Far East Hospitality Trust H1 DPS falls 9.2% to S$0.0178 on lower contributions from Singapore hotels, serviced residences

[SINGAPORE] Far East Hospitality Trust (FEHT) on Wednesday (Jul 30) posted a 9.2 per cent fall in distribution per stapled security (DPS) to S$0.0178 for its first half ended June, from S$0.0196 in the previous corresponding period.

Distribution to stapled security holders dropped 8.7 per cent to S$36 million from S$39.5 million in the year-ago period.

The distribution will be paid out on Sep 25, after book closure on Aug 7.

H1 net property income declined 7.7 per cent on the year to S$45.6 million from S$49.5 million, driven mainly by lower revenue and higher property-related expenses. 

Revenue was down 4.2 per cent at S$51.6 million from S$53.8 million previously, mainly due to lower contributions from the Singapore hotels and serviced residences.

However, this was partly mitigated by the higher contributions from the commercial premises and other income segment alongside a S$1.6 maiden revenue contribution from FEHT’s acquisition of Japan hotel, Four Points by Sheraton Nagoya, which was completed in April.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Gerald Lee, chief executive officer of the manager, said the acquisition, which is FEHT’s first overseas acquisition, aimed to diversify the trust’s income stream beyond Singapore.

Income available for distribution stood at S$30.9 million, 8.9 per cent lower than the S$33.9 million in H1 2024.

For H1 FY2025, 72.5 per cent of FEHT’s portfolio revenue came from hotels, with 17.8 per cent from commercial properties and other income and 9.7 per cent from serviced residences.

SEE ALSO

Far East Hospitality opens two hotels in Osaka

Singapore hotels contributed to 69.4 per cent of revenue from hotels, while Four Points by Sheraton Nagoya chipped in with 3.1 per cent.

The Singapore hotels segment saw average occupancy fall one percentage point on the year to 79.4 per cent from 80.4 per cent, as the average daily rate (ADRs) declined 4.5 per cent, to S$168 from S$176. Revenue per available room (RevPar) fell 5.7 per cent to S$133 from S$141.

The manager said that the softer performance was partly due to the absence of large-scale concerts and major events over the first six months of this year, unlike the first half of 2024. This situation was compounded by the increased supply of hotel rooms.

The Japan hotels segment, comprising the newly acquired Four Points by Sheraton Nagoya, saw RevPar for Q2 rise marginally by 0.5 per cent on the year to 6,925 yen (S$60.22). Gross operating profit rose 22.9 per cent to around 30.4 million yen, amid disciplined cost management and improved operational efficiency.

The serviced residences segment posted a 6.9 percentage point decline in average occupancy to 78.2 per cent from 85.1 per cent in H1 2024. Occupancy was weighed down by lift replacement works completed in January and softer corporate demand. However, it recovered in the second quarter due to a shift in the guest mix towards more leisure travellers.

Revenue per available unit for the segment was down 6.5 per cent at S$211 from S$226. Despite this, ADR inched up 1.8 per cent to S$270 from S$266, boosted by higher-rated, shorter-stay bookings.

The commercial premises and other income segment posted a 6.4 per cent year-on-year revenue growth to S$9.2 million, driven by improved occupancies, higher rental rates and stronger performance of the office units.

In terms of capital management, FEHT’s total debt stood at S$771.7 million as at end-June, with aggregate leverage at 32.8 per cent.

Average cost of debt declined to 3.4 per cent per annum, reflecting a more favourable interest rate environment and the inclusion of lower-rated Japanese debt.

Around 60.6 per cent of FEHT’s debt was secured on fixed interest rates as at Jun 30, 2025.

Looking forward, the manager highlighted that the hospitality industry remains supported by leisure and Mice (meetings, incentives, conventions and exhibitions) events. Additionally, the opening of new attractions in 2025 – such as the Singapore Oceanarium, Rainforest Wild Asia at Mandai Wildlife Reserve and Minion Land at Universal Studios – stands to strengthen Singapore’s tourism appeal.

“While the outlook remains broadly positive, the pace of tourism recovery may be tempered by external headwinds such as global economic uncertainties, geopolitical tensions and the strong Singapore dollar, which could impact travel sentiment and discretionary spending,” the manager said.

Stapled securities of FEHT ended Wednesday trading unchanged at S$0.61.