The difficulties facing the hospitality market are likely to persist into the next year, but Singapore's position as a key regional hub brings hope, according to a leading industry executive yesterday.
Ms Eu Chin Fen, chief executive of Frasers Hospitality Trust's real estate investment trust (Reit) manager, said: "We're still facing headwinds with an increased supply, and the Singdollar is really strong, although it has shown some signs of weakening."
She added in a phone briefing that Singapore is not considered cheap relative to other markets, but she is confident of its status as a key hub.
"We have been able to attract about 15 to 16 million tourist arrivals. I think we will still be seeing numbers of this level, so it's not a situation where we are seeing tourist arrivals significantly declining year on year," said Ms Eu, who was speaking at the release of the trust's fourth-quarter results.
Frasers Hospitality Trust posted a distributable income of $22.5 million, 1.9 per cent less than forecast.
Net property income for the three months to Sept 30 was $25.7 million, 3 per cent above forecast.
Distribution per unit (DPU) was 1.66 cent, 1.2 per cent below forecast.
Distributable income for the 12 months to Sept 30 was $93.7 million, while net property income was $105.7 million, and DPU for the year was 7.56 cents. There are no comparative figures as the trust was listed on July 14 last year.
The Reit manager said the lower distributable income and DPU were owing to heftier interest expenses as the trust had a higher proportion of fixed-rate loans in the quarter.
It added: "Strong showing of the Japan, Australia and Britain properties balanced the softer performance of the Singapore and Malaysia properties."
Serviced residence Fraser Suites Singapore did well with high occupancies, said the manager, but InterContinental Singapore was affected by ongoing renovation. Although fewer rooms were available, the hotel achieved nearly 90 per cent occupancy, based on the available rooms.
Ms Eu said InterContinental Singapore will be "a completely new, repositioned product" with a focus on luxury by February next year, when renovations are completed.
She said the hotel will have about 70 per cent of rooms back and ready for guests by tomorrow, with the rest to be ready in the next three months. Public spaces will be renovated by the end of next month, and almost 80 per cent of the rooms will be ready then.
Ascott Residence Trust (Ascott Reit) released its third-quarter results yesterday, posting a 21 per cent rise in revenue to $113.2 million.
Distributable income to unitholders for the three months to Sept 30 came in at $32 million, which the Reit said included a one-off item of about $1.2 million.
This was related to interest costs incurred on $250 million worth of perpetual securities issued in June.
DPU was 2.07 cents, down from 2.11 cents a year ago, but excluding the one-off item, the DPU would be 2.15 cents.
Mr Lim Jit Poh, chairman of the manager, said six properties were acquired in Australia, Japan and the United States in the quarter. He said: "With Ascott Reit's entry into the US, we are seeing maiden contribution from our property in Times Square of New York in this quarter.
"Recently, we also divested six rental housing properties in the regional cities of Japan for 4.5 billion yen (S$52 million)."
He noted that the hospitality Reit has an asset value of $4.7 billion.
Once the upcoming acquisition of a Cairnhill development is complete, Mr Lim said, "Ascott Reit's asset size will grow to $5.1 billion, putting it well on track to achieve our target asset value of $6 billion by 2017".
Frasers Hospitality Trust units closed half a cent higher at 77.5 cents yesterday, while Ascott Reit units closed half a cent lower at $1.215.