With 34% of its loan book to be refinanced in FY2025, and a “low” fixed-hedge profile of 32%, Wong and Tan are optimistic that CDLHT will be a “top beneficiary” of lower interest rates once cuts materialise in 2025.
RHB Bank Singapore analyst Vijay Natarajan trimmed his target price on CDL Hospitality Trusts (CDLHT) yet again last week after the release of the REIT’s results for FY2024 ended Dec 31, 2024. Now, DBS Group Research is doing the same, staying “buy” on the REIT but with a lower target price of $1.10 from $1.20 previously.
Still, DBS remains upbeat on its “attractive valuations for a Singapore-focused hotel play”. In a Feb 3 note, DBS analysts Geraldine Wong and Derek Tan say CDLHT “continues to be one of the top proxies” within the S-REIT space for a turn in interest rates. “Notably, CDLHT saw a 40 basis point q-o-q dip in borrowing costs, after peaking in 3QFY2024.”
