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Far East Hospitality Trust’s gross revenue dipped by two percent year-on-year to $27.46 million in Q3 2017, revealed an SGX filing on Thursday (2 November).
Over the same period, its net property income and distributable income fell by 2.3 percent and 5.4 percent to about $24.77 million and $19.17 million respectively. Consequently, distribution per unit (DPU) declined by eight percent to $1.03 from $1.12 previously.
For the first three quarters of the year, the trust’s gross revenue dropped 4.2 percent to $78.12 million on an annual basis, while net property income and distributable income decreased 4.7 percent and 6.8 percent to $70.04 million and $54.03 million respectively.
As a result, DPU for the nine-month period decreased by 8.7 percent from $3.21 to $2.93.
In particular, the average occupancy rate of its hotels edged up 89.4 percent in Q3 2017 from 88.4 percent in the same period a year ago, while that for its serviced residences slid from 90 percent to 89 percent.
At the same time, the former’s revenue per available room (RevPAR) rose 0.4 percent to $143, while that for serviced residences slid 3.4 percent to $196.
For the first three quarters, the average occupancy of its hotels improved from 87.2 percent to 88.2 percent, while that for serviced residences fell from 86.8 percent to 80.6 percent. In terms of RevPAR, it respectively fell 1.8 percent and 7.5 percent to $137 and $178 on an annual basis.
The weaker RevPAR was “due to the tightening of corporate spending and large increase of hotel supply entering the market which suppressed room rates.”
Looking ahead, the manager of Far East Hospitality Trust expects the increase in hotel supply here will continue to exceed demand in 2017. But inventory growth is forecasted to ease next year after the completion of most new hotels under construction.
“While the rest of the year is likely to remain challenging due to the increased hotel supply coupled with a continuing soft corporate demand, we expect the situation to improve in the near future,” said Gerald Lee, CEO of the trust manager.
Singapore-listed Far East H-Trust comprises Far East Hospitality Real Estate Investment Trust (Far East H-REIT) and Far East Hospitality Business Trust (Far East H-BT), which are respectively managed by FEO Hospitality Asset Management Pte Ltd and FEO Hospitality Trust Management Pte Ltd.
This article was edited by Keshia Faculin.
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