Results slightly ahead — For 1Q09, distributable DPU came in at 2.18cents, down 24%. Excluding the $1.7m retained for working capital purposes, DPU of 1.97cents was 28% of consensus FY09 estimate of 7.1cents and 33% of our estimate of 6cents. NPI was down 21%yoy largely due to the fall in RevPar.

SG Hotel performance — Compared to a year earlier, average occupancy for the Singapore Hotels fell from 84.4% to 74.8% while ARR fell 18.6% from $247 to $201. As a result, RevPar fell a hefty 27.7% to just $150 in 1Q09 compared to $208 last year. Novotel Clarke was the best performer with revenue falling just 10% yoy and Copthorne King the worst, falling 33%.

Secures $350m loan for refinancing — CDLHT has secured a new S$350m bank facility to refinance all of its S$297m borrowings, maturing in July 2009. The new 3-year facility consists of a S$270m term loan and a S$80m committed revolving credit facility. The interest rate for the new facility is the Singapore dollar swap offer rate plus interest margin of 2.60% per annum.

Maintain Sell, TP $0.48 — We have raised our earnings slightly to reflect the lower than expected interest cost. The current swine flu outbreak is adding more woes to the already weak hospitality sector. Operating environment is highly uncertain and we maintain our SELL recommendation on CDL H-REIT.