Far East H-Trust

Far East H-Trust: Goldman Sachs initiate Coverage with neutral Call and $1.02 TP. House note that expect FEHT to deliver 9.5% DPU CAGR over 2011-2014E (lifted by Oasia Hotel) and 5.2% over 2012E-2014E (vs hospitality SREIT peers: 2.6%). Add that the mid-tier/upscale hospitality segments in SG offer most growth potential, in our view. In the near term, key drivers would be: (1) developing in-house brands, particularly Village and Oasia brands; (2) improving hotel customer mix by expanding the high-yield corporate segment; (3) rolling out AEIs actively to upgrade the assets. Over the medium term, it has a visible acquisition pipeline of 7 properties (which we estimate at S$1.5bn, +70% of asset value) granted by its sponsor to tap into, an upside risk to valuations.