Frasers Hospitality Trust

Frasers Hospitality Trust (FHT)is the first global hotel and serviced residence trust to be listed in Singapore, comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust.

FHT provides investors exposure to one of the largest international hospitality portfolios by number of rooms, comprising hotels and serviced residences. Its geographically diversified Initial Portfolio consists of 12 quality assets in prime locations within key gateway cities across Asia, Australia and the United Kingdom.

FHT was listed on SGX on 14 July 2014 at an IPO price of 88.0 cents.

FHT released its 1Q 2016 result on 28 January 2016. Gross revenue increased by 16.2%, net property income reduced by 16.9%, distributable income increased by 23.2%, and distribution per stapled security (DPS) increased by 7.5% to 1.7232 cents. At the last transacted price of 78.0 cents, the extrapolated yield is 8.84%.

Gross revenue (GR) and net property income (NPI) of the Singapore portfolio were 16.5% and 19.5% lower than 1Q FY2015 respectively due to the ongoing asset enhancement initiatives at Intercontinental Singapore which commenced in April2015 (3QFY2015). This implies that the GR and NPI have room for improvement.


Note that FHT makes distributions to Stapled Securities holders on a semi-annual basis for every six-month period ending 31 March and 30 September.
The key financial ratios of FHT are as follow:
Share price – 78.0 cents
DPU – 6.89 cents (extrapolated)
Yield – 8.84%
PER – 13.18
P/B – 0.91
Gearing – 42.4%

The gearing of FHT is high and hence there is little room for acquisition without a right issue or share placement. My average purchase price of FHT is 7.72 cents, which translates to a yield of 8.93%. The yield is reasonable and I shall hold on to my FHT shares for regular dividend.