Frasers Property reports lower RevPAR in Q1 for hospitality portfolio

REAL estate developer and manager Frasers Property reported lower revenue per average room (RevPAR) for the first quarter across its hospitality properties globally.

Its hotel operating performance across the Asia-Pacific, Europe and UK in November 2020 were “significantly below pre-Covid levels”, it said.

In a business update on Friday, it noted that in North Asia, RevPAR declined 24.9 per cent from a year earlier to S$67.40. In the Asia-Pacific ex-North Asia, RevPAR fell 43.9 per cent to S$99.

RevPAR dropped 68.7 per cent to S$54.30 year on year in Europe.

Frasers Property also registered a lower average occupancy rate (AOR) across the board.

AOR in Europe fell 54.1 percentage points to 29.4 per cent, affected by the lockdown as well as travel restrictions and quarantine measures.

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North Asia AOR fell 16.1 percentage points to 52.9 per cent. It remained “relatively resilient”, supported by a long-stay base.

AOR for the Asia-Pacific ex North Asia noted the smallest drop, edging down 7.6 percentage points to 75.7 per cent.

This was in part of the long-stay base for apartments, which cushioned a weak transient market, said Frasers Property.

The group said that its aim is to maintain stability while standing ready for opportunities, amid near-term uncertainties and challenges in the operating environment this year.

The firm is now “actively planning” for regional and global campaigns to prepare for upcoming travel corridors while concurrently reviewing cost management measures, it noted.

Plans are to target domestic tourism and prepare for upcoming openings. These include Fraser Suites Pazhou in Guangzhou, Modena Nanjing, Fraser Residence Hanoi, and Capri by Fraser Bukit Bintang.

Nonetheless, Frasers Property said that it will take proactive steps to “manage gearing and extend debt maturities”, and is “well-positioned” on repayment or refinancing debts due in FY2021.

Total debt excluding real estate investment trusts (Reits) was S$12.9 billion, with an average debt maturity of 2.6 years.

Net debt as at Dec 31, 2020 stood at S$15.91 billion, marginally higher from S$15.87 billion a quarter ago. Net debt to equity ratio dropped 5.7 percentage points to 99.3 per cent.

Its first-quarter retail and commercial portfolio metrics in Singapore “remained healthy”, said the real estate firm. Retail occupancy stood at 94.4 per cent on an enlarged portfolio, while commercial occupancy “improved” to 92.9 per cent. Commercial occupancy grew 14.1 percentage points during the quarter following lease sign-ups on the completion of asset enhancement initiatives (AEIs) at Alexandra Technopark and Cross Street Exchange, said the group.

It sold 48 units for its residential portfolio, with an unrecognised revenue of S$100 million.

The group noted that about 27 per cent of retail leases and around 9 per cent of commercial leases are due to be renewed in the remainder of FY2021.

In Australia, Frasers Property said it has maintained a “resilient development business despite economic volatility”.

It sold 699 units during the first quarter. Burwood Brickworks in Victoria and Shell Cove in New South Wales were some of its biggest contributors. Unrecognised revenue stood at S$1.3 billion.

Frasers Property recorded a weighted average lease expiry (WALE) of 4.0 years for its Australia office portfolio, and WALE of 8.8 years for its retail portfolio in the country.

Meanwhile, Frasers Property in the first quarter of FY2021 saw a “healthy” take-up for industrial and logistics space in Australia and Europe, it noted. It has 11 new assets totalling 304,923 sq m planned for completion over the next two years.

In Thailand, the developer said its diversified investment portfolio has provided resilience; the group sold 1,636 units, bringing unrecognised revenue to S$71 million.

In Vietnam, the development of Q2 Thao Dien in Ho Chi Minh City is progressing ahead of schedule with completion expected by the second quarter of FY21.

Frasers Property shares closed flat at S$1.22 on Friday, before the announcement was made.