Far East Hospitality Trust Q1 net property income up 6% at S$25.1m

FAR East Hospitality Trust’s (FEHT) net property income rose 6 per cent year on year to S$25.1 million for the first quarter ended March, from S$23.7 million in Q1 FY2023.

Gross revenue was up 7.5 per cent at S$27.1 million versus S$25.2 million last year as contributions from the hotels and commercial premises segments “continued to grow strongly”, said its managers on Tuesday (Apr 30).

Growth from these segments more than offset a 2 per cent yearon-year decline in gross revenue contributions from serviced residences, where average occupancy decreased 3.7 percentage points due to the expiration of long-stay contracts in the earlier part of the quarter.

FEHT’S managers said the serviced residences segment has since secured new contracts which boosted occupancy to a level comparable to the previous year.

Average daily rates (ADRS) for serviced residences grew 2.9 per cent to S$265, though revenue per available unit was 1.5 per cent lower at S$221.

Within the hotels segment, occupancy declined 1.5 percentage points to 80.4 per cent as some of the portfolio’s hotels exited government contracts in March, October and December 2023.

The managers said these properties had greater flexibility in securing higher ADRS, resulting in an 8.8 per cent year-on-year increase to S$179.

Revenue per available room grew 6.7 per cent to S$144 as a result.

As at end-march 2024, total assets were 0.9 per cent lower at S$2.6 billion versus end-2023, while net assets fell 1.4 per cent to S$1.8 billion.

Net asset value per stapled security was 1.5 per cent lower at S$0.915 versus S$0.929 as at Dec 31, 2023.

The managers highlighted FEHT as one of the lowest-geared Singapore real estate investment trusts at 31.5 per cent gearing, with a weighted average debt maturity of 3.5 years and interest coverage ratio of 3.5 times.

Citing upcoming tourism developments and data that points to a recovery in both tourism and the macroeconomic environment, the managers said their outlook in these respects was “positive”.

Stapled securities of FEHT ended Tuesday unchanged at S$0.615.