SINGAPORE (Apr 26): The manager of Far East Hospitality Trust (Far East H-Trust) has announced a 1Q18 distribution per stapled security (DPSS) of 0.94 cent, up 1.1% from its DPSS of 0.93 cent a year ago on improved performance across its hotel and serviced residence (SR) portfolios.
Gross revenue for the quarter grew 3.8% on-year to $25.7 million from $24.8 million previously, which was mainly due to an increase in master lease rental from the trust’s hotels and SRs.
Revenue per available room (RevPAR) of the hotel portfolio grew 3.3% to $139 over the quarter due to an increase in average occupancy and average daily rate (ADR) of 1.5 percentage points and 1.6% respectively.
The manager notes that despite the ongoing room renovation at Orchard Parade Hotel, the performance of Far East H-Trust’s hotel portfolio showed overall improvement due to a pick-up in overall demand. It also says there was some uplift from the biennial Singapore Airshow in February 2018.
Meanwhile, the Serviced Residences (SR) portfolio showed y-o-y improvement in performance, with average occupancy having improved 10.1 percentage points to 81.3% although this came at a 5.8% lower average daily ADR of $214 compared to $227.
Correspondingly, revenue per available unit (RevPAU) of the SR portfolio grew 7.6% to $174 in 1Q18. In particular, the manager says corporate demand remained subdued for SRs despite an increase in group bookings.
Revenue from the retail and office spaces however declined over the quarter mainly due to lower rental rates.
In all, net property income (NPI) grew by 4% to $23 million from $22.1 million a year ago.
Finance expenses remained relatively flat on-year at about $5 million compared to $5.1 million in 1Q17.
“We started the year on firmer footing, achieving healthy growth in the revenue of our hospitality portfolio. Demand for hotel accommodation was encouraging, from both corporate and leisure segments, and we expect the performance of the hotel portfolio to balance out the softer outlook of the serviced residences,” says Gerald Lee, CEO of the manager.
“Having completed the renovation at Orchard Parade Hotel ahead of schedule, we are now able to operate with full inventory. We are also looking forward to the contribution from Oasia Hotel Downtown, which has just been added to the portfolio,” he adds.
Units in Far East H-Trust closed flat at 68 cents on Wednesday.
