專門投資Data Centre的Keppel DC Reits

筆者發現這隻新加坡上市的Keppel DC Reits (AJBU)幾特別，是亞太區第一隻專注投資於Data Centre(數據中心)的房地產投資信託基金。它的領域包括主機託管，設施齊全的周邊和核心裝置。公司13個data centre均位中心樞紐。如Gore Hill Data Centre，S25；T25；Citadel100 Data Centre；iseek Data Centre；GV7 Data Centre，Basis Bay和Almere Data Centre。資產主要位於澳洲，英國，德國，意大利，馬來西亞，新加坡和愛爾蘭。
作為分散行業及地域風險，除了主流的商場、寫字樓、酒店、工業，物流、醫療reits外，數據中心也算是擁有穩定收益的選擇！現息率約5%，預計息率6.1%。現價SGD$1.22

詳細資料請參閱Keppel公司網址連結

以下是OCBC的研究報告：
OCBC Investment Research has reiterated a ‘Buy’ rating on Singapore-listed Keppel DC REIT, citing growth potential in the demand for data centre properties.
This demand is underpinned by expected increases in data creation, and outsourcing, said the bank in an investment report on 3 April.
Citing figures from information consulting company BroadGroup, OCBC noted that this demand is expected to grow at a compound annual growth rate (CAGR) of between 4.7% to 14.7% in key cities that Keppel DC REIT is exposed to from 2016 to 2021.
In addition, OCBC also looks upon favourable on Keppel DC REIT’s weighted average lease expiry (WALE) of 6.9 years, making it one of the most defensive REITs in Singapore, the firm opined.
“Based on our forecasts, [Keppel DC REIT] is offering distribution yields of 6.1% and 6.3% for FY17F and FY18F, which is attractive relative to its peers’ Bloomberg consensus average yield of 3.8% and 4.1%, respectively”, said OCBC.
The bank has maintained a fair value estimate of SGD1.39 on the data centre REIT.

15 things learned from Starhill Global REIT’s FY2016 AGM

By Adam Wong on November 1, 2016

Starhill Global REIT (SGX:P40U) owns retail and office properties in Singapore, Malaysia, Australia, China, and Japan. Among its properties, Singaporeans would be very familiar with two of Starhill’s retail malls –  Ngee Ann City and Wisma Atria along Orchard Road.

Starhill is one of my REIT investments when I purchased it in January this year when Singapore REIT prices took a pounding. It has since returned over 17.7% (including dividends). But, regardless of how positive returns are at the moment, you can be sure that I and the rest of us here at The Fifth Person are keeping a watchful eye on our investments and the prevailing economic climate.

So with the recent news that Singapore’s mall vacancies are at their highest level in a decade, I attended Starhill Global REIT’s recent FY2016 AGM to find out more about how its management planned to navigate the increasingly tough retail conditions.

Here are 15 things I learned from Starhill Global’s FY2016 AGM:

• At first glance, Starhill’s FY2016 results look like they took a tumble. Revenue, net property income (NPI), and distribution per unit (DPU) are all down 25-30%. However, the reason for the drop is because Starhill moved the end of its fiscal year to June. Which means FY2015 figures are calculated over 18 months while FY2016 figures are over 12 months. So if you compare FY2016 with the previous 12-month period, Starhill actually performed better: Gross revenue increased 11.4% to $219.7 million, NPI increased 6.9% to $170.3 million, and DPU increased to 1.4% to 5.18 cents. Starhill’s current yield (TTM) is 6.4%.
• Growth in revenue and NPI was mainly driven by Myer Centre Adelaide which Starhill acquired for A$288 million in 2015. Starhill’s Australia portfolio revenue and NPI grew 120% and 89% respectively. In comparison, Starhill’s Singapore portfolio remained flat with revenue and NPI inching up 1% and 0.6% respectively. Overall, Singapore still contributes the bulk of revenue at 62.6%. Australia and Malaysia contribute 19.5% and 14.6% respectively.
• Starhill Global REIT was one of the first few to venture into Australia in 2010. CEO Ho Sing explained that Australia’s retail scene is “quite strange”. Major retail brands like Uniqlo, Zara, and H&M only entered Australia in 2013-2014 with many major brands yet to enter the country. He believes that this along with changing consumer behavior presents an upside for the retail market in Australia.
• Starhill Global REIT divested its property in Japan, Roppongi Terzo, for ¥2.5 billion.The management also plans to divest the rest of its Japanese properties eventually. The CEO said that Tokyo Olympics in 2020 might drive valuations up and the management will look for divestment opportunities leading up to the Olympics.
• Portfolio valuation grew 0.7% to $3.14 billion. This was mainly due to revaluation gains in the REIT’s Singaporean and Australian properties which were offset by the Roppongi Terzo divestment in Japan and portfolio devaluations in China and Malaysia (due to forex loss).
• Overall occupancy rate is 95.1%. CEO Ho Sing also highlighted the fact that Starhill’s occupancy rates have remained largely resilient even during recessions. During the financial crisis of 2008, Starhill’s Singapore portfolio retail occupancy rate was 98.3%, while its office occupancy rate was 92.4%. Moving forward, there is no new retail or office supply in Singapore’s Orchard Road area from 2016 to 2018.
• Starhill Global REIT’s gearing is at 35% and average cost of debt is 3.09%. Weighted debt to maturity is 3.1 year with a large portion of debt (35% of total debt; $400 million) due to mature in FY2017/2018. 100% of Starhill’s debt is fixed/hedged via a combination of fixed rate debt, interest rate swaps, and interest rate caps.
• A unitholder asked why the REIT’s Malaysia revenue was falling. Chairman Tan Sri Dato (Dr) Francis Yeoh explained that it was due to the weakening ringgit. Lot 10 in Kuala Lumpur is on a master lease with built-in rental reversions for the next three years and that the mall is, in fact, doing well. Lot 10 is located at the prime Bintang Walk area which the Malaysia government has earmarked as a key shopping destination for locals and tourists. The government is also building an MRT station in Bintang Walk which will open right in front of Lot 10 and bring 100 million people in ridership annually. While currency deprecation is a problem, the chairman said “we can’t play God’s role” and control which way foreign exchange rates will go. However, the quality of the asset will endure and revenues will increase.
• Another unitholder asked about the management’s strategy for Starhill Gallery in Kuala Lumpur. The chairman replied that Starhill Gallery is a large luxury mall with over 300,000 square feet of retail space. However, there are not enough good luxury brands to fill the mall entirely, thus the management is looking to bring in restaurants and other brands like Apple to attract more blended shopper traffic. On the plus side, the management has convinced Louis Vuitton to build a global store in Starhill Gallery; the only other cities to have a Louis Vuitton global store are Paris, Shanghai, and Tokyo. Major property developments are also being built opposite Starhill Gallery including the headquarters of YTL Corporations (Starhill Global REIT’s sponsor). The chairman admitted that the property is “not (doing) as good as we want it to be” but it will get better.
• A unitholder questioned the management about Starhill’s falling revenues in China. The chairman explained that the Chinese market is extremely competitive. In Chengdu (where Starhill’s Renhe Spring Zongbei property is located), 100 million square feet of new malls were built after Starhill acquired its property. The chairman joked, “When the Chinese build, they build massively and (properties) spring up like mushrooms, and our prime property becomes ‘not-so-prime’ anymore.” He also said that another trend that is hurting sales is the clampdown on corruption and gift-buying. Businessmen in China used to buy gifts as a way of doing business in the past but it is looked upon as corruption now. The good news is that the management has managed to secure one of the largest furniture retailers in China, Markor International Home Furnishings, as an anchor tenant for Renhe Spring Zongbei which will generate more stable revenues. The chairman revealed that he doesn’t think the retail situation in Chengdu will improve and the REIT will look to divest its Chinese property at the right time.
• A unitholder asked where Starhill Global REIT was planning to acquire its next properties. The chairman replied that the REIT will focus on Singapore, Malaysia, and Australia as these are the three markets they know very well. Starhill was ahead in Australia and the management predicted correctly that retail closing hours would extend later (from 5 p.m. to 7 p.m.) due to the growing Asian population and their shopping habits. For Singapore and Kuala Lumpur, the high-speed rail will be good for Starhill’s properties in both cities.
• A unitholder asked what the management planned to do to attract shoppers to its malls. CEO Ho Sing replied that the management is working with relevant agencies like the Orchard Road Business Association to promote events in Orchard Road. He gave examples like the Japan Matsuri Summer Festival where Orchard Road was closed to traffic, the annual Christmas light-up, and the F1 race. The CEO also mentioned the Great Singapore Sale though he said the concept has gotten tired over the years. The chairman then reassured unitholders that the management is aware of the changing spending patterns of customers and online shopping, and doing all it can to attract shoppers. The retail experience has to be crafted better now and be compelling enough to attract people to physically visit a mall, and it is in the interests of the REIT to enhance the sales of its retailers so they can pay higher rents.
• In his presentation, the CEO highlighted that Starhill Global REIT doesn’t own the space occupied by Isetan in Wisma Atria; it belongs to Isetan. The space was closed for renovations for a year which affected shopper traffic in the mall. It has since progressively opened and Isetan also launched Japan Food Town which has improved shopper traffic. During the Q&A, the chairman revealed that he was trying to persuade the Isetan president to launch an All-Japan concept in Wisma Atria that received positive response from shoppers when it was launched in Lot 10, Kuala Lumpur. He mentioned things like Honda robots and ikebana classes that attracted shoppers in Malaysia and he brought this back to his point about creating unique and compelling retail experiences for shoppers. If this concept was executed in Singapore, it would complement the mall and be very good for Wisma Atria without the REIT having to spend any money.
• A unitholder asked if the management was considering an investment in Jurong due to the Singapore-Kuala Lumpur high-speed rail (HSR). The chairman joked that the HSR was his idea but he doesn’t know if the government will pay him a royalty for it! He then digressed and said that Kuala Lumpur, long-term, is a good market where property prices are still attractive. If Malaysia can get its politics rights, Kuala Lumpur would be a compelling city to invest in. He said condominium prices in Kuala Lumpur are, prime-to-prime, 600% cheaper compared to Singapore. But the level of architects is the same and the building materials come from Malaysia anyway! With the HSR, the chairman views that KL prices will converge toward Singapore’s in time like how prices in London and Paris converged with the London-Paris line. The unitholder keenly asked the chairman if he would invest in Kuala Lumpur then. The chairman said yes but currency depreciation is a concern and the management has to take a long-term view of whether a property will be yield-accretive over 5-10 years after taking that into account.
• Finally, a unitholder then asked the chairman what his views were on the Singapore property market moving forward. The chairman replied that he has been through many property cycles as a property developer himself but that this particular cycle was ‘broken’. The Singapore government had to control property speculation and inflation here like in China. The worry for the government at the time was that average Singaporeans were complaining that they couldn’t afford a home. Due to the printing of money by foreign governments, foreign buyers with an influx of cash speculated on private properties driving their prices up — which, in turn, pulled HDB prices up. The government had to introduce cooling measures to cut the speculation because, even though they welcome foreign investment, they didn’t want Singaporeans to suffer from sky-high property prices. However, the chairman thinks that the government has overdone the cooling measures and the market is almost dead for foreign buyers. He shared that a lot of property developers are in trouble and face heavy penalties of $30-40 million if they can’t sell their developments on time. But they have no market to sell to. He views that the government should readjust its policies to encourage more economic activity and he is optimistic that the government is watchful and that they won’t fall asleep on this. The chairman revealed that the high-end property market is the worse he has ever seen in the last few years and feels that it can’t get any worse. If it does, there will be collateral problems with banks and loans which he believes the government will take into account and not allow to happen. Lastly, he advised everyone to be patient and that the change won’t be immediate, but it is his personal view that it will become better than what it is today.

我在IB的新加坡房託組合

筆者經過兩個月時間，初步建立了自己的新加坡房託收息組合。收到第一次的派息，大都集中在八月份，沒有任何扣減稅項。新加坡房託多是每季派息，三個月收息一次，眨眼間又是下次收成期，很有滿足感覺。頻繁派息，令人不太介意每日股價上落，只要不是跌太多就可以了。這段期間，組合不計派息輕微增長了3%，算是意外收獲！期間利息支出只佔股息收入2成不到！IB的報表詳盡，很清楚列出要付的利息及應收的股息，方便核對。我的S reits的借貸比率是60%，並未用盡，有15%buffer！借的是坡紙，買的是新加坡資產，對沖了大部份匯率風險。IB的操作很暢順，用message centre提出問題也覆得快，解決很多初期的不明白。上手了都幾好玩！期間有少許不如意事就是Mapletree Commercial Trust供股，海外股東無得供，卻又不能買賣供股權，見財化水，透過IB和基金經理交涉，海外機構投資者可以供，散戶則不能，平白損失了機會。供股價是S$1.41，正股價是S$1.52😞！猶幸供股後股價沒有回落，還升了不少(S$1.63)，也算是有安慰😊！這段時間花了很多時間學習操作IB，筆者太太有輕微怨語，少了時間和她談心😊希望以後熟習後可以少花時間在操作上，多享受家庭之樂。

9 things learned from Mapletree Commercial Trust’s 2016 EGM

By Adam Wong on August 2, 2016
文章連結

On 5 July 2016, Mapletree Commercial Trust (SGX: N2IU) (MCT) announced a proposed acquisition of an office and business park property, Mapletree Business City (MBC), for a purchase consideration of $1.78 billion. This will be MCT’s second acquisition since its IPO.

As a unitholder myself, I attended the extraordinary general meeting MCT held immediately after itsFY2016 AGM to find out more details about the proposed acquisition and to vote on the proposed resolutions.

Here are 9 things I learned from Mapletree Commercial Trust’s 2016 EGM:

1. MCT is acquiring Phase 1 of MBC

MCT is acquiring Phase 1 of MBC which comprises an office tower and three business park blocks. Phase 1 was completed in April 2010 while Phase 2 of MBC is currently under development and is due for completion this year. The leasehold for MBC (Phase 1) is 80 years till 2096.

2. Total acquisition cost is $1.86 billion

The purchase consideration is $1.78 billion which is a 2.3% and 2.8% discount to DTZ’s and Knight Frank’s independent valuation of MBC respectively. The total acquisition cost, however, is $1.86 billion after including acquisition fees paid to the manager ($8.9 million paid in units), stamp duty to the government ($53.4 million), and estimated professional fees and expenses ($16.2 million).

3. Acquisition is NAV and DPU accretive

The acquisition is expected to be accretive for net property income (NPI) yield, NAV, and distribution per unit (DPU). NPI yield will increase from 5.1% to 5.2%. NAV per share will increase to $1.31 and DPU will rise from 4.14 cents to 4.27 cents.

4. Exposure to the Alexandra/HabourFront office market

The management views MBC as a strategic addition to its portfolio. The property is of the largest integrated office and business park complexes in Singapore. It is located 10 minutes from the central business district (CBD) and directly connected to Labrador Park MRT station.

It attracts tenants who wish to be located near the CBD without having to pay sky-high rents. The Alexandra/HabourFront area offers rents which are 28.8% and 8.5% lower than Grade-A and Grade-B Core CBD offices respectively. Average office rent at MBC is $6.14 per square foot per month.

Historically, prime office rents in Alexandra/HabourFront are also less volatile resilient than Grade-A and Grade-B Core CBD office rents.

5. Exposure to growing business park segment

Mapletree Business City is the closest business park to the CBD and the growing demand for business parks is evident in MNCs like Google, American Express, HSBC, Nike, SAP, Samsung and Unilever relocating from the CBD to MBC.

Singapore business park rents are also extremely stable compared to office rents and there is no new business park supply expected until 2020. Average business park rent at MBC is $5.88 per square foot.

6. Committed occupancy rate is at 99.0%

MBC is a large property with a total net lettable area (NLA) of 1,708,218 square feet comprising 420,544 square feet in offices and 1,287,674 square feet in the business park. Even so, occupancy levels as at 30 April 2016 is 97.8%, while the committed occupancy rate is 99.0%. Weighted average lease expiry is 3.5 years and 97.5% of leases have average annual rental step-ups of around 3%.

7. Acquisition to be financed by a combination of debt and equity

MBC’s total acquisition cost of S$1.86 billion will be funded by loan facilities of up to $920 million and an issue of up to 795 million new units via a private placement to institutional investors and preferential offering to existing unitholders.

8. Some unitholders had questions and concerns

One unitholder felt that the acquisition was not in the interest of minority unitholders. He agreed that MBC was a good asset but thought that the acquisition price was too high and, as a result, the DPU accretion too low. He questioned why the management had to make the acquisition at this point in time when the office sector is soft and suggested that the deal might be better suited when the office sector improves.

Chairman Tsang Yam Pui expressed surprise at the unitholder’s view as many investors have long asked when MBC would be acquired by MCT. Tsang explained that an asset of MBC’s quality is hard to find and would be very expensive in the open market. The fact that MCT is able to acquire the property at a price that allows for DPU and NAV accretion is a positive for unitholders. The property would also give good organic growth in the long run. The chairman also said that a good time to acquire a good asset is when you can get it at the right price. In the case of MBC, MCT is already acquiring it a discount to the valuation set by two independent valuers.

Another unitholder asked if the supply of nearby office properties like Alexandra Technopark and Fragrance Building (formerly NOL Building) would affect MBC. CEO Sharon Lim replied that in the next four years, only 4% of office leases at MBC are expiring in FY2018/19. Furthermore, the quality of an asset like MBC is a world of difference compared to the rest.

A unitholder jokingly asked if the sale of MBC was being ‘forced’ onto MCT by its sponsor Mapletree. The Chairman reassured the unitholder that the acquisition is a case of a willing buyer and a willing seller. But he noted that the deal is a related party transaction which is why the management has gone through the procedure of obtaining independent valuations and the transaction scrutinized by its independent directors.

9. The proposed acquisition was voted through

The proposed acquisition of MBC was approved at the EGM with 95.51% of votes in favor of the resolution. MCT has since announced they plan to raise $529.1 million from the private placement and $515.2 million from the preferential offering.

Current unitholders are entitled to 17 new units for every 100 existing units at an issue price of $1.42 per unit. The issue price is an 8.4% discount to MCT’s last traded price of $1.55 (as at 1 August 2016). Unitholders can also apply for excess units. Books closure date is 3 August 2016 at 5:00 p.m.

文章‘’12 things Learned from Ascendas Hospitality Trust’s FY2016 AGM‘’的讀後感

文章的作者親身參與Ascendas hospitality Trust(AHT)的股東週年大會，並將所見所聞記下來，對了解這隻reits很有幫助。新加坡的房託基金投資地域不僅限於星加坡，更遍布全世界。AHT 80%的投資在澳洲、日本、中國等地方的酒店。這對分散地域風險很有幫助！這幾年日本的酒店業務增長不俗，增長達23%。值得大家注意！(筆者考慮直接投資日本酒店房託)，會後的股東答問也提供了有用訊息，原來新加坡房託不能直接經營業務(operational business),只能有被動收入(passive income)，所以AHT另外就另外成立了business trust經營業務和酒店發展。現時只有2間酒店under reit，其餘的9間under business trust.待發展成熟後就轉移到reit那邊。這叫做stapled security.即把2隻不同運作原理的信託‘’釘‘’在一起，以達致最好投資效益！這令筆者不期然拿香港的房託作比較，香港的房託雖然也有十幾年歷史，但發展相對落後很多，無論在經營策略，範圍，投資選擇等都很局限，盼望政府能主動研究引導房託的發展，從新加坡政府學習，在政策及法規上扶助房託業務的發展，使香港整體房託跟上世界潮流，才不辜負世界金融中心這美譽！

以下是該文章：

By Adam Wong on July 11, 2016 article link

 Hospitality Trust (SGX: Q1P) (A-HTrust) is a stapled group comprising Ascendas Hospitality Real Estate Investment Trust and Ascendas Hospitality Business Trust. The group invests in and manages a portfolio of hospitality properties across Asia Pacific.

The author attended the trust’s most recent AGM to find out more about its prospects in the face of a weakening global economy and flat tourism sector in some countries.

Here are 12 things I learned from Ascendas Hospitality Trust’s FY2016 AGM:

• A-HTrust’s portfolio comprises 11 hotels across seven cities in four countries – Singapore, Australia, China, and Japan. The trust’s entire portfolio is worth $1.5 billion – an increase of 11% year-on-year. Australia accounts for the largest proportion at 41% but the trust’s exposure down under is spread out evenly among six properties. The trust’s largest property, Park Hotel Clarke Quay in Singapore, accounts for 21% of the portfolio.
• A-HTrust’s current yield is 7.55%. The figure is near the trust’s historical low yield in 2015. Its historical high yield is 9.22% in 2013.
• Gross revenue and net property income (NPI) increased in same currency terms but decreased 5.3% and 2.7% respectively in Singapore dollar terms. This was mainly due to a weaker Yen and Australian dollar. Australia accounted for the largest proportion of NPI at 54.5% while Japan saw the largest increase in NPI year-on-year at 13.2%.
• Master leases accounted for 37.5% of NPI. The management revealed it aims to have master leases account for at least 50% of NPI for longer-term stability.
• Distribution per stapled security rose 6.9% year-on-year despite 5% retention of income by the trust. The increase was mainly due to a $2 million contribution from the divestment proceeds of a property – Pullman Cairns International.
• Average occupancy rates, average daily rates and revenue per available room (RevPAR) were all largely flat year-on-year in Australia and China. Only Oakwood Apartments Ariake Tokyo in Japan saw a large increase in RevPAR year-on-year at 23.3%. The rest of the trust’s properties are anchored by master lease agreements.
• A-HTrust’s gearing ratio decreased to 32.7% from 37.2% a year ago. As far as possible, the trust aims to borrow in the local currency where its properties are located to achieve a natural hedge. So for example, Australia accounts for 41% of the portfolio and, accordingly, 42.5% of the trust’s debt is in Australian dollars. To minimize exposure to interest rate volatility, 91.2% of borrowings are at fixed interest rates.
• Australia and Japan are seeing steady growth in international tourist arrivals. Australia saw 6.9 million tourists visit the country in 2015 – an 8% growth from the previous year. Japan saw even better numbers with 19.7 million tourists – a 47% growth from the previous year! International arrivals in Japan are forecasted to reach 40 million in 2020 with the Olympics being held in Tokyo that year. On a side note, one shareholder remarked that he thoroughly enjoyed his stay in one of A-HTrust’s recently refurbished hotels, Hotel Sunroute Osaka Namba, and recommended everyone to give it a try if in Osaka.
• Singapore and Beijing’s international arrivals remain flat. Singapore only saw 1% growth in tourist arrivals in 2015. While the flat tourist numbers will drag the trust’s performance in Singapore, Park Hotel Clarke Quay is anchored by a master lease with a high proportion fixed income paid to the AH-Trust. Beijing’s international arrivals have been falling from 5.2 million in 2011 to 4.2 million in 2015 – one of the reasons being the city’s bad air pollution. However, China’s domestic travel remains robust; 269 million domestic travelers visited their country’s capital in 2015 which has been growing at 7% per annum since 2011.
• A-HTrust has partnered with NASDAQ-listed Chinese hotel operator Huazhu Hotels Group to operate the trust’s Beijing hotels and tap on their local experience and knowledge in the Chinese market. Huazhu manages/operates over 2,700 hotels in 352 cities in China and has over 49 million members in its loyalty programme. CEO Tan Juay Hiang mentioned that Ibis Beijing Sanyuan has gotten good traction from Huazhu’s loyalty programme and is expecting good results from the partnership moving forward.
• In November 2015, A-HTrust announced that it received an expression of interest from an undisclosed party to acquire the entire trust. The management hired appointed a slew of advisors – JP Morgan, Wong Partnership, KPMG Corporate Finance, and Ernst & Young – to provide financial, legal and tax advice on the viability of the proposal. In the end, the board decided not to proceed with the transaction because they believed it was not in the best interests of shareholders. One well-known local activist investor was not impressed and questioned why so many high-powered advisors were needed to consider a non-binding expression of interest and which party bore the cost of the advisors. The CEO replied that the cost was borne by the trust. Another shareholder pressed to know the total costs involved and the CEO revealed that it was the region of $600,000. A number of shareholders then voiced their displeasure with the board that so much money was wasted for an exercise that eventually amounted to nothing.
• Our activist investor asked why the trust decided to structure itself as a stapled security: a REIT and a business trust. He pointed out that there are tax benefits for REITs – when a REIT pays out at least 90% of distributable income to unitholders – and questioned why A-HTrust would place only two hotels under its REIT and the other nine hotels under its business trust. He carried on to say that most stapled securities use a business trust to undertake property developments (where REITs have a limitation), after which they move the property to the REIT to be more tax efficient. The CEO replied A-HTrust has a stapled structure because a REIT in Singapore is only allowed to earn passive income (rent) and is not allowed to have an operational business. For A-HTrust, some of its hotels are not under a master lease and run on management contracts instead – and therefore can’t be placed under the REIT. In other words, the trust operationally runs the hotel business for some of its hotels. The CEO continued and said that while running a hotel operation means taking on more business risk compared to a master lease, there is also an upside when demand and room rates increase.