From the colourful lobby, through the newly refreshed rooms, and finally sitting down at SKIRT for a plate of chicken rice that was, dare I say, on par with Chatterbox... 😃
There was quite a bit to take in at W Singapore - Sentosa Cove today.
But somewhere along the way, the investor in me started asking a different question.
What happens after the renovation is done?
I had the opportunity to visit W Singapore as part of a corporate visit to CDL Hospitality Trusts (CDLHT), and two things stayed with me.
The first is Moxy Singapore Clarke Quay.
CDLHT previously sold the old Novotel Singapore Clarke Quay as part of the Liang Court redevelopment, unlocking value from a mature asset while securing the forward purchase of a brand-new hotel at the same location.
In simple terms, sell the old, unlock the value, but still keep a foot in a location you know well with something new.
The 475-room Moxy is expected to commence operations in 1H2027. What I will be watching is how quickly it can ramp up and eventually contribute meaningfully to CDLHT's earnings.
The second is valuation.
Like quite a number of S-REITs, CDLHT continues to trade at a discount to NAV.
Who doesn't like buying something at a discount? 😃 But I have always felt that cheap alone is never a catalyst.
Can the refreshed W translate its makeover into better operating performance? Can Moxy become another meaningful earnings contributor? And can improving financing costs and portfolio optimisation help support distributions?
Because ultimately, a discount to NAV tells us what the market is willing to pay today. What matters is whether there is a reason for investors to pay more tomorrow.
A big thank you to CEO Vincent Teo, CIO Mandy Khoo and the CDLHT team for the warm hospitality and sharing, and to Shimona and the SGX team for putting the visit together.
And perhaps that's the question I will leave you with:
Is a discount to NAV an opportunity, or is it simply a discount until the catalyst arrives?
Rgds,
Dan
https://tinyurl.com/TTP-dan
Disclaimer:
This site visit is meant to provide perspectives and insights into the company from my point of view. so that investors can then made informed decisions. Not a stock recommendation.
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