Far East Hospitality Trust (Far East H-Trust) has announced that the income available for distribution for its first reporting period from its date of listing on 27 August 2012 to 31 December 2012 stands at S$33.6 million. The figure has exceeded forecast by 4.5%.

Its Distribution per Stapled Security of 2.09 cents was 4.5% higher than forecast 1. This translates into an annualised distribution yield of 5.7% based on 5 February 2013 closing share price of S$1.05 or 6.5% based on initial public offering price of S$0.93.

Far East Hospitality Trust, Far East H-Trust
Far East H-Trust has attributed its lower than expected gross revenue to a softer performance of its Serviced Residences

However Gross Revenue of S$42.2 million during the period was 0.7% lower than the projected S$42.5 million. Far East H-Trust has attributed this to softer performance of its Serviced Residences, which it said were affected by macro uncertainties in 2H2012 when major companies held back in the face of the European debt crisis and the US Fiscal Cliff. Revenue per available serviced residence unit(RevPAU) was S$204 for FY2012 compared to S$216 that was forecast in the Prospectus.

Its hotel properties however performed better than forecast. While there was pressure on average room rates, resulting in the average revenue per available room (RevPAR) of $171 versus the forecast of $174, higher revenue from the commercial spaces, and the meetings and banquet business helped to offset the lower room revenue.

Net Property Income was 0.2% higher than forecast at S$38.8 million as a result of lower operating expenses. Besides higher revenue from these services, Far East H-Trust has also attributed its higher than expected distribution numbers to its policy of actively managing finance costs and other Trust expenses. Gerald Lee, CEO of the REIT Manager for Far East H-Trust has said that the results for this period reflects the Trust’s resilience despite the tentative economic climate over the last two quarters in 2012.

Outlook for the hospitality sector in Singapore is expected to remain robust as tourist arrivals are expected to grow leading into 2015. Far East H-Trust currently has 11 properties, including Changi Village Hotel and Oasia Hotel, valued at approximately S$2.14 billion.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.