SINGAPORE (Oct 30): The manager of Far East Hospitality Trust (FEHT) has announced distribution per stapled security (DPS) of 1.04 cents for the 3Q19 ended September, some 1.0% lower than DPS of 1.05 cents a year ago.
The decline was mainly due to an enlarged base, largely as a result of the implementation of the Distribution Reinvestment Plan in the last three quarters.
Income available for distribution rose 1.5% to $20.4 million in 3Q19, from $20.1 million a year ago.
3Q19 gross revenue edged up by 1.2% to $30.9 million, on the back of an improvement in the year-on-year performance of its hotel and serviced residences portfolios.
Revenue per available room (RevPAR) at its hotels remained flat at $152, even as average occupancy improved by 1.6 percentage points to 92.3% during the quarter. However, FEHT’s hotels saw a 2.0% dip in average daily rate to $164 in 3Q19.
The serviced residences recorded a continued improvement in performance this quarter, as revenue per available unit (RevPAU) rose 5.7% to $196, as the average daily rate grew 4.4% to $222. Average occupancy rate at FEHT’s serviced residences crept up by 1 percentage point to 88.2% in 3Q19.
Meanwhile, revenue from FEHT’s commercial component, comprising retail and office spaces, increased marginally by 0.1% to $5.5 million in 3Q19
Property expenses stayed relatively flat at $2.8 million during the quarter.
Consequently, net property income (NPI) climbed 1.3% to $28.1 million in 3Q19, compared to NPI of $27.7 million in 3Q18.
As at end-September, cash and cash equivalents stood at $4.9 million.
Total debt stood at $1.0 billion as at end-September, of which 65.5% was secured at fixed interest rates, up from 54.3% in the same period last year.
The aggregate leverage was 39.6%, and the weighted average debt to maturity was 3.2 years. The average cost of debt was 2.9%.
“Despite facing relatively softer corporate demand amidst a weakened macroeconomic environment, we remain positive about the prospects of the hospitality sector,” says Gerald Lee, CEO of the manager.
“The plans by the Singapore government to further develop major tourist attractions and the more moderate pace of new hotel room supply over the next few years will offer opportunities for strengthening the performance of our portfolio,” he adds.
Looking ahead, the REIT manager says demand for accommodation in Singapore from the corporate segment is likely to remain soft, amid expected weaker economic growth.
It adds that it will continue to focus on the organic growth of its portfolio, improving the performance and competitiveness of its properties amid a recovering hotel sector.
As at 2.53pm, units in Far East Hospitality Trust are trading half a cent higher at 70.5 cents.
