Singapore Strategy - Summit fever
Shared By Stock Fanatic on Friday, June 8, 2018 | 8.6.18
■ Part of the Orchard area, location of prestigious hotels like Shangri-La and St Regis, are marked ‘special event areas’.
■ Heightened security could slightly disrupt activities (hotels, gaming) in the gazetted areas but the historic event sets SG up for future success to hold global summits.
■ Visitor arrivals/visitor days for Mar 2018 were up 6.6%/ 8.6% yoy. Industry RevPAR was up 6.2% yoy in Mar 18 and +4.2% YTD.
■ We think hospitality, services and office (multiplier effect) are the three broad themes to think of Singapore beyond the Summit via CDLHT, GENS, DBS, CCT and K-REIT.
Sentosa and Orchard could be the safest spots in Singapore
We think the heightened security measures in the gazetted areas (Sentosa Island and Orchard area) could slightly disrupt hotel occupancy and footfall over the 4-5 days of the Trump-Kim summit. Conversely, overall visitor arrivals should increase from delegations, security entourages and >3,000 reporters. Every tourist to Singapore spends an average 3.5 days and contributes c. S$1,500 to overall tourism receipts (TR). This unscheduled event could be handy to STB’s 2018 target of S$27.1bn-S$27.6bn (+1 to 3%).
CDL HT, FEHT and GENS are within the gazetted boundary
Our channel checks with the hospitality S-REITS suggested that hotel bookings have not shown significant increases/cancellations ahead of the Summit scheduled for 12 Jun. CDLHT’s Orchard Hotel and Genting Singapore operate within the Summit’s gazetted boundaries. Other Orchard hotels and retail REITS’ operations that are not bounded by the gazette are FEHT’s The Quincy Hotel and Hotel Elizabeth Ascott Residence Trust (Ascott Orchard), OUE Hospitality Trust (Mandarin Orchard), Starhill Global REIT (Wisma Atria and Ngee Ann City) and SPH REIT (Paragon Shopping Centre).
Beyond the Summit, hospitality numbers are encouraging
Singapore Tourism Board (STB)’s Mar 18 statistics reported 6.6%/8.6% yoy increases in visitor/visitor days. Average length of stay remained stable yoy at 3.3 days. Overall visitor arrivals were up 7.1% yoy in 1Q18 to 4.63m, a record for a 1Q. Industry RevPAR was also up 6.2% yoy in Mar 18 and +4.2% YTD. We see the encouraging statistics as precursors to our industry and hospitality S-REITS RevPAR forecasts of +7% and +5% yoy respectively. We expect a +6% yoy visitor arrivals in 2018, while STB has conservatively forecast a range of between +1 and +4% to 17.6m-18.1m.
Singapore as arbitration hub benefits hospitality, services and office sectors in the medium term
The Trump-Kim Summit reaffirms Singapore as a preferred choice of venue for a highprofile global summit and arbitration hub. The last historic meeting was in 2015 between Presidents Xii Jinping and Ma Ying-jeou over the cross-strait issues. The Singapore International Arbitration Centre (SIAC) has seen a 32% yoy jump in new cases in 2017 involving S$5.3bn. SIAC is ranked the most preferred arbitral institution in Asia, and the 3rd most preferred arbitral institution in the world, after London and Paris.
Source : CSGCIMB Research
Posted on Friday, June 8, 2018 |
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Labels: Equity Strategy