Frasers Hospitality Trust's Hotel Intercontinental Singapore.Frasers Hospitality Trust's Hotel Intercontinental Singapore.

Singapore-listed Frasers Hospitality Trust announced on 29 April that it has achieved a distribution per stapled security (DPS) of 1.33 Singapore cents for its 2Q 2016, a fall of 3.6% compared to the 1.38 cents paid in the corresponding period of the previous financial year.

The trust has attributed the fall mainly to an enlarged number of stapled securities.

Distributable income for the period saw a year-on-year increase of 10.5% to SGD18.4 million from SGD16.6 million in 2Q 2015. Correspondingly gross revenue and net property income (NPI) for 2Q 2016 increased by 12.5% and 17.3% to SGD27 million and SGD22 million respectively.

“The increases in gross revenue, NPI and distributable income were mainly due to the addition of Sofitel Sydney Wentworth to Frasers Hospitality Trust’s portfolio since July 2015 but were partially offset by the weaker performance of its London properties and InterContinental Singapore”, said the trust in its statement on the quarter’s results.

“While our Sydney and Kobe properties did well in the second quarter, our London properties have experienced weakness since the November Paris attacks”, said Eu Chin Fen, CEO of the trust’s REIT component’s manager. “At the InterContinental Singapore, performance was affected by renovation works. Although they were fully completed in end-February, our strategy to reposition the hotel is likely to take longer than expected under current market conditions”, she added.

As at 31 March 2016, Frasers Hospitality Trust’s total debt was SGD797.2 million with gearing at 39.3% and total cost of debt at 2.6% per annum.

For the quarters ahead, the trust has indicated that it remains optimistic on the prospects of its properties in Australia, UK and Japan but warned that revenue from its Singapore and Malaysia properties face downward pressure due to softening economies in the respective countries and an increase in the supply of hotel rooms.

Units of Frasers Hospitality Trust last changed hands on the Singapore Exchange at SGD0.82.

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.