Far East Hospitality Trust's Riverside Village Residences (Photo: REITsWeek)Far East Hospitality Trust's Riverside Village Residences (Photo: REITsWeek)

Singapore-listed Far East Hospitality Trust announced on 27 April that it has achieved a distribution per stapled security (DPS) of 1.08 Singapore cents for its 1Q 2016, a marginal increase of 0.9% over the 1.07 cents paid in 1Q 2015.

Gross revenue for the period was SGD27.4 million, unchanged from the previous quarter. Meanwhile net property income increased by 0.8% to SGD24.7 million and income available for distribution grew 1.3% year-on-year to SGD19.4 million.

“Tourist arrivals into Singapore registered encouraging growth in the first two months of the year”, said Gerald Lee, CEO of the trust’s REIT component's manager. “While leisure traffic showed a healthy rebound, demand from the corporate segment was soft. We remain cautious given the weakness in the macro environment”, he added.

According to the trust, demand for serviced residence accommodation remained soft in 1Q 2016 due to weaker demand from project groups and lower corporate travel budgets. The 1Q 2016 revenue per available unit (RevPAU) of its serviced residence portfolio was SGD188 or 8.7% lower than the corresponding quarter last year.

Average occupancy of its hotels during the quarter was 88%, higher than the 82.3% recorded for 1Q 2015. However average daily rate fell to SGD160 from SGD171 a year ago.

“We are also expecting more hotels to open this year. To stay competitive, we will continue to enhance our assets while seeking opportunities to grow the trust”, said Lee.

The trust’s gearing ratio as at 31 March 2016 was at 32.7% with an average cost of debt of approximately 2.6% per annum and a weighted average debt to maturity of 3.0 years.

Units of Far East Hospitality Trust last changed hands on the Singapore Exchange at SGD0.66.

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.