in Singapore's handling of the pandemic (6).

On the supply front, Singapore's hotel inventory is estimated to increase by 146 net rooms in 2021, representing approximately 0.2% of existing room stock. Over the next three years, supply growth is expected to remain low at an annualised growth rate of 1.7% (7).

For Claymore Connect, we have waived up to four months of rent for eligible retail tenants per government regulation, helping tenants to mitigate the impact of the COVID-19 measures on their businesses. In addition, we recognised that some tenants required further support to sustain their operations and extended rent deferments on a case-by-case basis.

In New Zealand, total visitor arrivals declined by 74.4% yoy for 2020 (8). The country's border remains closed to international travellers, except for travellers with specific approval granted (9). With the implementation of a mandatory 14-day isolation period for arrivals, Grand Millennium Auckland was contracted by the government as a managed isolation facility towards the end of 2Q 2020. For FY 2020, the RevPAR for the hotel declined by 19.2% yoy. The contract as a managed isolation facility is expected to continue to support occupancy through 1Q 2021.

The lease structure of the Australia Hotels is largely a fixed rent structure which has insulated CDLHT from the downturn in trading conditions in FY 2020 due to the pandemic. With the divestment of Novotel Brisbane completed on 30 October 2020, the rental contribution (in SGD terms) from Australia was lower by 8.5% yoy for FY 2020. The Managers are in the midst of an operator selection process which involves negotiation of new terms ahead of the expiry of the remaining two Perth Hotels' leases on 30 April 2021. At the expiration of the leases, the Perth Hotels will be exposed to the underlying trading conditions.

In Japan, visitor arrivals declined by 87.1% yoy for 2020 (10). The decline was mainly attributed to travel bans and a nationwide state of emergency declared by the Government of Japan in mid-April 2020, in response to the pandemic. While restrictions were gradually eased in 3Q 2020, a resurgence in COVID-19 cases in December 2020 led to fresh measures being imposed and the suspension of the "Go To Travel" and "Go To Eat" campaigns. As a result, the Japan Hotels reported a RevPAR decrease of 63.0% yoy for FY 2020. The extension of the second state of emergency, which was declared in Tokyo from early January 2021, has also cast a shadow of uncertainty on the upcoming Tokyo Olympic Games (11).

In the Maldives, total tourist arrivals recorded a decline of 67.4% for 2020 (12). Although there has been a gradual recovery since the borders reopened on 15 July 2020, the Maldives Resorts were largely unoccupied for most of 2H 2020, before business activity picked up tangibly in December 2020. The Maldives remains one of the few countries in Asia with its borders still open to international tourists despite second or third waves of the pandemic. However, as top inbound markets for 2020 included the UK and EU nations such as Italy, Germany and France, the resurgence of COVID-19 and fresh lockdowns across these countries are likely to weigh on inbound travel to the Maldives.

Our UK Hotels were temporarily closed for about three to five months during the first nationwide lockdown which began around end of March 2020. Hilton Cambridge City Centre remained mostly open throughout the second lockdown triggered by a resurgence of the pandemic in the UK, while The Lowry Hotel closed intermittently, only opening to house elite sports teams and entertainment groups. Collectively, the UK Hotels posted a yoy RevPAR decline of 68.5% for FY 2020. The UK Hotels have and continue to operate at minimal staffing levels, with payroll heavily subsidised by the UK government's furlough scheme which has been extended to April 2021, thereby helping to contain operating costs and losses. The hotels remain open to essential workers currently whilst being in nationwide lockdown.

In continental Europe, the Pullman Hotel Munich and Hotel Cerretani Firenze saw a RevPAR decline of 75.5% and 85.5% yoy respectively for FY 2020, with the latter being closed for a total of seven months last year. Both Germany and Italy faced a slew of renewed measures from early November 2020 which ended in domestic lockdowns as the second wave of pandemic swept across Europe. While Pullman Hotel Munich continues to operate to provide accommodation for essential business travellers, Hotel Cerretani Firenze closed on 30 October 2020 and the reopening is subject to the easing of government restrictions on travel and leisure activities.


In July 2020, we completed the divestment of NCQ for S$375.9 million, representing an 87.0% premium over our original purchase price. As part of the same redevelopment transaction, we will acquire a brand new lifestyle hotel on the same site with about 460 to 475 rooms under a forward purchase arrangement. The acquisition is expected to complete in 2025 (13) for no higher than S$475.0 million following the completion of the redevelopment. The new hotel will be part of a new iconic integrated development and the first "Moxy" branded hotel in Singapore.

The acquisition of W Hotel, a luxury lifestyle hotel with 240 guest rooms, was also completed in mid-July 2020. The hotel, which offers its guests an expansive view of the marina and seafront, is equipped with a comprehensive suite of facilities including a ballroom, function rooms, swimming pool, spa, restaurants and bars. Strategically located in Sentosa Cove, W Hotel is well-positioned to benefit from demand growth expected to be generated by the various expansion initiatives at Sentosa and the southern part of Singapore in the medium to long term.


The fluidity of the environment and lack of visibility of the protraction on the global pandemic at the beginning of FY 2020 have made Management very conscious of conserving cash to ride out the crisis. The Managers have reviewed CDLHT's portfolio to identify only critical guest-related enhancements works to be conducted during this lull period to optimise the potential of the assets while deferring non-essential capital expenditure for the year.

W Hotel completed the renovation project for the all-day dining restaurant, the kitchen table, in December 2020 to increase seating capacity from 140 to 234, with new furnishings to improve overall guest experience. The renovations were undertaken by the seller under the terms of the acquisition.

Copthorne King's Hotel's room refurbishment project, which includes a makeover of the 142 rooms in the Tower Wing, was completed in April 2020. The new rooms are furnished with contemporary Chinoiserie décor and in-room technology, offering guests an enhanced experience.

In the Maldives, Angsana Velavaru commenced a major refurbishment of all 79 beach villas in 2019 and the refurbishment was fully completed in July 2020. As part of the refurbishment project, infinity pools were added to 24 beach villas creating a new category of villas, the Beachfront Infinity Pool Villas, strengthening the resort's overall attractiveness.

The construction of a new presidential villa at Raffles Maldives Meradhoo was also completed towards the end of last year, increasing the villa count from 37 to 38. The new presidential villa, Raffles Royal Residence, welcomed its first guests in December 2020. The new ultra-luxury villa features three bedrooms, a private beach, a 40-metre pool and unimpeded views of the seafront, strengthening the resort's positioning in the Maldives luxury resort market.

In line with our asset and financial management strategies, we divested Novotel Brisbane at a slight premium to valuation in order to recycle capital in search of better returns while strengthening our financial position to achieve greater financial flexibility. The exit of the Brisbane market was taken in view of the near to medium term challenges stemming from more hotel supply in the horizon while facing an uncertain recovery timeframe of the COVID-19 pandemic.


In September 2020, we refinanced a JPY3.3 billion 5-year fixed rate term loan and a JPY3.1 billion 5-year TMK bond (collectively S$81.7 million) into fresh 5-year fixed rate borrowings. In 4Q 2020, about S$82.6 million proceeds from the property divestments were used to reduce borrowings drawn under the revolving credit facilities ("RCF"). To further fortify its financial position and boost liquidity, CDLHT secured a fresh S$100.0 million committed multi-currency RCF as well as a S$100.0 million upsize to an existing committed multi-currency RCF, taking the total RCF from S$250.0 million in 2019 to S$450.0 million during the financial year.

As at 31 December 2020, CDLHT has a robust balance sheet with a gearing ratio of 37.5% and ample debt headroom of S$689.0 million (14), cash reserves of S$131.1 million and S$701.9 million of credit facilities (15). Our weighted average cost of debt continues to be low at 1.9% per annum while our floating rate risk is well-managed with 34.0% of our borrowings being floating rate loans. With a healthy balance sheet and strong liquidity, we are well-positioned to weather the pandemic and ride on the market recovery.


The global economic and health crisis resulting from the COVID-19 pandemic has increased awareness on long-term sustainability, elevating the significance of social factors and environmental factors. Over the year, we maintained continuous engagement with our stakeholders, including the master lessees and hotel managers of CDLHT's assets, to enhance transparency and explore further adoption of sustainable practices across our portfolio. Under the Sustainability Reporting requirements, we are pleased to present our Sustainability Report for FY 2020 on pages 108 to 120 of this Annual Report.

We remain committed to encouraging and working with our master lessees and hotel managers to adopt the best Environmental, Social and Governance ("ESG") practices for continued long term growth and enhancement of portfolio value for our stakeholders.


Over the course of the year, a number of our hotels have continued to be recognised as a preferred choice for travellers and guests. As the latest addition to our portfolio, W Hotel clinched several notable awards including Hotels.com Loved by Guests Award Winner 2020 with a 9.2/10 Rating and received the Gold award under the Best Hotel For a Staycation in Singapore category of Expat Living Reader's Choice Awards 2020. In the Tripadvisor Traveller's Choice Best of the Best Award 2020, SKIRT restaurant at W Hotel took the top spot for fine dining restaurants in Singapore and ranked eighth in Asia, while Grand Copthorne Waterfront Hotel ranked among the Top 25 Hotels for Service in Singapore.


In closing, I would like to take this opportunity to thank my fellow members of the Boards for their stewardship and invaluable advice, the management and staff for their unwavering commitment and hard work, which has enabled us to navigate this crisis thus far. On behalf of the Boards and management team, I extend my appreciation to all our lessees, hotel operators, business partners, service providers and Stapled Security Holders for your continued support.

Our thoughts go out to all whose lives and livelihoods have been affected by COVID-19. It has been an environment that none of us has experienced in our lifetimes.

I wish everyone well and look forward to meeting you at our annual general meetings on 23 April 2021.

Chan Soon Hee, Eric
Dated as of 1 March 2021

  • (1) W Hotel was acquired on 16 July 2020. NCQ and Novotel Brisbane were divested on 15 July 2020 and 30 October 2020 respectively.
  • (2) Significant market uncertainty still exists due to the COVID-19 pandemic. The carrying amounts of the properties were current as at 31 December 2020 only and values may change more quickly and significantly than under normal market conditions.
  • (3) Singapore Tourism Board ("STB")
  • (4) Comprises Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King's Hotel, Studio M Hotel and W Hotel. Assumes CDLHT owns W Hotel from 1 July for each period for comparison on same store basis. W Hotel was acquired on 16 July 2020. Excludes NCQ which was divested on 15 July 2020.
  • (5) STB, "Safe Management Measures for MICE Events", 28 December 2020
  • (6) The Straits Times, "World Economic Forum in Singapore postponed from May to Aug 17-20", 3 February 2021
  • (7) Based on STB, Horwath data (as at December 2020) and CDLHT research.
  • (8) Statistics New Zealand
  • (9) Immigration New Zealand
  • (10) Japan National Tourism Organization
  • (11) CNA, "Japan extends COVID-19 state of emergency, months before delayed Olympics", 2 February 2021
  • (12) Ministry of Tourism, Republic of Maldives
  • (13) Estimated timeline, subject to change.
  • (14) Computed on basis of the regulatory gearing limit of 50.0%.
  • (15) Includes committed revolving credit facilities amounting to approximately S$301.9 million.