Far East Hospitality Trust hit by competition

SINGAPORE (Aug 1): Religare Institutional Research has cut Far East Hospitality Trust to a hold recommendation, with a lower target price from 69 cents to 64 cents, after the trust had a “non-performing quarter”.

Pang Ti Wee, Religare’s analyst, said in a note on Monday that FEHT’s 2QFY2016 revenue and distribution per unit had respectively achieved 22% and 21% of his full-year estimates, “on the back of continual soft corporate demand and lower room rates amid stiff competition”.

He noted that occupancy in its hotel portfolio had dipped by 1.4% due to strong visitor arrivals. However, average room rate fell 6.1% y-o-y, resulting in a 7.5% decline in revenue per available room of $136.

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