FAR East Hospitality Trust (Far East H-Trust) declared a distribution of S$30.6 million to stapled securityholders for its H1 2022 on Friday (Jul 29) — which translates to a 40 per cent gain in distribution per stapled security (DPS) to S$0.0154 compared S$0.011 in H1 2021.

The manager attributed the higher distribution to a higher net property income contribution, lower finance cost and other gains distribution from the divestment of Village Residence Clarke Quay (VRCQ).

Gross revenue for the first half of FY2022 however, slid 1.4 per cent from S$41.6 million to S$41 million mainly due to the VRCQ divestment, it added.

“Excluding the effect of VRCQ, revenue from the retail and office spaces would have increased 12.6 per cent year on year on a same-store basis,” the manager added.

Following the disposal of Central Square, which comprises VRCQ as well as office and retail units, revenue from Far East H-Trust’s retail and office spaces declined 1.5 per cent to S$7.3 million for H1 2022.

Net property income for the stapled group also saw a growth of 3.5 per cent from S$36.2 million to S$37.5 million in H1 this year.

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Income available for distribution rose 14.4 per cent year on year from S$25.3 million to S$29 million in H1 2022.

The DPS is due to be paid out on Sep 6, after books closure on Aug 8.

Average occupancy of the hotels under Far East H-Trust’s portfolio fell 68.2 per cent year on year as some hotels, previously used for Covid-19-related isolation, exited from contracts with the government, coupled with the fact that the Elizabeth Hotel was closed for renovation.

While there were early signs of recovery, the hotels were still on the fixed rent component of the master leases, said the stapled group’s manager.

Meanwhile, average occupancy for its serviced residences rose 12.3 percentage points to 88.5 per cent on stronger demand supported by corporate groups and from professionals requiring long-stay accommodation, they added.

The aggregate leverage for the trust also decreased from 38.3 per cent in December 2021 to 33.3 per cent in June 2022 after it repaid loans and revolving credit facilities with proceeds from the divestment of Central Square.

“We are encouraged by the increasing flow of leisure and business travel into Singapore and the progressive recovery of the hospitality industry,” said Gerald Lee, chief executive of the Reit manager.

“While there are macroeconomic headwinds and geopolitical risks in the near term, they will be mitigated by the expected improvement in operating performance of our hotels and serviced residences, as well as our plan to distribute a portion of the gains from the divestment of Central Square to stapled securityholders.”

Stapled securities of Far East H-Trust were trading 0.8 per cent or S$0.005 lower at S$0.645 as at 9.36 am on Friday.