Far East Hospitality Trust has announced a higher distribution per unit (DPU) from its earlier forecast.
At its maiden results briefing, the trust says DPU per stapled security will be 2.09 cents.
This compared to its forecast of only 2 cents during its initial public offering (IPO) in August.
The higher distribution comes on the back of a rise in income available for distribution of S$33.6 million.
Far East Hospitality Trust has earlier forecasted an income available for distribution of S$32.2 million during its IPO.
The trust manager says its hotels have performed better than forecasted.
But this is due to higher revenue from the commercial spaces, and meeting and banquet business which helped offset lower-than-expected room rates.
Looking ahead, the trust says it is also trying to attract more leisure travellers.
Income from its serviced residences were affected last year due to the cut back on corporate spending amid the global slowdown.
Gerald Lee, Chief Executive Officer, Far East Hospitality Trust, said: “We also undertook asset enhancement…to refresh our products, that enabled us to command better rates when the new products were put into the inventory after the refurbishment. At the same time, there were also opportunities in organic growth, as some of our properties were new. For example like Oasia Hotel, they had a full operating year last year.
We were able to renegotiate corporate rates at a higher levels after locking in promotional rates in the first year. Going forward, with the backing of Far East Organization as a strong sponsor, we will also be able to capitalise on potential assets that we could acquire into the Trust to help us to grow and deliver more value to the unit holders.”
The trust says it is in talks with The Straits Trading Company to acquire Rendezvous Grand Hotel Singapore.
It is currently carrying out due diligence on the deal and adds that there is no assurance that the transaction will proceed.
Source : Channel NewsAsia – 6 Feb 2013