Far East Hospitality Trust (FEHT) has posted 1QFY2021 ended March distributable income of $12.5 million, down 1% y-o-y from $12.7 million previously.

Net property income (NPI) for the period was $18.2 million, down 8.4% y-o-y from $19.9 million the year before. 

The lower NPI and distributable income follow lower revenue reported for the 1QFY2021, which fell 6.9% y-o-y to $21.3 million on the back of  lower occupancies in the trust’s serviced residences, as well as rental assistance given to tenants at the commercial premises. 

The smaller decline in distributable income was due to lower finance expenses of $5.6 million (-21.4% y-o-y)  for the quarter from lower short-term interest rates as well as dip in the manager’s fee due to lower value of deposited property.

For FEHT’s hotel portfolio, average occupancy for the 1QFY2021 showed a 10.8 percentage point increase from the year before to 76.1%, driven by bookings from companies securing accommodation for workers as well as government bookings for isolation purposes.

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However, the bulk bookings resulted in an average daily rate of $66 for the quarter, 54.2% lower y-o-y from $144. This resulted in revenue per available room (RevPAR) of $51, down 45.7% y-o-y from $94 previously.

For FEHT’s serviced residences, average occupancy fell 8.9 percentage points y-o-y to 74.7% for the 1QFY2021 as border restrictions restricted inbound travel. To that end, the average daily rate fell 12.2% y-o-y to $187, resulting in RevPAR falling 21.3% y-o-y to $140 from $178 previously.Nonetheless, the manager of FEHT says that support from long-stay corporate sources, which made up 79% of the segment revenue, helped to minimise the negative impact of the pandemic and kept the service residences performing above fixed rent.

Cash and cash equivalents stood at $7.1 million as at March 31.

In terms of its outlook for the rest of the year, the manager is upbeat on ongoing vaccination drives which may boost travel in the second half of the year, as well as the ease in restrictions for meeting, incentive, convention and exhibition (MICE) events to up to 750 attendees.

However, they also note that ongoing travel restrictions will “continue impacting demand” in the near term and expect continued support from government bookings and long-stay corporate contracts.

In terms of its current and upcoming pipeline, FEHT plans for asset enhancement works at The Elizabeth Hotel and Orchard Rendezvous Hotel. The manager is also discussing “various options” for the Central Square rejuvenation project, in which FEHT was issued an Outline Advice by the Urban Development Authority earlier this year.

Units in FEHT closed 1 cent or 1.6% higher at 63.5 cents on April 29.