Far East Hospitality Trust's 2H FY23 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue, NPI and the income available for distribution increased YoY mainly due to higher income from hotels, serviced residences and commercial premises.

Revenue per Available Room

REVPAR has been on the rise for both hotels and serviced residences since the reopening of borders in April 2022. Hotel REVPAR has bounced back to 95% of pre-COVID levels, while REVPAR for serviced residences is significantly higher than pre-COVID levels.

Related Parties Shareholding

REIT sponsor, manager and directors of the REIT manager hold a relatively high proportion of shares.

Lease Profile

WALE is long with no major lease expiries in the next 4 years. However, the weighted average land lease expiry is relatively short.

Debt Profile

Overall, the debt profile is favorable, although there is a low proportion of fixed-rate debt.

Diversification Profile

The portfolio lacks diversification in terms of geography and tenants.

Key Financial Metrics

The operating distributable income margin is high. However, property yield, operating distributable income on capital, and operating distribution proportion are relatively low. Additionally, distribution from divestment is also on the high side.

DPU Breakdown

• TTM Distributable Income Breakdown:
• 78.5% from Operation
• 11.5% from Management Fees Paid in Units
• 10%  from Divestment Proceeds
• TTM DPU = 98.4% of Distributable Income

Trends

• Uptrend: DPU from Operation, Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin
• Slight Uptrend: NAV per Unit, Property Yield

Relative Valuation

• Dividend Yield - Average for 1y & 3y; Above +1SD for 5y
• P/NAV - Average for 1y, 3y & 5y

Author's Opinion

As compared to the previous quarter, the visitor arrivals and REVPAR declined in 4Q resulting in a decrease in gross revenue, NPI and distribution. Nonetheless, the 2023 visitor arrival has recovered to more than 70% of pre-COVID level. For debt, there is no refinancing requirement in 2024. 

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

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REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.