Far East Hospitality Trust's results were within expectations. 4Q17 gross revenue dropped 6.6% YoY to S$25.7m while DPU dropped 13.4% YoY to 0.97 S cents. FY17 revenue was down 4.8% YoY to S$103.8m while DPU ended 9.9% down YoY at 3.90 S cents or 98% of our full-year forecast.

Hotel RevPAR and Serviced Residences RevPAU dropped 2.4% YoY and 5.5% YoY respectively in 4Q17, which contributed to the master lease rental dropping 7.8% YoY.

We were slightly surprised by the weakness in 4Q17 RevPAR/RevPAU relative to the figures released by other REITs as well as Singapore Tourism Board since our last report. Nonetheless, we continue to see 2018 as a period of recovery from this low base.

We maintain our BUY rating but place our fair value of S$0.77 under review pending more details from the briefing.

Source: OCBC Research - 15 Feb 2018