Far East Hospitality Trust FY2025 Results: A Solid Year with Signs of Stabilization
Far East Hospitality Trust (Far East H-Trust) delivered its FY2025 results in a period marked by gradual recovery in tourism, significant asset enhancements, and prudent capital management. This article analyzes the Trust’s key financial metrics, provides a comparative view of earnings, revenue, and distributions, and assesses the outlook and implications for investors.
Key Financial Metrics and Comparative Performance
| Metric |
2H 2025 |
1H 2025 |
2H 2024 |
YoY Change |
QoQ Change |
| Gross Revenue (S\$’000) |
59,835 |
51,565 |
54,898 |
+9.0% |
+16.1% |
| Net Property Income (S\$’000) |
50,943 |
45,638 |
49,871 |
+2.1% |
+11.6% |
| Income Available for Distribution (S\$’000) |
36,959 |
30,915 |
32,697 |
+13.0% |
+19.6% |
| Distribution per Stapled Security (DPS, cents) |
1.92 |
1.78 |
2.08 |
-7.7% |
+7.9% |
| Core DPS (cents, excl. gains) |
1.80 |
1.51 |
1.59 |
+13.2% |
+19.2% |
Full Year (FY2025) vs FY2024:
| Metric |
FY2025 |
FY2024 |
YoY Change |
| Gross Revenue (S\$’000) |
111,400 |
108,706 |
+2.5% |
| Net Property Income (S\$’000) |
96,581 |
99,337 |
-2.8% |
| Income Available for Distribution (S\$’000) |
67,874 |
66,587 |
+1.9% |
| Distribution per Stapled Security (DPS, cents) |
3.70 |
4.04 |
-8.4% |
| Core DPS (cents, excl. gains) |
3.31 |
3.24 |
+2.2% |
Dividend and Distribution
The Trust declared a distribution per stapled security of 1.45 cents for the period from 20 August to 31 December 2025 (excluding an advanced distribution of 0.47 cents paid earlier). The total DPS for 2H 2025 is 1.92 cents. On a full-year basis, the DPS was 3.70 cents, representing a yield of 6.1% based on the closing price of S\$0.610 as at 31 December 2025. The core DPS, excluding divestment gains, was 3.31 cents, up 2.2% year-on-year.
Historical Performance and Revenue Mix
The revenue mix has evolved with the addition of Four Points by Sheraton Nagoya in Japan, which contributed S\$6.8 million for the year, enhancing portfolio diversification. Singapore hotel and serviced residence revenue declined year-on-year, but this was offset by the new Japanese asset and growth in commercial premises and other income. Overall, the revenue base has become more resilient and diversified.
Balance Sheet and Capital Management
- Aggregate leverage remains low at 33.0%, with an interest coverage ratio of 3.6x.
- Average cost of debt declined to 3.1% from 4.1% the previous year, aided by refinancing efforts and sustainability-linked facilities.
- 97.5% of the property portfolio is unencumbered, providing significant financial flexibility.
Portfolio Performance Trends
- Singapore Hotels: Average occupancy improved slightly to 81.3%, and stabilized in 2H 2025 at 83.1%. However, ADR declined 4.1% to S\$170 and RevPAR fell 3.8% for the year. 4Q 2025 RevPAR was up 0.7% YoY, indicating early signs of stabilization.
- Japan Hotel (FPN): RevPAR rose 7.6% YoY in 2H 2025, with gross operating profit up 10.5% on stronger room and F&B revenue and effective cost control.
- Singapore Serviced Residences: Average occupancy was 81.5%, slightly softer due to weaker corporate demand, while RevPAU declined 3.4%. 2H 2025 showed stabilization with RevPAU at S\$229.
Asset Revaluation and Enhancements
- Total portfolio value increased by S\$42 million to S\$2,558 million, mainly due to the Nagoya acquisition.
- Asset enhancement initiatives included escalator upgrades at Village Hotel Bugis and new F&B and wellness tenants across the portfolio, enhancing guest experience and occupancy.
Macroeconomic and Tourism Outlook
While global growth remains subdued and the Singapore dollar is expected to stay firm, the tourism sector is supported by:
- Gradually recovering visitor arrivals, though still below pre-pandemic levels.
- Major new attractions opening (Mandai Wildlife Reserve, Sentosa, Universal Studios Singapore expansions).
- Expansion of Changi Airport and the Marina Bay Cruise Centre, boosting connectivity.
- Singapore’s long-term ambition to triple MICE receipts by 2040, underpinning growth in business and corporate travel.
Divestments and Exceptional Items
- The final distribution from the divestment of Central Square was recognized in FY2025, leading to a YoY decline in “other gains” distributions.
Conclusion and Recommendation
Overall Performance and Outlook:
Far East H-Trust delivered a solid set of results in FY2025. Revenue and core distribution per stapled security increased, underpinned by the acquisition in Japan and effective capital management, although net property income declined slightly due to soft Singapore performance. Stabilization in the hotel market, continued growth in commercial premises, and healthy balance sheet metrics all suggest a resilient platform for future recovery. The outlook remains positive, with further upside expected from tourism recovery, new attractions, and ongoing MICE sector development.
For Current Holders:
Investors already holding Far East H-Trust may consider holding their positions. The Trust offers an attractive 6.1% dividend yield, a conservative balance sheet, and signs of operational stabilization. The medium-term tourism recovery and new asset contributions should support further gains in distributable income.
For Prospective Investors:
Investors not currently holding this stock could consider initiating a position for stable yield exposure and recovery upside, especially if seeking income and diversification into hospitality and Singapore real estate. However, patience may be required as RevPAR and visitor arrivals gradually normalize.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.
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