Far East Hospitality Trust (FEHT) has reported a gross revenue of $28.7 million for the 3QFY2024 ended Sept 30, 4.8% lower y-o-y. This was mainly due to the absence of one-off revenue from its hotels that were contracted for isolation purposes in the year before.
Gross revenue for hotels fell by 8.2% y-o-y to $21.4 million while serviced residences (SR) and FEHT’s commercial premises reported higher revenues of $3 million and $4.3 million, 3% and 9.9% higher y-o-y respectively. Commercial premises, in particular, benefitted from higher retail occupancies and rental rates. Excluding the effect of the one-off revenue in 3QFY2023, FEHT’s hotels would have seen growth on a y-o-y basis. Its gross revenue would have been up by 3.9% y-o-y.
On the back of the lower revenue and higher property taxes, net property income (NPI) fell by 6.8% y-o-y to $26.2 million.
During the 3QFY2024, FEHT’s hotels reported an average occupancy of 85.5%, 1.2 percentage points lower y-o-y while their average daily rate rose by 4.2% y-o-y to $180 as hotels enjoyed greater flexibility in pricing after exiting the government contracts. Hotels’ revenue per available room (RevPAR) rose by 2.8% y-o-y to $154.
SRs reported an average occupancy of 88%, 0.7 percentage points lower y-o-y while ADR rose by 3.3% y-o-y to $278. Revenue per available unit (RevPAU) for the quarter was up by 2.5% y-o-y to $245.
In the 9MFY2024, gross revenue inched up by 0.4% y-o-y to $82.6 million. Hotels revenue fell by 1.4% y-o-y to $61.1 million due to the absence of non-recurring revenue from hotels contracted for isolation purposes in the previous year. Excluding the one-off revenue, the hotels segment would have seen a y-o-y increase, with total revenue increasing by 6.7% y-o-y.
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SR revenue for the 9MFY2024 rose by 2.4% y-o-y to $8.5 million while commercial premises increased by 8.1% y-o-y to $13 million.
9MFY2024 NPI fell by 1.8% y-o-y to $75.7 million from lower revenue and higher property taxes.
As at Sept 30, FEHT reported an aggregate leverage of 30.8%, down from the aggregate leverage of 32.2% as at Sept 30, 2023, and making the REIT one of the lowest geared Singapore REITs (S-REITs). FEHT’s interest coverage ratio (ICR) as at Sept 30 stood at 2.9 times.
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Looking ahead, FEHT sees a positive outlook for tourism and the macroeconomic environment with further catalysts driving visitor arrivals to Singapore. Growth in the global economy is expected to remain stable and interest rates are deemed to have peaked following the recent rate cuts by the US Federal Reserve.
Units in FEHT closed at 62.5 cents on Oct 29.
