SINGAPORE (Oct 30): The manager of Far East Hospitality Trust (Far East H-Trust) has declared a 3Q18 DPS of 1.05 cents, 1.9% higher than a year ago, thanks to another quarter of growth for its hotel sector.
Gross revenue rose 11.1% to $30.5 million for 3Q18. Net property income was 11.8% higher at $27.7 million and income available for distribution was 4.8% higher at $20.1 million.
In the first nine months of 2018, net property income came in 9.1% higher at $76.4 million while DPS was 2.4% higher year-on-year at 3.00 cents.
The hotels showed a year-on-year improvement in performance in 3Q18. Revenue per available room (RevPAR) of the hotel portfolio grew 6.6% year-on-year to $152 in 3Q18 with ADR growing by 5.1% over 3Q17.
Far East H-Trust’s manager says with the addition of Oasia Hotel Downtown to the portfolio and the improvement in performance by the recently renovated Orchard Rendezvous Hotel -- formerly known as Orchard Parade Hotel -- there has been an uptick in overall market demand on the broader front.
Its serviced residences (SRs) portfolio continued to face downward pressure on ADR, although the occupancy gap that impacted trading in the first two quarters was narrowed in 3Q18. The average occupancy and ADR in 3Q18 were 1.8pp and 3.4% lower year-on-year respectively. As a result, revenue per available unit (RevPAU) of the SR portfolio declined 5.4% to $186 in 3Q18.
In its outlook, the manager says the operating environment for hotels in Singapore continues to trend in a positive direction with visitor arrivals growing by 7.5% year-on-year in the first eight months of 2018, and a more moderate increase in new hotel room supply of 1.1% this year.
“The outlook for Far East H-Trust’s serviced residences remains subdued as the long-stay market continues to be impacted by room rate pressure from corporate accounts, a tight foreign labour policy and a greater availability of home-sharing options,” says the manager.
Year to date, units of Far East H-Trust are down nearly 17% to 60 cents at Monday’s close.
