Far East Hospitality Trust reports 1HFY2024 DPS of 1.96 cents, 2.1% higher y-o-y

Felicia Tan
3-min read

The higher DPS was due to a higher NPI and distribution of other gains.

Far East Hospitality Trust has reported a distribution per stapled security (DPS) of 1.96 cents for the 1HFY2024 ended June 30, 2.1% higher y-o-y.

Gross revenue rose by 3.4% y-o-y to $53.8 million due to higher master lease rental from the hotels and serviced residences, as well as higher revenue from the trust’s retail and office spaces.

Average occupancy for the hotels improved by 2.1 percentage points to 80.4% as more hotels continued to “ramp up” after exiting the government contracts in 2023. The average daily rate (ADR) for hotels grew by 3.7% y-o-y to $176 due to events and large-scale performances in the 1QFY2024. Revenue per available room (RevPAR) increased by 6.4% y-o-y to $141.

ADR for serviced residences for the six-month period increased by 4.9% y-o-y to $266 partly due to a higher proportion of short-stay leisure travellers booking at higher rates. However, average occupancy fell by 3.2 percentage points to 85.1% due to some unexpected group departures earlier in the year. Revenue per available unit (RevPAU) rose by 1.0% y-o-y to $226.

Revenue for the retail and office spaces was up by 7.3% y-o-y to $8.6 million, with both spaces seeing higher average occupancies and rental rates.

Net property income (NPI) inched up by 1.0% y-o-y to $49.5 million due to higher gross revenue but offset by higher finance expenses.

Income available for distribution fell by 9.3% y-o-y to $33.9 million due mainly to higher interest expenses.

However, distribution to stapled security holders rose by 2.7% y-o-y to $39.5 due to higher NPI and other gains. The distribution includes $2.2 million to cushion the impact from higher interest expenses and $4.0 million from the divestment gain of Central Square.

The REIT manager, on July 28, 2023, said it planned to use a portion of the $18.0 million incentive fee received in March 2023 from the divestment of Central Square to cushion any impact from possible higher interest expenses. The REIT manager also committed to distribute a portion of the gains from the divestment of Central Square over three years. The divestment was completed in March 2022, netting the trust a gain of some $8.0 million.

“All segments of the portfolio continued to grow in the first half of 2024, driven by leisure demand alongside the recovery of international visitor arrivals. While NPI has improved, income available for distribution was primarily affected by higher interest expenses. Nonetheless, we are pleased to report that our DPS has increased through support initiatives undertaken since 2022,” says Gerald Lee, CEO of the manager.

“With the various strategic portfolio enhancements and prudent capital management, the trust is well positioned to ride on the growth of the Singapore hospitality sector, notwithstanding the potential impact of the strong Singapore dollar which may moderate the expected pace of growth,” he adds.

As at June 30, cash and cash equivalents stood at $28.5 million, down from $64.3 million in the same period the year before.

Unitholders will receive their distributions on Sept 5.

Units in FEHT closed 1 cent higher or 1.6% up at 63.5 cents on July 29.

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