The income boost came from contributions from Oasia Hotel Downtown.
Far East Hospitality Trust’s (Far East H-Trust) net property income (NPI) edged up 9% YoY to $25.07m from $23.01m in 2018, an announcement revealed. Revenue also grew 8% YoY from $25.72m to $27.79m.
Far East H-Trust’s earnings was boosted by additional contribution from Oasia Hotel Downtown, and an overall increase in master lease rental from the hotels. Its hotels continued to enjoy high occupancies, fuelled by rising visitor traffic to Singapore. Contribution from the corporate segment was lower in the quarter as there were fewer major events, and as companies continued to exercise prudence in their business travel spending.
On the other hand, income available for distribution slipped 1.2% YoY from $17.64m to $17.43m in Q1, translating to a 3.2% decline in distribution per stapled security (DPS) of 0.91 cents from 0.94 cents, with an enlarged base.
The average occupancy of the hotel portfolio was marginally lower YoY by 0.4 percentage points (ppt) at 89.2%, whilst the average daily rate (ADR) was 1.1% higher at $157. As a result, revenue per available room (RevPAR) improved by 0.7% to $140.
According to Gerald Lee, CEO of the REIT Manager, hotels continued to achieve high occupancies, although corporate demand was relatively softer as compared to the same period last year given the absence of major events such as the biennial Singapore Airshow. “The increase in hotel room supply is expected to be moderate in the near future, providing some stability to facilitate a recovery in the sector,” he said in a statement.
Meanwhile, Far East H-Trust’s serviced residences (SR) was more stable, and although demand from the corporate segment remained subdued, there was growth from some industries and other market segments, which helped to relieve downward pressure on ADR. The average occupancy of the SR portfolio decreased 1.1 ppt to 80.2%, and the ADR was higher by 1.3%.
As a result, revenue per available unit (RevPAU) of the SR portfolio was flat YoY at $174. With regard to REIT commercial premises, revenue from the retail and office spaces declined 0.5% YoY to $5.5m in Q1 2019, due to lower rental rates.
As international visitor arrivals to Singapore in the first two months of the year showed a 2% increase and is forecasted to grow by 1% to 4% in 2019, Far East H-Trust said it expects hotel supply to increase by 2.2% with 1,481 new rooms projected to open in 2019.
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