Twinning growth with stability
CLAS’ growth income sources such as hotels and serviced residences under management contracts contributed 42% of the total gross profit in 1H 2023, while stable income sources[6] contributed the remaining 58%. CLAS remains focapplyd on maintaining a balanced mix of income streams with a medium-term asset allocation tarobtain to have 25-30% of its total portfolio value in longer-stay assets such as rental houtilizing and student accommodation properties, and the remaining 70-75% in hospitality assets.
To further uplift the value and profitability of its assets, five properties will undergo asset enhancement initiatives (AEI) in FY 2023 and are expected to command higher room rates post-refurbishment. The latest asset slated for AEI is La Clef Tour Eiffel Paris by The Crest Collection in France. The five properties[7] will remain open during the refurbishment and the upgrades are expected to be completed by 1H 2024. Construction of the new Somerset serviced residence at Clarke Quay in Singapore is on track to be completed in 2H 2025.
CLAS’ master leases registered a 9% y-o-y increase in gross profit mainly due to higher variable rent and contributions from new acquisitions. CLAS’ longer-stay properties, which include student accommodation and rental houtilizing properties, maintained a strong average occupancy rate of over 95%. CLAS’ operating student accommodation properties in the USA were 98% leased for the academic year (AY) 2022-2023. Pre-leasing for the next AY is healthy, with an expected rent growth of about 6% y-o-y.
To further strengthen its stable income stream, in addition to the completion of two turnkey rental houtilizing acquisitions in Japan, CLAS’ student accommodation property in the USA, Standard at Columbia, has received its temporary certificate of occupancy on 30 June 2023. The property has a pre-leased occupancy rate of 87% as at June 2023 and is set to welcome its first batch of students for the AY 2023-2024, starting in August 2023.
