- We uphold our BUY rating for Far East Hospitality Trust and maintain our DDM-based Far East Hospitality Trust's target price of S$0.75. Additionally, we have revised our FY24e/25e DPU estimates downward by 3% and 4%, respectively, to 4.09 and 4.13 cents.
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
The Positives
Healthy hotel ADR growth.
- ADR has been insulated from the downward industry trend thanks to a lower base in FY23 when several hotels operated under government contracts at below-market ADR. With all Far East Hospitality Trust's hotels now off government contracts, ADR rose by 4.2% y-o-y to S$180 in 3Q24, while occupancy dipped slightly by 1.2ppt to 85.5%. RevPAR increased by 2.8% y-o-y in 3Q24 to S$154.
- Forward bookings for 4Q24 appear healthy as Christmas and New Year’s bookings are coming in, and we expect hotel revenue to return to growth, given the absence of one-off income in 4Q23 and positive ADR growth trend.
- Far East Hospitality Trust is actively working to ramp up hotel occupancy, with Village Hotel Changi being the only property yet to return to its standard occupancy rates. We anticipate occupancy will continue to improve with the effort of attracting more Free Independent Traveler (FIT) and tour groups.
Resilient performance from Services Residence and Commercial segment.
- Read more at SGinvestors.io.
