Far East Hospitality Trust’s (FEHT) 3Q17 results were within expectations. Gross revenue dropped 2.0% to S$27.5m.

Hotel RevPAR increased 0.4% to S$143 in 3Q17 on marginally lower ADR, while Serviced Residences RevPAU decreased 3.4% YoY on the back of 1.0 ppt lower occupancy and 2.3% lower ADR. Revenue from retail and office spaces declined 4.5% YoY mainly due to lower occupancy.

3Q17 DPU dropped 8.0% YoY to 1.03 S cents or 26.1% of our full year forecast, which were within expectations. 9M17 DPU made up 74.3% of our full-year forecast.

Pending further details from the analyst briefing, we maintain HOLD but place our fair value estimate of S$0.66 under review.

Source: OCBC Research - 2 Nov 2017