Basic Profile & Key Statistics
Performance Review
Lease Profile
- WALE is long at 10.02 years
- Highest lease expiry within 5 years is low at 8.5% which falls in this year.
- Weighted average land lease expiry is moderate at 62.33 years
Debt Profile
- Gearing ratio is slightly high at 40.9%
- Cost of debt is low at 2.4%
- Fixed rate debt % is low at 60.3%
- All debts are unsecured debts
- WADM is short at 2.3 years
- Highest debt maturity within 5 years is low at 24.1% which falls in this year
- Interest coverage ratio is low at 2.4 times
Diversification Profile
- All properties are located in Singapore
- Top property contribution is slightly low at 18.6%
- Top 5 properties contribution is low at 55.4%
- Top tenant contribution is high at 14.7%
- Top 10 tenants contribution is high at 76.5%
Key Financial Metrics
- Property yield is low at 2.7%
- Management fees over distribution is high at 19.8% in which unitholders receive S$ 5.05 for every dollar paid
- Distribution on capital is low at 1.8%
- Distribution margin is high at 57.2%
Trends
- Downtrend - DPU, NAV per Unit, Interest Coverage Ratio, Property Yield, Distribution on Capital, Distribution Margin
Relative Valuation
- Dividend Yield - Past 4 quarters DPU @ 2.41 cents / average yield @ 6.14% = S$ 0.395
- Price/NAV - NAV @ S$ 0.79 x average P/NAV @ 0.72 = S$ 0.57
Author's Opinion
| Favorable | Less Favorable |
|---|---|
| Diversified Factor | Short WADM |
| Long WALE | Low Interest Coverage Ratio |
| No Major Lease Expiry within 5 Years | 100% Top Geographical Contribution |
| Low Cost of Debt | High Top Tenant & Top 10 Tenants Contribution |
| 100% Unsecured Debt | Low Property Yield |
| Well Spread Debt Maturity | Non Competitive Management Fees |
| Low Top 5 Properties Contribution | Low Distribution on Capital |
| High Distribution Margin | DPU Downtrend |
| NAV per Unit Downtrend | |
| Interest Coverage Ratio Downtrend | |
| Property Yield Downtrend | |
| Distribution on Capital Downtrend | |
| Distribution Margin Downtrend |
In view of COVID-19 vaccination started over the world, potential travel bubbles arrangement between Singapore and other countries as well as the easing of restriction from 5 Apr, the Singapore hospitality sector performance is expected to pick up. FEHT also continues to benefit from its master leases which the high fixed rent accounted for 77% of FY 2020 gross revenue.
On 23 March, FEHT announced that it received outline advice from URA regarding the redevelopment of Central Square (Village Residence Clarke Quay). There is no conclusion from the manager at this moment, one of the possible options would be divestment.
For more information, you could refer to:
SREITs Dashboard - Detailed information on individual Singapore REIT
SREITs Data - Overview of Singapore REIT
REIT Analysis - List of previous REIT analysis posts
REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF or SREITs Data Excel
REIT Investing Community - Facebook Group where members share and discuss REIT topic
*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.
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