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Far East Hospitality Trust’s (H-Trust) distribution per stapled security (DPS) declined by 6.7 percent to 1.12 Singapore cents for the third quarter compared to the 1.20 cents it recorded in the same period a year ago as hotel rates come under pressure amid uncertainties in the global economy that dampen hotel demand.
The trust’s gross revenue for the period dropped 5.5 percent year-on-year to S$28 million, while net property income fell by 5.8 percent to S$25.3 million compared to the previous year. The declines were attributed to the softer performances of their hotels and serviced residences as well as their retail and office spaces.
Far East H-Trust’s distributable income fell 6 percent to S$20.3 million from S$21.6 million previously.
“The performance of our properties continued to be impacted by the softness in corporate demand and increase in room supply.” said Gerald Lee, chief operating officer of the REIT manager.
Average daily rate (ADR) at the trust’s hotel portfolio declined by 6.9 percent year-on-year despite registering an increase of 1.0 percentage point in average occupancy. Consequently, the hotel portfolio’s revenue per available room (RevPAR) recorded a year-on-year decrease of 5.8 percent to $142. Its serviced residence portfolio held steady during the same quarter and posted slower weakness. The ADR for the serviced residence business slipped 2.5 percent, while the RevPAR declined by 2.7 percent to S$203.
Looking ahead, the trust said while “uncertainties in the macro environment weighed on the demand for corporate travel, impacting room rates across most hotel segments,’ it will continue to drive the performance of its existing portfolio “with a focus on the recently renovated properties.”
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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