Far East Hospitality Trust

Quarz Capital’s Havard Chi is maintaining his preference for Far East Hospitality Trust — a pick he flagged in the previous forum. FEHT, which owns nine hotels and four serviced residences, is set to benefit from a slowdown in the growth of new supply of hotel rooms in Singapore, which is nudging up room rates.

From a recent peak of $166 in 2013, revenue per available room dropped to $135 in 2017. However, RevPAR has started recovering and is seen to reach $143 by end-2018 and to further increase to $153 in 2020, says Chi. The recovery has come about because of the drop in the number of new rooms coming on stream. From 3,430 new rooms in 2013, the number will reach a low of 702 this year, and increase to 1,481 and 823 rooms in 2019 and 2020 respectively.

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