Sunlight REIT Reports Steady Performance Amid Challenging Market Conditions
Sunlight REIT has announced its interim results for the six months ending 30 June 2025, showing a slight decline in revenue and net property income, but maintaining a robust distributable income and a strong financial position.
Sunlight ReitReal EstateFinancial PerformanceHong KongInvestment TrustReal EstateAug 11, 2025
Sunlight REIT reported a 4.8% year-on-year decline in revenue to HK$391.2 million for the Reporting Period. Net property income was down by 5.4% to HK$307.4 million, with the cost-to-income ratio at 21.4%.
Despite the revenue and net property income declines, distributable income remained relatively stable with a mild drop of 1.8% to HK$168.6 million. This reflects the positive impact of a 14% reduction in cash interest expense to HK$91.5 million. The Board has declared an interim distribution per unit of HK 9.1 cents, representing a payout ratio of 93.8% and an annualized distribution yield of 8.1%, based on the closing price of HK$2.26 on the last trading day of the Reporting Period.
At 30 June 2025, the appraised value of Sunlight REIT’s real estate portfolio was HK$17,630.5 million. Total assets stood at HK$18,220.2 million, while net assets attributable to unitholders were HK$12,634.1 million, implying a net asset value of HK$7.27 per unit.
Operating highlights for the Reporting Period include an overall occupancy rate of 89.2%, down from 91.3% at the end of 2024. The office occupancy rate dropped to 90.0%, while the retail occupancy rate was 87.6%. The passing rent for the office portfolio declined mildly by 1.2% to HK$31.7 per sq. ft., while the retail portfolio's passing rent remained stable at HK$65.5 per sq. ft.
At 30 June 2025, the occupancy rate of Dah Sing Financial Centre was 90.6%, with its passing rent steady at HK$36.3 per sq. ft. Sheung Shui Centre Shopping Arcade recorded a lower occupancy rate of 87.0%, but its passing rent improved slightly to HK$105.2 per sq. ft. Meanwhile, the occupancy rate of Metro City Phase I Property slipped to 87.1% due to the departure of an education tenant in the second quarter of 2025, with its passing rent at HK$53.9 per sq. ft.
Mr. Au Siu Kee, Alexander, Chairman of the Manager, commented, “Hong Kong’s commercial property market has yet to benefit from a more stable economic setting as the ongoing headwinds remain stiff, and the pressure of negative rental reversion is likely to stay. However, we are delighted to report that the refinancing of borrowings maturing in the next 12 months is progressing smoothly with favorable indicative pricing, underscoring the financial strength of Sunlight REIT. In sum, while it is envisaged that operational hurdles are bound to persist, the possibility of lower funding costs may help alleviate pressure on distributable income.”
The financial highlights of the 2025 interim results of Sunlight REIT are as follows:
- Revenue: HK$391.2 million (down 4.8% from HK$411.0 million in the same period of 2024)
- Net property income: HK$307.4 million (down 5.4% from HK$324.9 million in the same period of 2024)
- (Loss) / profit after taxation: HK$(172.2) million (compared to HK$79.5 million in the same period of 2024)
- Distributable income: HK$168.6 million (down 1.8% from HK$171.6 million in the same period of 2024)
- Distribution per unit: HK 9.1 cents (unchanged from the same period of 2024)
- Payout ratio: 93.8% (up from 90.9% in the same period of 2024)
- Portfolio valuation: HK$17,630.5 million (down 1.7% from HK$17,933.6 million at the end of 2024)
- Net asset value: HK$12,634.1 million (down 2.9% from HK$13,010.1 million at the end of 2024)
- Net asset value per unit: HK$7.27 (down 3.5% from HK$7.53 at the end of 2024)
- Gearing ratio: 27.4% (unchanged from 27.0% at the end of 2024)
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. The issuer is solely responsible for the content of this announcement.
Frequently Asked Questions
What was the revenue for Sunlight REIT in the first half of 2025?
Sunlight REIT recorded a revenue of HK$391.2 million for the six months ending 30 June 2025.
How did the distributable income of Sunlight REIT perform in the first half of 2025?
Distributable income for Sunlight REIT was HK$168.6 million, representing a mild drop of 1.8% from the same period in 2024.
What is the net asset value per unit of Sunlight REIT as of 30 June 2025?
The net asset value per unit of Sunlight REIT as of 30 June 2025 was HK$7.27.
What is the occupancy rate of Sunlight REIT's portfolio as of 30 June 2025?
The overall occupancy rate of Sunlight REIT’s portfolio as of 30 June 2025 was 89.2%.
What was the passing rent for the office portfolio of Sunlight REIT as of 30 June 2025?
The passing rent for the office portfolio of Sunlight REIT as of 30 June 2025 was HK$31.7 per sq. ft.
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