InvestIdeas

Far East Hospitality comes to market

Far East Hospitality REIT will eventually own seven hotels and four serviced residences in Singapore with about 2,500 rooms.

The REIT should start to market its IPO in early August at yields of 6-6.5%.

Pricing of the REIT is scheduled for Aug 16 and the IPO could be as large as $700 million.

Analysts reckon that yields could be re-priced as high as 7% in order to attract investors.


Source: Reuters

not vested

Distributions and yield

- Based on the offering price and the manager’s forecast and projected results, the annualized distribution yield for Forecast Period 2012 (1 Aug 2012 to 31 Dec 2012) and Projection Year 2013 are 6.0% and 6.3% respectively.


Risks

The hospitality industry is highly competitive

- According to CBRE, an estimated 30 new hotels with approximately 7,229 hotel rooms and an estimated seven serviced residences with approximately 783 serviced residence units are expected to enter the market by the end of 2014


Source: OCBC

Valuation.

At 93 cents the P/NAV works out to 1xP/NAV.

This compares to 1.2xP/B for CDREIT and 1.07x for Ascendas Hospitality.

In terms of dividend yield, FEH offers a forecasted yield of 6%(FY12) and 6.3% for FY13 (100% payout ratio).

In comparison CDREIT offers FY12 yield of 5.9%(90% payout ratio).


Source: UOBKH

not vested

2Q17 results broadly in line; awaiting catalysts

1H17 DPU of 1.90 Scts (-9% yoy) was broadly in line with consensus and our expectations, at 47% of our full-year forecast. 2Q17 DPU of 0.97 Scts was at 24%.

Looking to 2H17, we expect hotels’ RevPAR declines to moderate, while SRs’ RevPAU is likely to see a more pronounced impact.

On an “as-it-is” basis, we maintain our Hold call on FEHT.

P/BV = 0.75

Source: CIMB

https://brokingrfs.cimb.com/Hdn_GeoZPKf ... dyygA2.pdf

not vested

Far East Hospitality Trust: Hotel RevPAR remains resilient

Far East Hospitality Trust’s (FEHT) 2Q17 results reached the higher end of our expectations.

1H17 DPU dropped 9.1% YoY to 1.90 S cents or 49.8% of our full-year forecast.

As a comparison, 1H15 and 1H16 DPU made up ~48% each of their respective full-year DPUs, though we do expect slightly greater downward pressure for hotel RevPARs in 2H17 given that most of the room supply injection in 2017 is back-end loaded.

We increase our nominal growth rate of dividends in mature state from 1% to 1.5%.

After adjustments, our fair value increases from S$0.60 to S$0.66.

While FEHT appears cheap with its units trading at a ~0.75x PB, we note that the NPI yield on its investment property portfolio (as valued end-FY16) is relatively low at 4.0%.

Source: OCBC

Far East Hospitality Trust reports 25.1% growth in FY2023 DPS of 4.09 cents as gross revenue increases
https://www.theedgesingapore.com/capita ... ss-revenue

Far East Hospitality Trust reports 6% higher NPI of $25.1 mil in 1QFY2024
https://www.theedgesingapore.com/capita ... l-1qfy2024

Far East Hospitality Trust reports 1HFY2024 DPS of 1.96 cents, 2.1% higher y-o-y
https://www.theedgesingapore.com/capita ... gher-y-o-y

FEHT reports 3QFY2024 NPI of $26.2 mil, 6.8% lower y-o-y
https://www.theedgesingapore.com/capita ... ower-y-o-y

FEHT expands investing mandate to include overseas properties; to buy Nagoya hotel for 6 bil yen
https://www.theedgesingapore.com/news/r ... -6-bil-yen