Far East Hospitality Trust (SGX:Q5T) reported 2H22 revenue and NPI of S$42.6m (+2.2% y-o-y) and S$39.9m (+2.3% y-o-y), respectively. On a same-store basis, NPI would have increased by 10.5% y-o-y, but was set back by
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The Elizabeth Hotel’s renovation and rebranding in 2H22.
This brings full-year revenue and NPI to S$83.6m (+0.4% y-o-y) and S$77.3m (+2.9% y-o-y), respectively.
Income available for distribution rose 7.5% y-o-y to S$59.0, on the back of lower finance expenses and distribution of capital gains from the Central Square divestment.
Far East Hospitality Trust's FY22 DPU rose 24.3% y-o-y to 3.27 cents, in line with estimates of of 3.24 cents.
Hotel segment: Reaping fruits of past year’s AEIs
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The lower occupancy was due to the exit of government contracts on full 100% occupancy, which tapered off on a y-o-y basis.
Most of the recovery was seen in the second half of the year, which saw a 93% y-o-y increase in RevPAR to S$116 (led by a 99% y-o-y increase in ADR as opposed to occupancy). This narrows the gap against the variable rent threshold for FEHT at ~S$125 (RevPAR basis) across the portfolio.
Government contracts were also renewed at higher rates, which are now in four assets (two hotels, two serviced residences) from our understanding, and will be expiring in mid-2023. RevPAR for Vibe Hotel (rebranded from The Elizabeth Hotel) grew 64% to S$92 post launch in November last year.
A total of three assets across the portfolio have received master leasevariable rents including one asset that is still held under government contract.
Serviced residences segment: Buoyed by tight room supply
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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