Sunlight Real Estate Investment Trust (“Sunlight REIT”) Final Results for the Year Ended 30 June 2021

Advancing Sustainability

HONG KONG SAR – Media
OutReach – 7
September 2021 – Henderson Sunlight Asset Management Limited (the “Manager“) announces the final results
of Sunlight REIT for the year ended 30 June 2021 (the “Year“).

While
the global economy staged a strong recovery in the first half of 2021 as a
result of extraordinary monetary and fiscal stimulus packages launched to
relieve the ravages of COVID-19, protracted travelling and social distancing
restrictions continued to take their tolls on the commercial real estate
sector. Accordingly, net property income (“NPI“)
of Sunlight REIT for the Year registered a decline of 6.6% to HK$639.7 million,
while annual distributable income was down 6.1% from the preceding year to HK$438.3
million.

The
Board has resolved to declare a final distribution of HK 13.1
cents per unit. Together with an interim distribution of HK 12.5 cents per
unit, the total distribution per unit for the Year would amount to HK 25.6
cents, implying a payout ratio of 97.5% (FY2019/20: 95.2%).

The
appraised value of Sunlight REIT’s property portfolio was HK$18,341.7 million
at 30 June 2021, representing a decrease of 3.0% compared with a year ago. Consequently,
its net asset value dropped 4.4% to HK$14,124.3 million, or HK$8.45 per unit.

Operating Highlights

The
entire portfolio of Sunlight REIT recorded an average occupancy rate of 93.7%
at 30 June 2021 (30 June 2020: 95.7%). Occupancy rate of the office portfolio
was 92.4% (30 June 2020: 95.6%), while the corresponding figure of the retail
portfolio was 96.5% (30 June 2020: 95.8%). Average passing rent of the office
portfolio was HK$36.7 per sq. ft. at 30 June 2021, up 0.5% from a year ago,
while that of the retail portfolio was HK$70.4 per sq. ft., down 5.9% year on
year. Average negative rental reversion of the portfolio for the Year was 6.2%.

Amidst a
challenging operating environment, the Manager is delighted to announce the
addition of Dah Sing Bank, Limited as a major tenant of (the renamed) Dah Sing
Financial Centre during the Year, which contributed to the 7.8% improvement in
passing rent despite a decline in NPI of 9.9%. Meanwhile, NPI of Strand 50
increased by 9.8%, reflecting the property being successfully transformed into
an appealing modern workplace in the core of the Sheung Wan district. On the
retail front, the performance of Sheung Shui Centre Shopping Arcade was
hampered by social distancing restrictions and border controls, causing an
11.8% decrease in its NPI. Gratifyingly, Metro City Phase I Property continued to demonstrate its resilience as a community shopping mall mostly catered to non-discretionary consumption, recording a mild retreat in NPI of 3.8%.

During the Year, Sunlight REIT made initial foray into sustainable finance and medium term
notes, successfully raising a total of over HK$1,800 million. This demonstrates
the credit quality of Sunlight REIT and its firm commitment to sustainability.

Mr. Wu Shiu Kee,
Keith, Chief Executive Officer of the Manager said, “We are cautious but
hopeful about the prospects for the macro environment ahead. Both the office
and retail markets appear to have seen the bottom, although the extent of
recovery critically depends on the pace at which COVID-19 recedes and the
effectiveness of the measures implemented by various governments to restore
economic vigour. Despite a transitory setback in income performance, the
fundamentals of Sunlight REIT remain sturdy. 
With a firm foundation established over the course of 15 years, it is
well-positioned to ride out the storm and to prudently expand its business,
assuring unitholders with a sustainable growth in distributions over the long
term.”

Remarks:
Attached financial highlights of FY2020/21 Final Results of Sunlight REIT.

Financial
Highlights of FY2020/21 Final Results:

(in HK$’ million, unless otherwise
specified)

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 purchase or
subscribe for units in Sunlight REIT in Hong Kong or any other jurisdiction.