Far East Hospitality Trust's NPI edged up 10.3% to $102.76m in 2018

It was buoyed by higher RevPAR of its hotel portfolio which grew 7.5% to $142 in Q4.

Far East Hospitality Trust (Far East H-Trust) popped the champagne for 2018 as its net property income (NPI) rose 10.3% YoY to $102.76m from $93.15m in 2017, an announcement revealed.

Revenue also grew 9.5% YoY to $113.68m from $103.82m in 2017, whilst distributable income edged up 4.7% YoY from $72.01m to $75.36m. Distribution per stapled securities (DPS) inched up 2.6% YoY to hit $0.04 from $0.039 in 2017.

In Q4 2018, NPI increased 13.9% YoY to $26.32m from $23.11m during the same period in 2017, whilst revenue advanced 12.4% YoY from $25.72m to $28.92m.

Also read: Far East Hospitality Trust Q3 NPI up 11.8% to $27.69m

The firm’s performance was attributed to overall improvement in the operating performance of its hotel portfolio, which was also supported by a boost from the addition of Oasia Hotel Downtown in April 2018 and the completion of the renovations at Orchard Rendezvous Hotel, formerly known as Orchard Parade Hotel.

The average daily rate (ADR) for its hotel portfolio grew 6.5%, whilst occupancy rose 0.8 percentage points (ppt) for Q4. For FY18, RevPAR rose 6.2% to $144 due to an increase in both occupancy and ADR of 1.5pp and 4.4%, respectively.

“Besides the hotels, our serviced residences have also shown a turnaround in performance for the quarter,” CEO of the REIT’s manager Gerald Lee said in a statement.

Also read: Far East Hospitality to open 3 Sentosa hotels in 2019

The firm’s serviced residences portfolio showed a healthy YoY occupancy growth of 6.1 ppt in Q4 2018. ADR in Q4 was marginally lower by 0.3% YoY, and as a result, revenue per available unit (RevPAU) of the serviced residence portfolio grew 7.5% YoY to $179. On a full year basis, average occupancy improved 4.1pp to 84.1% whilst ADR slipped 4% YoY to $210. RevPAU of the portfolio increased 0.9% YoY to $177.

Meanwhile, revenue from the firm’s retail and office spaces declined 2.4% YoY to $5.5m in Q4 2018 due to lower rental rates. For FY18, revenue slipped 2.7% YoY to $22.1m.

“The operating environment for hotels in Singapore continues to trend in a positive direction, benefitting from a better balance in demand and supply in the industry,” the firm commented. “Nonetheless, with higher trade policy uncertainties and slowing economic growth in key markets, the hospitality sector could see a dampening in corporate demand. The serviced residences have shown signs of turning around but corporate demand is still expected to remain subdued,” they added.