Sunlight Real Estate Investment Trust (“Sunlight REIT”) Interim Results for the Six Months Ended 31 December 2023

HONG KONG SAR – Media OutReach Newswire – February 27, 2024 – Henderson Sunlight Asset Management Limited (the “Director“) announces Sunlight REIT’s interim results for the six months ended December 31, 2023 (the “Reporting period“).

Sunlight REIT recorded a 7.9% year-on-year increase in revenue to HK$419.2 million for the reporting period, mainly driven by a full six-month contribution by West 9 Zone Kids. Net property income increased by 5.1% to HK$323.2 million, implying a cost-to-income ratio of 22.9%.

Reflecting the sharp increase in interest expense to HK$111.3 million, distributable income decreased 18.1% year-on-year to HK$162.3 million. The Board decided to declare an interim distribution per unit of 9.0 Hong Kong cents, representing a distribution ratio of 94.4% and an annualized distribution yield of 8.3% based on the closing price of HK$2.18 on the last trading day of the reporting period.

The appraised value of Sunlight REIT’s portfolio was HK$18,480.6 million as of December 31, 2023. The gross assets and net assets were HK$19,083.4 million and at HK$13,544.6 million, which corresponds to a net asset value of HK$7.95 per unit.

Operating Highlights

Sunlight REIT’s overall portfolio occupancy rate as of December 31, 2023 was 93.1%, largely unchanged from six months ago. For the Period under review, the office and retail portfolios recorded rental reversions of 3.3% and 0.8% respectively, giving rise to an overall rental reversion of 1.5%.

Regarding the operational performance of major office buildings, Dah Sing Financial Center saw steady improvement in occupancy rate, reflecting a gradual recovery in new leasing activities supported by stronger motivation of corporate tenants to relocate or to expand. On the Kowloon side, the occupancy rates of Righteous Center and The Harvest were 97.5% and 100%, respectively, demonstrating the resilience of Mong Kok district as a convenient transportation hub for service-related businesses.

On the commercial front, Sheung Shui Center Shopping Arcade recorded a rental reversion of 4.8% but a lower occupancy rate of 90.7% compared to six months ago, mainly due to an early termination of the lease of a tenant of a nursery school which occupied 7.5% of its gross amount. rentable area (“GRA“). Meanwhile, with the completion of its first phase of renovation, Metro City Phase I Property’s occupancy rate rebounded to 94.7%, while its rental reversion stood at 4.1 %.

Mr. Au Siu Kee, Alexander, President of the manager, said: “Based on current rental progress, we remain cautiously optimistic about the near-term outlook for our retail destinations in Sheung Shui, Tseung Kwan O and Yuen Long. In the meantime, substantial resources will continue to be devoted to asset recycling as we strive to create value for unitholders in a continued challenging economic environment.

Notes: Attached are financial highlights of Sunlight REIT’s 2023/24 interim results.

Financial highlights of 2023-2024 interim results:

(in millions of Hong Kong dollars, unless otherwise stated)

Note: Includes a decrease in fair value of investment properties of HK$53.0 million (compared to a decrease in fair value of HK$448.4 million for the six months ended December 31, 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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