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Far East Hospitality Trust posts 3Q21 NPI of $18.3 mil

Atiqah Mokhtar
Atiqah Mokhtar10/29/2021 08:11 AM GMT+08  • 3 min read
Far East Hospitality Trust posts 3Q21 NPI of $18.3 mil
Income available for distribution was $13.5 mil, 12.5% higher y-o-y.
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Far East Hospitality Trust (FEHT) has reported gross revenue of $20.76 million for the 3QFY2021 ended September, 0.7% higher than the $20.62 million reported a year ago.

The marginally higher revenue was underpinned by higher revenue for commercial premises due to lower rental rebates, which offset the decline in revenue from services residences due to lower demand. Revenue from hotels stayed flat at the fixed rent level.

Net property income (NPI) for 3QFY2021 came in at $18.32 million, up 2.6% y-o-y from $17.85 million previously.

See: Market has not priced in FEHT's potential divestment of Central Square: CGS-CIMB

Meanwhile, income available for distribution was $13.52 million, 12.5% higher y-o-y, mainly driven by lower finance expenses due to lower fixed rates from newer interest rate swap contracts.

On a year-to-date basis as of end-September, FEHT recorded gross revenue of $62.3 million, 3.9% lower y-o-y, due to lower revenue from serviced residences and commercial premises.

NPI for the period stands at $54.5 million, 3.4% lower y-o-y. However, income available for distribution amounts to $38.8 million, up 3% y-o-y, due to lower finance expenses and REIT manager’s fees.

During the 3QFY2021, FEHT’s hotels' portfolio average occupancy fell 18.1 percentage points y-o-y to 79.2% as more companies that required accommodation for their Malaysian workers looked for alternative arrangements to reduce cost.

The average daily rate (ADR) was 4.3% lower y-o-y at $66 due to lower rates from government contracts and companies requiring accommodation for their workers. Consequently, revenue per available room (RevPAR) declined by 22.4% y-o-y at $52.

For services residences, average occupancy fell 15.3 percentage points to 71.8% during the 3QFY2021, driven by a decline in demand from companies requiring temporary accommodation for their foreign workers due to the border closures. Nonetheless, the SRs continued to perform above the fixed rent level.

Serviced residences ADR fell 1.1% y-o-y to $178, while revenue per available unit (RevPAU) fell 18.5% y-o-y at $128.

Looking ahead, FEHT sees the new vaccinated travel lanes (VTLs) as “a step in the right direction”. Singapore has announced VTLs with 13 countries which will allow quarantine-free travel for fully vaccinated travellers to and from Singapore. FEHT poinst out that countries on the VTL contributed 21.8% of total visitor days in 2019.

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FEHT also notes that despite strict travel restrictions remaining for key inbound markets such as China, India, Indonesia and Philippines, increasing levels of vaccinations bode well for more potential VTLs.

Units in FEHT closed flat at 63.5 cents on Oct 28.

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