sunshine Real Estate (00435) recorded an annual revenue of 850 million yuan as of the end of June, an increase of 4.1% year-on-year
The net property income was 680 million yuan, up 5.6% year-on-year. The annual income was 467 million yuan, an increase of 3.7 million yuan. %, the distribution of 14.1 Hong Kong cents per unit of fund unit, the distribution ratio of 96.4% for the whole year. As of the end of the period, the company’s property portfolio valuation was about 20 billion yuan, an increase of 6.7%. The net asset value per unit of the fund was 9.68 yuan, an increase of 7.2%, and the gearing ratio was 20.4%, down 1.4 percentage points year-on-year.
As at the end of the period, the average occupancy rate of Sunshine Real Estate’s overall property portfolio was 95.3%, down by 2.9 percentage points year-on-year
The occupancy rate of office and retail property portfolios was 94% and 98.1%, respectively, down 3.8 percentage points and 1.1 percentage points year-on-year. The rental rates were 64% and 74% respectively, down 10% and 6 percentage points year-on-year.
On June 30, the average current rent of the office property portfolio was 35.5 yuan per square foot, up 5% year-on-year, while the average current rent of the retail property portfolio rose 2.6% to 75.8 yuan per square foot. The average renewal rent for the property portfolio increased by 11.4%.
Non-core reduces the downside risk of the property
The Sunshine Centre benefited from the non-core driving power of the office building and a stable rental environment. It recorded a 13.5% renewal rent increase and a 78% high renewal rate, which pushed the net property income to increase by 6.2% year-on-year to 180 million yuan. As of the end of the period, the occupancy rate of the Sunshine Center was 98.2%, while the current rent increased by 3.7% to 39.6 yuan per square foot. In respect of shopping malls, the Sheung Shui Centre recorded a 13.4% renewal of rental growth. The net property income rose by 6.9% year-on-year to RMB 170 million. The occupancy rate reached 98.1%, while the current rent increased by 2.2% to RMB 118.4 per square foot.
Looking ahead, Sunshine Real Estate is worried about the uncertainty of Sino-US trade and macroeconomic environment, which will continue to cast a shadow over the global economic outlook. The social controversy in Hong Kong will also aggravate the slowdown in retail consumption and put further pressure on economic growth. I am worried that the business environment in Hong Kong will become more severe. However, the company expects that non-core will bring support for its Grade A office demand, and the downside risk of office properties is relatively low.