SINGAPORE (July 31): The manager of Far East Hospitality Trust (Far East H-Trust) has declared a Distribution per Stapled Security (DPS) of 1.01 cents for the 2Q18 ended June. 4.1% than the DPS declared a year ago.
Gross revenue rose 10.2% to $28.5 million. Net property income was 11.2% higher at $25.7 million and income available for distribution was 5.8% higher at $19.0 million.
For 1H18, gross revenue was 7.1% higher at $54.3 million and net property income was 7.7% higher at $48.7 million. Income available for distribution was $36.6 million or 1.95 cents per stapled security compared to 1.90 cents a year ago.
Revenue per available room (RevPAR) of the hotel portfolio grew 6.9% year-on-year to $143 in 2Q18 due to an increase in average occupancy and average daily rate (ADR) of 2.7ppt and 3.7% respectively. There was some uplift from major events such as Food & Hotel Asia in April and CommunicAsia in June, as well as the addition of Oasia Hotel Downtown to the portfolio.
The serviced residence (SR) portfolio continued to face softness in corporate demand in 2Q 2018. While the average occupancy of the SRs improved 2.0ppt, the ADR was 6.8% lower year-on-year. As a result, revenue per available unit (RevPAU) of the SR portfolio fell 4.5% to $168 in 2Q18.
Revenue from the retail and office spaces declined 3.8% year-on-year to $5.5 million in 2Q18.
As at June 30, the total debt was $1.03 billion, of which 46.9% was secured at fixed interest rates. The aggregate leverage was 40.3%, and the weighted average debt to maturity was 3.3 years. The average cost of debt remained at about 2.5%.
In its outlook, Far East H-Trust says the operating environment for hotels in Singapore shows signs of stabilisation. However, the environment remains competitive as companies continue to be cautious with their corporate travel expenditure.
Meanwhile, Far East H-Trust’s serviced residences, which mainly serve corporations, are expected to experience a continued lag in demand, as corporate and relocation activities remain subdued. To ensure the portfolio’s competitiveness, the REIT manager will continue to focus on driving the performance of each property, and improving the value of its offerings.
Units in Far East H-Trust closed at 68 cents on Monday.
