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Far East H-Trust posts 13.9% drop in Q1 DPS on weak hospitality demand

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Rendezvous Hotel Singapore

AMID a softness in the hospitality sector, Far East Hospitality Trust's (Far East H-Trust) distribution per stapled security (DPS) for the first quarter ended March 31 fell 13.9 per cent to 0.93 Singapore cents.

Net property income slipped 10.4 per cent to S$22.12 million while gross revenue was down 9.5 per cent to S$24.78 million during the period.

"Market demand was exceptionally weak at the start of the year. Softness in the corporate segment impacted our performance as macroeconomic concerns weighed on business travel, especially at our serviced residences, which predominantly serve corporations," said Gerald Lee, CEO of the trust manager.

"To stay competitive, we will continue to refresh our properties and seek new avenues for growth. At the same time, we will also maintain a proactive approach in capital management, ensuring a strong debt position and financial flexibility to grow the Trust," he added.

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Within its portfolio, revenue per available unit fell 14 per cent for serviced apartments and revenue per available room slipped 4.6 per cent for hotels from a year ago. The average daily rate for hotels also slipped 4.7 per cent to S$152, while serviced apartments faced a 13.1 percentage-point drop in average occupancy to 71.2 per cent.

The trust manager attributed the pressures on hotels to companies exercising prudence in their business travel spending and heightened competition from new hotel supply.

Demand for serviced apartments was weighed down by fewer project and training groups coming to Singapore given the slowdown in corporate activities, it said.