Far East Hospitality Trust Review @ 3 November 2022

Basic Profile & Key Statistics

• Main Sector(s): Hospitality, Retail & Office
• Country(s) with Assets: Singapore
  
• No. of Properties (exclude development/associate/fund): 12

Key Indicators

Performance Highlight

Gross revenue, NPI and income available for distribution increased yoy mainly due to higher income from the hotels segment and probably lower property expenses.

Revenue Per Available Room

Both 3Q REVPAR for hotels and serviced residences have improved yoy.

Asset Enhancement Initiative

The renovation of The Elizabeth Hotel and rebranding to Vibe Hotel Singapore Orchard is completed and re-opened in early September.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: Above median for more than 20%
• Directors of REIT manager's shareholding: Above median for more than 10%

Lease Profile

• WALE: Above median for more than 20%
• Highest lease expiry within 5 years: Below median for more than 20%; Falls in this year
• Weighted average land lease expiry: Below median for more than 10%

Debt Profile

• Gearing ratio: Below median for more than 10%
• Cost of debt: Below median for more than 20%
• Fixed rate debt %: Below median for more than 10%
• Unsecured debt %: 100%
• WADM: ± 10% from median
• Highest debt maturity within 5 years: ± 10% from median; Falls in 2024
• Interest coverage ratio: ± 10% from median

Diversification Profile

• Top geographical contribution: 100%
• Top property contribution: ± 10% from median
• Top 5 properties' contribution: ± 10% from median
• Top tenant contribution: Above median for more than 20%
• Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

• Property yield: Below median for more than 20%
• Management fees over distribution: ± 10% from median; $6.49 distribution for every dollar paid 
• Distribution on capital: Below median for more than 20%
• Distribution margin: Above median for more than 20%

Trends

• Flat: Distribution Margin
• Slight Downtrend: NAV per Unit
• Downtrend: DPU, Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

• Current 52 Weeks Range: 42.9%
• P/NAV: Below Average for 1y & 5y; Average for 3y
• Dividend Yield: Above +1SD for 1y; Above average for 3y; Average for 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low Fixed Rate Debt %
High REIT Sponsor's Shareholding	High Top Geographical Contribution
High REIT Manager's Shareholding	High Top Tenant & Top 10 Tenants Contributions
High Directors of REIT Manager's Shareholding	Low Property Yield
Long WALE	Low Distribution on Capital
No Major Lease Expiry within 5 Years	DPU Downtrend
Low Gearing Ratio	Interest Coverage Ratio Downtrend
Low Cost of Debt	Property Yield Downtrend
100% Unsecured Debt	Distribution on Capital Downtrend
High Distribution Margin

Performance has improved as compared to the previous quarter. With the opening of Vibe Hotel Singapore Orchard coupled with the year-end festive season, FEHT 4Q performance is expected to be a better one. FEHT would distribute the divestment gain from Central Square for approximately $8 million per year which lasts over the next 3 years. For FY22, there is a remaining of $4.2 million which would be distributed for the 2H period.

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SREITs Dashboard - Detailed information on individual Singapore REIT

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REIT Analysis - List of previous REIT analysis posts

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*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 and loss or damage due to 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.