“Renovate, Recover, Recycle“
HONG KONG SAR – Media OutReach – September 6, 2023 – Henderson Sunlight Asset Management Limited (the “Director“) announces the final results of Sunlight REIT for the fiscal year ended June 30, 2023 (the “Year“).
While Hong Kong’s economy rebounded in the second half of the year, Sunlight REIT’s performance was somewhat marred by a cyclical decline in the commercial real estate market, particularly in the office sector. Therefore, net property income (“NPI”) posted a slight decline of 2.8% year on year to HK$624.0 million. Taking into account a sharp increase in interest rates which resulted in a significant increase in interest expense, annual distributable income for the year decreased by 11.8% year-on-year to $380.3 million from Hong Kong.
The Board has decided to declare a final distribution of 11.0 Hong Kong cents per unit. Coupled with an interim distribution of 11.0 Hong Kong cents per unit, the total distribution per unit for the year would be 22.0 Hong Kong cents, representing a distribution ratio of 97.9% versus 97.4% in the previous year, while the distribution yield was 7.6% based on the closing price of HK$2.88 on the last trading day of the year.
With an initial contribution from the acquisition of West 9 Zone Kids completed in April 2023, the estimated value of Sunlight REIT’s real estate portfolio increased to HK$18,512.2 million as of June 30, 2023. Its net asset value was of HK$13,669.2 million as of June 30, 2023, or HK$13,669.2 million. $8.06 per unit.
Operating Highlights
As of June 30, 2023, Sunlight REIT’s overall portfolio recorded an occupancy rate of 93.3% (June 30, 2022: 94.7%), with an average rental reversion of -2.3%. The average average rents for the office and retail portfolios were HK$34.6 per square foot and HK$65.6 per square foot, respectively, down 1.4% and 3.0% from there. a year ago.
Facing unfavorable office market dynamics, Dah Sing Financial Center’s NPI for the year declined 4.5% to HK$170.5 million, while its occupancy rate showed a slight rebound compared to six months ago to reach 90.4% as of June 30, 2023.
As for the retail portfolio, Sheung Shui Center Shopping Arcade’s NPI recorded a 3.0% year-on-year decline to HK$135.4 million.
Its occupancy rate experienced a nice rebound to 97.6% as of June 30, 2023, mainly driven by a wave of quality tenants re-establishing their presence in this well-located commercial building. Meanwhile, Metro City Phase I Property’s NPI recorded a 7.9% year-on-year decline to HK$124.7 million, while its occupancy rate recorded a decline to 92.2 % as of June 30, 2023.
During the year, the manager placed even greater emphasis on sustainability and continued to manage the portfolio with a more holistic and greener approach. Notably, Sunlight REIT achieved a two-star rating in its first attempt at a 2022 GRESB real estate assessment, while approximately 70% of its total borrowings as of June 30, 2023 were sustainability-related loans.
Mr. Au Siu Kee, Alexander, Chairman of the manager said: “Given the fluidity of the macroeconomic environment, prudence remains the strategic priority. Specifically, our efforts to ensure Sunlight REIT is on solid financial footing should help it navigate current tight credit conditions. Better yet, we have been able to mobilize resources to expand and strengthen Sunlight REIT’s retail portfolio, providing it with greater potential to benefit from a recovery in consumption.
Notes: Attached are financial highlights of Sunlight REIT’s 2022/23 fiscal year end results.
Financial highlights of the final results of the 2022/23 financial year:
(in millions of Hong Kong dollars, unless otherwise indicated)
| 2023 | 2022 | Change (%) | |
| For the year ended June 30: | |||
| Income | 783.3 | 802.9 | (2.4) |
| Net property income | 624.0 | 641.9 | (2.8) |
| (Loss)/profit after tax Note |
(28.4) | 102.9 | N / A |
| Distributable annual income | 380.3 | 431.1 | (11.8) |
| Distribution per unit (Hong Kong cents) | 22.0 | 25.0 | (12.0) |
| The payout ratio (%) | 97.9 | 97.4 | N / A |
| As of June 30: | |||
| Portfolio valuation | 18,512.2 | 18,095.2 | 2.3 |
| Net Asset Value | 13,669.2 | 14,051.4 | (2.7) |
| Net Asset Value per Unit (HK$) | 8.06 | 8.36 | (3.6) |
| Gear ratio (%) | 26.1 | 23.3 | N / A |
Note: Includes a decrease in fair value of investment properties of HK$354.4 million (compared to a decrease in fair value of HK$263.9 million for the year ended 30 June 2022 ).
Disclaimer: The information contained in this press release does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to buy or subscribe for any units of Sunlight REIT in Hong Kong or any other jurisdiction .
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The issuer is solely responsible for the content of this announcement.
