Far East Hospitality Trust reported Tuesday its second quarter net property income fell 2.4 percent on-year to S$25.12 million as hotel demand faced pressure from economic uncertainty and a lack of major events.
Gross revenue for the quarter ended 30 June fell 2.1 percent on-year to S$27.94 million, the trust said in a filing to SGX.
The distribution per stapled security (DPS) was 0.91 Singapore cent, down 9.9 percent from 1.01 Singapore cents in the year-ago period, the filing said.
“The hospitality operating environment in Singapore experienced softness in corporate demand as ongoing macroeconomic uncertainties weighed on business travel,” Gerald Lee, CEO of the REIT’s manager, said in the statement.
“Additionally, there was an absence of large-scale events in the second quarter of 2019 as compared to the same period last year, a factor which had led to a relatively weaker performance of the hotel portfolio,” he added.
But Lee said the REIT remained positive on industry prospects.
“The more moderate pace of hotel room supply in the coming years will provide opportunities for us to implement strategies to improve the performance of our properties and strengthen the portfolio,” he said.
Average occupancy in the quarter was 88.1 percent for the hotels and 81.9 percent for the serviced residences, compared with 89.8 percent and 83.5 percent, respectively, in the year-ago quarter, the filing said.
Revenue per available room or unit was S$137 for the hotels and S$174 for the serviced residences in the quarter, compared with S$143 and S$168, respectively, in the year-ago quarter, the filing said.
“The serviced residences continued to show overall improvement and a more stabilised performance this quarter. There was a growth in shorter-stay bookings at higher room rates,” the filing said.
For the first half, the trust reported net property income rose 3.0 percent to S$50.19 million on gross revenue of S$55.73 million, up 2.7 percent on-year. The DPS for the first half was 1.82 Singapore cents, down 6.7 percent from 1.95 Singapore cents in the year-ago period, the filing said.
In its outlook, Far East Hospitality Trust pointed to a Singapore tourism board forecast for arrivals to grow 1 percent to 4 percent this year, compared with a 1.9 percent increase in hotel room supply in 2019.
“The expected slower pace of increase in hotel room supply over the next few years will help support the recovery in the Singapore hotel
sector,” the trust said.
Far East Hospitality Trust’s portfolio has 13 properties in Singapore, with 3,143 hotel rooms and serviced residence units, the filing said.
While you’re here, we’re hoping you can help us out.
Shenton Wire has been providing you with quick news and market analysis. But we need your support to continue to bring you the news you’ve come to expect and to expand our reach beyond Singapore.
Your monthly contribution will directly fund our journalism.
You can check your existing account here. You can also contact us about other contribution levels or for corporate subscriptions and syndication queries.