Far East Hospitality Trust: Capitalizing on Singapore’s Tourism Recovery
BUY Rating Maintained: Target Price at S$0.76
- Share Price: S$0.60
- Target Price: S$0.76
- Upside Potential: +27.6%
- Previous Target Price: S$0.82
Company Overview
Far East Hospitality Trust (FEHT) is a Singapore-based hospitality trust that owns and manages a portfolio of 12 hospitality properties, including nine hotels and three serviced residences, amounting to 3,015 rooms.
- Market Cap: S$1.2 billion
- Major Shareholders:
- Golden Development – 22.4%
- Far East Organization – 16.7%
- Golden Landmark – 10.3%
2H24 Performance: Recovery on Track
The second half of 2024 (2H24) demonstrated continued improvement, driven by strong tourism recovery and higher revenue per available room (RevPAR).
- Hotels’ RevPAR grew by 7.7% YoY to S$140 in 4Q24, supported by higher average daily rates (ADR) of S$180.
- Revenue from commercial premises increased by 4.8% YoY due to higher rents and occupancy rates.
- Visitor arrivals to Singapore are expected to grow by 3-12% in 2025, reaching 17.0m-18.5m, backed by new attractions and MICE (Meetings, Incentives, Conferences, and Exhibitions) events.
- Aggregate leverage remains low at 30.8%, providing flexibility for future acquisitions.
Key Financials (S$ million)
| Year |
Net Turnover |
EBITDA |
Net Profit |
DPU (S cents) |
PE (x) |
P/B (x) |
DPU Yield (%) |
| 2023 |
107.0 |
87.0 |
130.0 |
4.1 |
14.3 |
0.6 |
6.8% |
| 2024 |
109.0 |
88.0 |
47.0 |
4.0 |
21.3 |
0.7 |
6.7% |
| 2025F |
114.0 |
92.0 |
66.0 |
3.9 |
18.3 |
0.7 |
6.4% |
Stock Catalysts
1. Benefiting from Singapore’s Tourism Rebound
- The Singapore Tourism Board (STB) projects visitor arrivals to rise by 3-12% in 2025 to 17.0m-18.5m (from 16.5m in 2024).
- Major attractions opening in 2025 include:
- Rainforest Wild in March 2025.
- Minion Land at Universal Studios and Singapore Oceanarium in 1H25.
- FEHT’s upscale and mid-tier hotels gained from the return of Chinese tourists, who accounted for 19% of total hotel guests in 2024 (double pre-pandemic levels).
2. Strategic Acquisitions in Sight
- FEHT has S$412 million in debt headroom, allowing it to explore acquisitions both locally and overseas.
- Potential purchases from its sponsor, Far East Organization (FEO), include:
- The Clan Hotel
- Village Residence West Coast
- Remaining 70% stake in Village Hotel, Outpost Hotel, and The Barracks on Sentosa.
- Overseas expansion focus: limited-service, midscale, and upscale hotels in developed markets, including Japan.
3. Strengthening Financial Position
- Debt maturity profile is well-managed, with 57.9% of borrowings fixed at stable rates.
- Weighted average debt maturity has improved to 3.7 years, reducing refinancing risks.
- Capital distributions in 2025 are expected to decrease to S$7 million (from S$16 million in 2024), allowing more capital for yield-accretive acquisitions.
4. Attractive Yield & Strong Valuation
- FEHT offers a 6.4% distribution yield for 2025, which is attractive compared to peers.
- The stock trades at 0.7x P/B, below its net asset value (NAV) per share of S$0.91.
- Target Price of S$0.76 is based on Discounted Dividend Model (DDM), with a 7.5% cost of equity and 2.8% terminal growth rate.
Investment Recommendation: Maintain BUY
- FEHT is well-positioned to capitalize on Singapore’s tourism resurgence, with strategic acquisitions and a robust balance sheet.
- The upcoming openings of major attractions and MICE events will drive higher occupancy rates and RevPAR.
- Current valuation remains attractive, with upside potential of +27.6%.
📌 BUY with a Target Price of S$0.76.
Thank you
