Far East Hospitality Trust - OCBC Investment 2021-02-15: Downside Protection From Fixed Rent

FAR EAST HOSPITALITY TRUST (SGX:Q5T) | SGinvestors.io FAR EAST HOSPITALITY TRUST (SGX:Q5T)

Far East Hospitality Trust - Downside Protection From Fixed Rent

  • Far East Hospitality Trust's 2H20/FY20 DPU fell 30.7%/36.7% y-o-y.
  • FY20 RevPAR fell and RevPAU fell 50.0%/12.6% y-o-y.
  • S$5.3m of retained distributable income was released.



Far East Hospitality Trust's FY20 results meet expectations

  • Far East Hospitality Trust (SGX:Q5T)’s 2H20 gross revenue and NPI dropped 34.8% and 38.0% y-o-y to S$39.0m and S$33.6m respectively, mainly due to lower master lease rental income and rental rebates given to commercial tenants.
  • Far East Hospitality Trust released S$5.3m of retained distributable income in 1H20 on stabilised operating environment. As such, 2H20 DPU dropped 30.7% y-o-y to 1.38 cents while FY20 DPU fell 36.7% y-o-y to 2.41 cents and formed 102% of full-year forecast, in line with our expectations.


Hotels on fixed rent while SRs performed above fixed rent

  • In terms of RevPAR performance, Far East Hospitality Trust's 2H/FY20 hotels RevPAR fell 56.5%/50.0% y-o-y to S$64/S$71.
  • Separately, 2H/FY20 SRs RevPAU declined 19.0%/12.6% y-o-y to S$153/S$159. The decline in RevPAR/PAU was mainly due to a decline in ADRs as occupancy rate continued to be supported by government contracts and corporate bookings. However, occupancy rate for hotels and SRs fell q-o-q in 4Q20 as corporates sourced for alternative, cheaper accommodations for their workers.
  • Overall, SRs continued to perform better than hotels and above fixed rent.


Buffer from fixed rent component (~77% of gross revenue in FY20)






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2021-02-15
SGX Stock Analyst Report BUY UPGRADE HOLD 0.660 SAME 0.660



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