CDL Hospitality Trust's Pullman Hotel Munich. (Photo: CDL Hospitality Trust)CDL Hospitality Trust's Pullman Hotel Munich. (Photo: CDL Hospitality Trust)

Fitch Ratings has affirmed the long-term issuer default rating of CDL Hospitality REIT at 'BB+' with a stable outlook.

CDL Hospitality REIT is the REIT component of Singapore-listed hospitality landlord CDL Hospitality Trusts (CDLHT).

The affirmation is underpinned by Fitch's expectations that the REIT is on track to deleverage to a level that is commensurate with its rating by end-2022.

This is supported by the lifting of travel restrictions across most of the REIT’s key APAC markets between 2Q and 4Q 2022 and a continued rebound in global travel.

The stable outlook reflects Fitch’s expectations of a year-on-year improvement in cash flows and steady leverage in the next 12 months from higher revenue per available room (RevPAR) with the cessation of government isolation contracts in its Singapore properties.

These account for around 60% of the REIT's net property income (NPI).

This will counterbalance headwinds from high inflation and a slower economy, particularly in the trust's key European markets, said Fitch.

Fitch’s full report on CDL Hospitality REIT can be accessed here.

CDLHT was last done on the Singapore Exchange at SGD1.19, which presently implies a distribution yield of 3.43% according to data on the Singapore REITs table.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.