The analysts also point to geographical diversification as another key reason to the re-rating of FEHT, citing the resulting room for expansion in investable markets and acceleration of inorganic growth.
CGS-CIMB Research analysts Natalie Ong and Lock Mun Yee have noted Far East Hospitality Trust (FEHT) (SGX:Q5T
) reported a historical five-year P/B of 0.73x at a 20.9% discount to the P/B of its hospitality peers CapitaLand Ascott Trust (CLAS) of 0.91x, CDL Hospitality Trust (CDREIT) of 0.91x and 11.1% to Frasers Hospitality Trust (FHT) of 0.81x.
“We think that the discount relative to its peers could be due to FEHT’s comparatively smaller market capitalisation, lower free float, lack of diversification and comparatively fewer acquisitions,” says Ong and Lock.
