HONG KONG, CHINA -- 4 September 2018 - Henderson Sunlight Asset Management Limited (the "Manager") is pleased to announce the final results of Sunlight REIT for the year ended 30 June 2018 (the "Year").

Bolstered by an upswing in Hong Kong's retail sector and a robust trend toward office decentralization, Sunlight REIT recorded a 3.6% year-on-year ("YoY") increase in net property income ("NPI") to HK$646.1 million for the Year. Annual distributable income was HK$450.5 million, up 3.7% YoY.

The Board has resolved to declare a final distribution of HK 13.9 cents per unit. Coupled with an interim distribution of HK 12.6 cents per unit, the total distribution per unit ("DPU") for the Year amounts to HK 26.5 cents, representing a payout ratio of 96.7% and a distribution yield of 4.9% (based on the closing unit price of HK$5.42 on the last trading day of the Year). Excluding the special distribution (of HK 7.5 cents per unit) paid in the previous financial year, DPU for the Year would imply a growth of 3.9%.

The value of Sunlight REIT's portfolio was appraised at HK$18,754.8 million at 30 June 2018, 9.9% higher than a year ago. Meanwhile, its net assets expanded 6.9% to HK$14,857.0 million, which translates to a net asset value of HK$9.03 per unit.

Astute asset management was one of the highlights of the Year. The Manager is delighted to have fended off formidable competition and concluded the purchase of Fung Shun Commercial Building for HK$658.0 million. Further, the Manager also successfully disposed of Palatial Stand Property at a premium of 133% over its appraised value.

At 30 June 2018, the gearing ratio of Sunlight REIT (defined as total borrowings as a percentage of gross assets) was 21.8% and approximately 61% of the term loan facilities were hedged to fixed rates.

Operating Highlights

The overall portfolio of Sunlight REIT recorded an average occupancy rate of 98.2% at 30 June 2018 (30 June 2017: 97.1%[1]). Average passing rent of the office and retail portfolios were HK$33.8 per sq. ft. and HK$73.9 per sq. ft. respectively, supported by rental reversions of 6.9% and 8.0%.

During the Year, Sunlight Tower, the flagship office property of Sunlight REIT, continued to exhibit a fine performance, enjoying a rental reversion of 10.4%. Meanwhile, underpinned by a recovery in retail spending, the NPI of Sheung Shui Centre Shopping Arcade (excluding the one-off income received in FY2016/17 in respect of an early lease termination) grew by more than 7% YoY. Metro City Phase I Property has once again turned in a reassuring performance, as NPI rose by 9.3% YoY on the back of a satisfactory rental reversion of 10.5%.

Mr. Wu Shiu Kee, Keith, Chief Executive Officer of the Manager said, "The prospect of higher interest rates, jittery stock market sentiment and growing concerns regarding international trade all portend to an escalating risk premium for investment. Nevertheless, by adhering to the commitment to agility, Sunlight REIT is well positioned to withstand potential turbulence in the marketplace and even capitalize on investment opportunities that may arise. I am reasonably confident that Sunlight REIT is on the right track to maintain steady progress in the coming year." (mor/*).