YTL HOSPITALITY REIT

MAYBANK Investment Bank Research (Maybank IB) remains positive on YTL Hospitality REIT (YTL REIT) following their 2018 analysts’ briefing, premised on the earnings growth prospects from the company’s Australian hotels and a new property, as well as resilient income from master lease assets.

“Brisbane Marriott is currently undergoing major refurbishment works which involve major components of the hotel such as guestrooms, lobby, banquets, lounge and others.

“The exercise is expected to be completed by March 2019 at an estimated total capital expenditure of RM59.6mil.

“We look forward to the refreshed and refurbished hotel which could potentially enhance occupancy and room rates in the near future.

“Elsewhere, we understand that Melbourne Marriott and Sydney Harbour Marriott’s performances have remained favourable post their major refurbishments and we believe there is still some upside to room rates.”

Maybank IB also said the acquisition of The Green Leaf Niseko Village in Japan for RM223.2mil is currently in progress and on track for completion by end-2018.

“We have estimated an annualised 2019 net property yield of 5.2% and 2-4% contribution to YTL REIT’s 2019 to 2021 net property income.

“Elsewhere, YTL REIT remains committed to growing its portfolio and is currently evaluating several hotels owned by its sponsor, YTL Corp as its next acquisition target (such as Hotel Stripes Kuala Lumpur).”

The research house said its earnings estimates for the company currently remain unchanged. “We maintain our earnings forecasts whereby our near-term growth assumptions are supported by stable, resilient rental income at the Malaysian and Japanese properties, improving room rates and occupancy rates at the company’s Australian hotels post refurbishment works, and expected injection of The Green Leaf Niseko Village.