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FEHT's full-year DPU rebounds for first time since IPO as Sentosa hotels open

Goola Warden
Goola Warden3/25/2019 07:30 AM GMT+08  • 8 min read
FEHT's full-year DPU rebounds for first time since IPO as Sentosa hotels open
(Mar 25): Far East Hospitality Trust (FEHT) reported a distribution per unit of four cents for FY2018, up 2.6% y-o-y. In 4QFY2018, DPU rose 3.1% y-o-y to one cent. This was the fourth consecutive quarter that DPU showed a y-o-y increase. Last year was the
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(Mar 25): Far East Hospitality Trust (FEHT) reported a distribution per unit of four cents for FY2018, up 2.6% y-o-y. In 4QFY2018, DPU rose 3.1% y-o-y to one cent. This was the fourth consecutive quarter that DPU showed a y-o-y increase. Last year was the first time since the real estate investment trust’s IPO in 2012 that full-year DPU grew y-o-y (see chart). Last year’s DPU is still below the one recorded in 2016, but it appears likely to continue its glacial growth this year and next.

FEHT owns nine hotels and four serviced residences valued at $2.63 billion. It also holds a 30% stake in a Sentosa hotel project.

The negative demand-supply metrics that have affected FEHT’s performance since its IPO appear to be over for now. To recap: As soon as FEHT was listed, the supply of hotel rooms in Singapore ballooned. Based on statistics released by hotel, tourism and leisure consultancy firm Horwath HTL, there were 54,962 hotel rooms in Singapore as at end-2013. By end-2018, Singapore had 67,131 hotel rooms, or a compound annual growth rate of 4.1% over a five-year period. Between 2013 and 2017, CAGR was higher at 5.1%. The number of rooms is projected to rise by 1,481 this year and 823 next year.

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