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3 Things You Need To Know About Frasers Hospitality Trust

Key Highlights:

  • Frasers Hospitality Trust (SGX: ACV)'s 4Q19 DPU dropped 4.1%

  • The annualised yield and price to book ratio are 6.4% and 0.98 respectively

1. Dividends

Net property income grew +2.3% to $30m. Its portfolio has improved across all countries except Australia. However, 55% of its net property income was eroded by weaker AUD and GBP.

The annualised yield is 6.4%. The REIT has not been performing over the years. Both the price and DPUs of the REIT has been in the downtrend.

Source: reitscompass's REITs Insider ratings

2. Portfolio

Portfolio occupancy remains high at 90%. The portfolio leverage is currently at 35.1%. The interest cost is 2.5%, 68.9% of its loans are on a fixed rate.

It is currently trading at a price to book ratio of 0.98.

3. Growth Catalyst

Frasers Hospitality Trust has a diversified portfolio across six countries.

  1. The Australia properties should continue to underperform, with increasing supply and weaker AUD.

  2. In Singapore, its hotels will remain as the key growth driver. Singapore government continues to roll out initiatives and build infrastructures to attract tourists. Besides, the tapering of supply should enable the REIT to maintain a high occupancy rate.

  3. The UK hotels will continue to face some volatilities ahead, with potential Brexit and weaker GBP.

  4. The upcoming 2020 Tokyo Olympics is expected to boost Japan's tourism industry next year.

  5. With the excess supply, the Malaysia hospitality sector will face some pressure moving forward.

  6. In Germany, Dresden's growing pipeline of MICE events in 2020 should boost the demand of the Maritim Hotel Dresden.

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