Far East Hospitality Trust posted income available for distribution of S$33.7 million for the six months ended Jun 30, up 8.9 year-on-year as lower finance expenses and contribution from its Japanese hotel offset softer demand at its Singapore hotels.

Gross revenue rose 4.3 per cent to S$53.8 million, while distribution per stapled security (DPS) slipped 8.4 per cent to 1.63 Singapore cents following the absence of last year’s one-off gain distribution. Core DPS, which excludes divestment gains, increased 7.9 per cent. No payment dates were disclosed.

By asset class, Singapore hotels booked an 81.5 per cent average occupancy, 2.1 percentage points higher YoY, but average daily rate (ADR) eased 4.2 per cent to S$161, pulling revenue per available room (RevPAR) down 1.6 per cent to S$131. Serviced residences fared better, with occupancy up 3.8 points to 82.0 per cent and ADR edging up to S$272, lifting revenue per available unit (RevPAU) 5.7 per cent to S$223.

The Four Points by Sheraton Nagoya, acquired in Apr 2025, achieved a 63.2 per cent occupancy rate, 7.1 points higher YoY. Despite a 7.6 per cent drop in ADR to ¥12,486, stronger volume pushed RevPAR up 4.2 per cent to ¥7,895 and helped raise gross operating revenue 5.9 per cent.

Higher utility and maintenance costs kept net property income virtually flat at S$45.4 million, while finance expenses fell 28.2 per cent to S$9.2 million, lowering the average cost of debt to 2.3 per cent. Aggregate leverage stood at 32.8 per cent with S$266.6 million of undrawn facilities; 57 per cent of borrowings are on fixed rates and no term loans mature for the rest of 2026 after the early extension of a S$62.5 million sustainability-linked loan.

Management noted that regional travel demand softened in the second quarter amid Middle East tensions and higher travel costs. Looking ahead, the Trust expects Singapore’s tourism pipeline—including the Formula 1 Grand Prix in October and a four-night BTS concert series in December—to underpin demand, while Japan should benefit from the Asian Games in Aichi-Nagoya in September-October and continued inbound tourism.

Chief executive officer Gerald Lee said the Singapore portfolio remained resilient despite weaker regional sentiment, citing improved occupancy in both hotels and serviced residences. He added that the Trust will focus on cost management, selective acquisitions and divestments, and disciplined capital management to sustain returns amid macroeconomic uncertainty and rising hotel supply.