Acrophyte Hospitality Trust H2 DPS falls 50.7% to US$0.00418 on reduced portfolio size

[SINGAPORE] Acrophyte Hospitality Trust’s distribution per stapled security (DPS) for the second half was down 50.7 per cent at US$0.00418 from US$0.00848 in H2 FY2024.

The distribution will be paid out on Mar 30 after the record date on Mar 6, reported the stapled group’s managers on Thursday (Feb 26).

Its H2 revenue declined 5.1 per cent year on year to US$80.5 million from US$84.9 million in the year-ago period. Meanwhile, its net property income (NPI) dropped 18.2 per cent to US$19.1 million from US$23.3 million previously.

For the second half, the stapled group recorded a net loss of US$16.6 million, widening from a net loss of US$12.4 million in the same period a year earlier.

The top-line decline came on the back of a reduction in portfolio size due to the disposal of non-core assets and disruptions from brand-mandated renovations at seven of its higher-performing hotels. This resulted in a 5.5 per cent drop in the number of rooms available for sale over the year.

Lee Jin Yong, chief executive officer of the managers, said: “We firmly believe that continuously improving the overall quality of the portfolio is critical to preserving value and enhancing returns to our stapled securityholders.”

With the sale of Hyatt Place Detroit Auburn Hills for about US$6.7 million in September 2025, the stapled group’s portfolio was brought down to 32 hotels from 33, reducing its total number of rooms from 4,315 to 4,188 by the end of the year. The group also entered into conditional purchase and sale agreements to sell two additional non-core hotels – Hyatt Place Detroit Livonia and Hyatt Place Memphis Primacy Parkway – which are expected to close by the end of Q1 2026.

Brand-mandated renovations further interrupted operations during the year. Upgrades at Courtyard San Antonio at The Rim and Residence Inn San Antonio at The Rim were completed in Q3 2025.

Meanwhile, renovations at five other properties – Hyatt House Boston Burlington, Hyatt House Fishkill, Hyatt House Richmond Short Pump, Hyatt House Morristown and Hyatt Place Nashville Opryland –commenced in Q4 and will continue through 2026.

The stapled group’s distributable income after retention for H2 was down 50.7 per cent at US$2.4 million from US$4.9 million in H2 FY2024. Prior to retention, the income available for distribution would have been US$2.7 million.

For FY2025, DPS fell 46.7 per cent to US$0.0085 from US$0.01595 in FY2024.

Revenue fell 6 per cent on the year to US$158.6 million from US$168.8 million. NPI dropped 16.3 per cent to US$37.1 million from US$44.3 million. The full-year net loss widened to US$27.1 million from US$23.7 million in FY2024.

Full-year distributable income retreated to US$4.9 million, down 46.7 per cent from US$9.3 million for FY2024, reflecting the combined impact of portfolio resizing, renovation disruptions and a continued high interest rate environment. Income available for distribution prior to retention was US$5.5 million.

Net asset value per stapled security as at end-2025 fell to US$0.69 from US$0.73 as at end-2024. Excluding the disposed hotel, the valuation of its 32-hotel portfolio decreased slightly by 0.8 per cent to US$714.9 million by end-2025, compared with US$721 million a year prior.

For FY2025, portfolio occupancy rose slightly to 69.4 per cent from 68.7 per cent. Net gearing rose to 41 per cent from 39.1 per cent, and the aggregate leverage ratio increased to 42.8 per cent from 41.6 per cent. Weighted average debt maturity as at Dec 31, 2025, stood at 1.2 years compared with 1.5 years as at Dec 31, 2024.

US hospitality outlook

While the US economy sustained moderate growth, the lodging market decoupled from the broader economy and experienced a difficult 2025. Revenue per available room (RevPAR) for the US lodging industry declined by 0.3 per cent for the year.

Economic headwinds, trade and immigration policy changes, mass layoffs at federal agencies, and a federal government shutdown suppressed business, government and international travel demand.

Concurrently, a softening job market, with unemployment ticking up to 4.4 per cent, led to tighter consumer spending and increased price sensitivity in the leisure segment, said the managers.

Lee said: “Despite a challenging macroeconomic backdrop and softer lodging demand and pricing across the US in 2025, we maintained our focus on portfolio optimisation and disciplined capital management.”

He added: “We will continue our asset management initiatives to focus on improving market share capture and operational efficiencies amid challenging market conditions.”

Units of Acrophyte Hospitality Trust closed flat at US$0.255 on Wednesday.