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Eagle Hospitality Trust posts Q3 DPU of 1.649 US cents

EAGLE Hospitality Trust's (EHT) distributable income (DI) for the three months ended Sept 30 was US$14.4 million, down 1.2 per cent from the US$14.5 million projected at the point of listing, the real estate investment trust (Reit) announced on Wednesday.

Distribution per unit (DPU) for the third quarter was 1.649 US cents, 1.3 per cent lower than the 1.67 cents that was forecast.

The Reit manager said that the forecast misses were mainly due to lower revenue, which was US$21.5 million or 10.6 per cent lower than the US$24.1 million projected in the Reit's initial public offering (IPO) prospectus.

The factors contributing to the lower revenue were macroeconomic headwinds and a drop in demand at its largest asset in Florida due to a Category 5 hurricane threatening the state. Q3 rent from the Holiday Inn Resort Orlando Suites – Waterpark hotel declined US$0.6 million from forecasts, representing about 4.2 per cent of the forecasted DI for the period.

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Net property income came in at US$20.1 million, or 2.7 per cent less than the US$20.6 million predicted.

For the year-to-date period from the listing date of May 24, 2019 to Sept 30, DI was US$20 million, 0.5 per cent less than the US$20.1 million forecast.

DPU was 2.299 US cents or 0.6 per cent lower than the 2.312 cents forecast, and net property income came in at US$28.1 million, falling short of the forecast by 2.5 per cent.

Revenue was 7.9 per cent lower than projections at US$31 million, for the same reasons that it was lower in the Q3 period.

The Reit manager remains "encouraged by the outperformance and continued market share gains of EHT's portfolio", said its president and chief executive officer Salvatore Takoushian.

Howard Wu, the founder and principal of EHT's sponsor Urban Commons, affirmed that the sponsor does not intend to monetise its stake when the IPO moratorium expires.

"We strongly believe in the quality and location of EHT's premium branded hotels, which on average outperformed their markets by 9 per cent," Mr Wu said.

EHT units closed up 0.5 US cent or 1.08 per cent to US$0.47 on Wednesday before the results were announced.