Advertisement
Singapore markets close in 2 hours 57 minutes
  • Straits Times Index

    3,173.54
    +1.61 (+0.05%)
     
  • Nikkei

    39,859.63
    +119.23 (+0.30%)
     
  • Hang Seng

    16,562.24
    -174.86 (-1.04%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Bitcoin USD

    65,169.14
    -3,485.48 (-5.08%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,149.42
    +32.33 (+0.63%)
     
  • Dow

    38,790.43
    +75.63 (+0.20%)
     
  • Nasdaq

    16,103.45
    +130.25 (+0.82%)
     
  • Gold

    2,160.80
    -3.50 (-0.16%)
     
  • Crude Oil

    82.49
    -0.23 (-0.28%)
     
  • 10-Yr Bond

    4.3400
    0.0000 (0.00%)
     
  • FTSE Bursa Malaysia

    1,550.00
    -3.64 (-0.23%)
     
  • Jakarta Composite Index

    7,344.13
    +41.68 (+0.57%)
     
  • PSE Index

    6,897.49
    +44.20 (+0.64%)
     

Here’s why there’s trouble on the horizon for Far East Hospitality Trust

Competitive pressures persist as supply grows.

Analysts are cautious on Far East Hospitality Trust’s (FEHT) near-term earnings, as competitive pressures are expected to haunt the company in the coming months.

According to a report by DBS, despite the majority of new hotel supply in Singapore largely concentrated within the Singapore River precinct away from FEHT’s hotels, the 6-7% climb in overall industry room inventory may still put pressure on FEHT’s operations.

“We have pencilled in a 4% y-o-y decline in RevPAR and combined with higher costs of debt, should translate into a 7% decline in FY16F DPU,” DBS reports.

ADVERTISEMENT

There’s still light at the end of the tunnel for FEHT, however. Primarily, a rebound in demand absorbing the approximate 3,900 new rooms added in 2016 could provide a boost to FEHT’s DPU.



More From Singapore Business Review