Sunlight Real Estate Investment Trust to acquire West 9 Zone Kids for HK$748 million

HONG KONG SAR - Media OutReach - 11 January 2023 - Henderson Sunlight Asset Management Limited (the “Manager”), as manager of Sunlight Real Estate Investment Trust (“Sunlight REIT”), is pleased to announce that a special purpose vehicle wholly-owned and controlled by Sunlight REIT entered into a sale and purchase agreement with an independent third party to acquire West 9 Zone Kids for a consideration of HK$748 million, representing a discount of approximately 11.9% to the valuation of HK$849 million as appraised by Knight Frank Petty Limited, the independent property valuer.

About West 9 Zone Kids

West 9 Zone Kids is the commercial development of “Florient Rise” located at No. 38 Cherry Street, Tai Kok Tsui, Kowloon, Hong Kong. It comprises a 3-storey shopping arcade with eight external wall advertising spaces and 17 commercial carparking spaces, with a gross rentable area of approximately 58,836 sq. ft..

Strategic location with defensive trade mix

Completed in 2008, West 9 Zone Kids is a well positioned retail property with direct covered footbridge linkage to the Olympic station of the Mass Transit Railway, and is strategically located within a strong catchment area in the West Kowloon district surrounded by both office buildings and high quality private residential developments. With a relatively defensive trade mix focusing on service trades, notably education and eateries, West 9 Zone Kids recorded an occupancy rate of 90.7% at 31 December 2022, with a monthly rental income and car park income of approximately HK$2.9 million.

Complementary benefits to Sunlight REIT’s retail portfolio

The acquisition is consistent with the investment objective of Sunlight REIT of acquiring quality commercial property assets to strengthen its existing portfolio. Further, the Manager believes that the acquisition will improve the geographic footprint of Sunlight REIT’s portfolio, initiate its presence in a key residential hub of Kowloon while providing complementary benefits to its retail portfolio.

Financial effect of the acquisition

Had the acquisition been completed on 30 June 2022, it is estimated that the gearing ratio of Sunlight REIT at 30 June 2022 would have increased from approximately 23.3% to approximately 25.7%, while its net asset value per unit of HK$8.36 at 30 June 2022 would have been largely unchanged. Accordingly, the acquisition is not expected to have any material adverse impact on the financial position of Sunlight REIT as compared to that at 30 June 2022 (as disclosed in the 2021/22 annual report of Sunlight REIT).