Far East H-Trust sees 8% drop in Q3 DPS on lower revenue from serviced residences

SINGAPORE - Far East Hospitality Trust (Far East H-Trust) posted a lower distribution per stapled security (DPS) of 1.03 Singapore cents for the third quarter ended Sept 30, down 8 per cent from 1.12 Singapore cents a year ago.

For the quarter under review, gross revenue slipped 2 per cent year on year to S$27.46 million on the back of lower master lease rental from the hotels and serviced residences and softer performances from retail and office spaces, the Reit said.

The serviced residences portfolio was also hit by a decline in the average daily rate (ADR), falling to S$159 for third-quarter 2017 from S$161 for third-quarter 2016. Revenue per available unit (RevPAU) of the Reit's serviced residences portfolio also declined 3.4 per cent year on year to S$196 for the the quarter.Net property income fell 2.3 per cent to S$24.77 million.

Meanwhile, income available for distribution slumped 5.4 per cent to S$19.17 million, in line with lower revenue.

Gerald Lee, CEO of the Reit manager said: "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."

Mr Lee said that the trust will continue with its asset enhancement initiatives and drive portfolio performance through accretive investments.

Far East H-Trust's DPS is due to be paid on Dec 15, with the books closure date set on Nov 10.

OCBC Investment Research on Thursday maintained a "hold" rating on the trust, noting that its DPS for the quarter were within expectations.

OCBC said: "Pending further details from the analyst briefing, we maintain 'hold', but place our fair value estimate of S$0.66 under review."The trust was trading flat at S$0.715 as at noon on Thursday.