Is CDL Hospitality Trust A Good Buy In 2026? [Fundamental Analysis]

Daniel Lee
Aug 5
6 min read

In this article, we'll conduct a fundamental analysis and review of CDL Hospitality Trust and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having high capital preservation ability.

Information Is Accurate Up To March 2025

Business Description

CDL Hospitality Trust is a hospitality REIT that was listed in 2006 and owns multiple hotels worldwide.

What I Like About CDL:

The portfolio is well-positioned and diversified globally.
Strong sponsor provides stability and opportunities for future acquisition and capital recycling.

What I Do Not Like About CDL:

A large share of the distribution per unit is supported by non-operational items such as management fees paid in units. This makes valuation difficult as the intrinsic value based on operational performance alone is quite different from the intrinsic value derived from the reported performances. (Figure 7)

Updates From Recent Performance (FY 2025)

General Comments:

Full year NPI fell by 4.1% y.o.y due to a more competitive environment in their key markets which led to a broader RevPAR moderation coupled with a temporary disruption from large-scale renovations at W Hotel & Grand Millennium Auckland. As a result, DPU from operations fell by 12.31% while reported DPU fell by almost 10%.
In November 2025, CDLHT established a S$1.5 billion Multicurrency Debt Issuance Programme, providing a scalable and flexible framework for future capital raising. Under this programme, H-REIT raised S$250.0 million through two tranches of perpetual securities with proceeds applied to repay existing borrowings. As a result, gearing has fallen even though the overall effective debt remained relatively unchanged.

Positive Headwinds:

Completion of AEI is expected to bring an uplift in the operating performances which should increase the DPU of FY2026.
Committed forward acquisition of Moxy Singapore Clarke Quay is expected to be the next leg of growth contribution post 2027. This is likely only to be seen in FY2028 performance.

Negative Headwinds:

Increasing global uncertainty and a higher inflationary environment may result in lower global mobility/leisure travelling which may impact on the occupancy, daily rate and RevPAR of the hospitality sector moving into FY2026.

Portfolio Movements

No acquisitions completed and no divestments executed during FY2025.

Every completed acquisition in the current cycle (Hotel Indigo Exeter, Benson Yard, The Castings) closed in FY2024 or earlier. The only live acquisition is a forward purchase (Moxy Singapore Clarke Quay) signed back in 2020 and not completing until 1H2027. FY2025 portfolio activity was therefore almost entirely asset enhancement (AEI) — three major refurbishments that suppressed, rather than grew, FY2025 income.

Asset Enhancement Initiative

Property (Market)	Scope of work	FY2025 disruption (hard data)	Outcome / positioning
W Singapore – Sentosa Cove (SG)	Phased renovation of ALL guestrooms; earlier lobby, ballroom & restaurant upgrades	13,179 room-nights out of order (works from 10 Feb 2025). Ex-OOO occupancy 80.2% vs 79.6%; ex-OOO RevPAR S$184 vs S$196. W was ~40% of the 1H2025 NPI decline (Maybank/DBS).	Guestroom programme complete; repositioned in luxury-lifestyle segment ahead of intensifying competition
Grand Millennium Auckland (NZ)	Public-area upgrades, atrium bar, TWO phases of room renovation; earlier ballroom, ADR restaurant, lobby lounge	26,904 room-nights out of order (Apr–Dec 2025) vs 25,829 in FY2024. NPI −22.0% yoy (reported); −8.2% ex straight-line rent accounting; −2.3% in local-currency cash terms. Ex-OOO RevPAR NZ$149 vs NZ$153.	Multi-year transformation concluded; asset “better positioned” as NZ tourism recovers (arrivals ~90% of 2019)
Ibis Perth (AU)	Extensive room renovation (completed early/Feb 2025)	1,922 room-nights OOO in FY2025 vs 10,483 in FY2024 (disruption now behind it). Collective Perth ex-OOO RevPAR A$155 vs A$131.	Renovated rooms returned to inventory; helped drive Perth Hotels RevPAR +24.9% and NPI +31.3% yoy — the portfolio standout
Studio M Hotel (SG) — prior-year ref.	Room upgrading incl. progressive A/C replacement (FY2024 works, for comparison)	10,155 room-nights OOO in FY2024 (context for the W comparison; not an FY2025 programme)	Completed pre-FY2025; included to explain the year-on-year Singapore inventory bridge

Analytical Commentary

The AEI programme is the single biggest reason FY2025 DPU fell. Management's own framing is candid: excluding W Hotel and Grand Millennium Auckland, full-year NPI would have grown 0.3% (and +6.3% in 2H2025) versus the reported −4.1%. In other words, the operational business ex-renovation was roughly flat-to-improving; the refurbishments did the damage.
The Ibis Perth result is the proof-of-concept. It is the one programme far enough past completion to show the payoff: with renovated rooms back in inventory, Perth delivered +24.9% RevPAR and +31.3% NPI. That is the template management is implicitly asking investors to extrapolate to W and Auckland in FY2026–27. The logic is credible — but Perth also benefited from a strong events calendar, so not all of the uplift is renovation-driven.
Watch the accounting overlay at Auckland. The headline −22.0% NPI is flattered downward by a non-cash straight-line rent adjustment; the cash decline was −2.3% in local currency. This cuts both ways for a careful investor: the operational hit was smaller than the headline suggests, but it is a reminder to always read CDLHT's NPI through the accounting notes rather than at face value.
Post-report confirmation (external). 1Q2026 data corroborate the recovery thesis: Singapore RevPAR +6.6% yoy (S$184 vs S$173), occupancy up to 80.4% from 75.0%, and NPI +5.9%, aided by the Singapore Airshow 2026 and the completed W works (Minichart / company update, Apr 2026). Encouraging, but one quarter — and management has already flagged the next round of AEI (M Hotel, Copthorne King's), so the disruption cycle is not over.

Independent Market Review Analysis

Performance v.s. Benchmark

Market	Market RevPAR trend (per review)	CDLHT RevPAR (FY2025)	Verdict	Why
Singapore	~flat (rate −1%, occ +1pp)	−6.2%	Underperforming	W Hotel renovation drag + high 1H24 base (Swift/Coldplay)
Perth	+8.7%	+24.9%	Outperforming — on recovery base	Ibis rooms returned post-reno + strong events; not a pure market beat
Auckland	−2.2%	−3.0%	In-line (both weak)	HIGH-supply market; reno works Apr–Dec compounded
Maldives	+8.1%	−10.0%	Underperforming(severely)	The Halcyon rebrand −33.7%; asset fell as market rose
Japan (Tokyo)	strong (inbound +)	+8.7%	In-line / Outperforming	Record inbound ADR/RevPAR; genuine strength
UK (hotels)	+2.0% (Cambridge)	−1.2% (collective)	Underperforming (marginal)	Softer leisure + muted corporate; Manchester supply looming
Munich	+4.8% (€98→€103)	−3.2%	Underperforming	Softer H2 events calendar vs a rising market
Florence	↓ (ADR −5%, occ −3pp)	−11.8%	Underperforming a falling market	Fell faster than an already-declining market

In 6 of 8 hotel geographies, CDLHT underperformed the market RevPAR trend its own review describes.

Japan is the only clean outperformance; Perth’s +24.9% is a recovery from a renovation-suppressed base plus an events calendar, not a structural market beat. The review’s market data does not explain CDLHT’s FY2025 RevPAR weakness — asset-specific factors (renovations, the Maldives rebrand, high base effects) do. That is the correct read: the DPU decline is idiosyncratic and self-inflicted, not a market collapse.

Supply Risk Map

Market	Review supply signal	CDLHT exposure (% FY25 NPI)	Risk level for CDLHT
Singapore	+2.0% CAGR pipeline; rate softening	59.4%	MODERATE — but it is 60% of income
UK hotels	Manchester ~7%, Cambridge ~9 projects	12.0%	Moderate–High
UK living (BTR+PBSA)	Structural undersupply; pipeline uplift	6.3%	Low–Moderate
Germany (Munich)	~8% by 2030	5.6%	Moderate
Australia (Perth)	No 2025 additions; ~8% by 2027	4.4%	Low
Japan (Tokyo)	~2.1% pipeline	3.7%	Low
New Zealand (Auckland)	+48% since 2019; +6% more	3.1%	HIGH
Maldives	Disciplined; 2025 supply down	3.0%	Moderate (asset stress, not supply)
Italy (Florence)	Moratorium caps growth	2.5%	Moderate

Computed exposures. Only ~11.2% of NPI (Perth 4.4% + Japan 3.7% + Maldives 3.0%) sits in markets the review shows as clearly tight/rising on both occupancy and rate. ~5.6% (Auckland 3.1% + Italy 2.5%) sits in markets the review’s own data shows as softening. The dominant 59.4% (Singapore) is defensible on supply but softening on rate. Single most supply-exposed asset: the Manchester hotels (Lowry) — a ~7% city pipeline landing into the near-term, against short-WALE management-contract income.

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