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Sunlight REIT (SEHK: 435) is a Hong Kong-listed REIT with exposure to both the office and retail sectors and was listed on the Hong Kong Stock Exchange in December 2006.
The REIT now owns a diverse portfolio of 11 office and five retail properties with a total gross rentable area (GRA) of over 1.2 million square feet.
Capital appreciation on back of prudent management
Sunlight REIT floated its shares at an IPO price of HK$2.60. The REIT had a portfolio valuation of HK$9.56 billion (US$1.23 billion) at the end of June 2007 which marked its first seven months as a listed company.
The REIT’s portfolio has grown since, reaching a valuation of HK$20.0 billion. This was on the back of prudent portfolio management decisions made by the managers of the REIT. Growth was backed by increases in revenue which swelled from HK$200.3 million (end June 2007) to HK$850.7 million as of the end of June 2019.
This tremendous expansion is the reason why Sunlight REIT’s shares are currently trading for HK$5.09 (as at the time of writing).
What this means is that investors who invested in Sunlight REIT at its IPO would have made a return of 95.7% by just holding onto their shares over the past 13 years.
Being a REIT, Sunlight REIT also pays out a distribution each year. This would have amounted to a total of HK$2.6796 from its IPO to the end of June 2019. This means investors would have made another 103% in returns just from dividends.
Putting it all together, every HK$10,000 invested in Sunlight REIT at its IPO would have turned into HK$19,577. Add in the distributions to the mix and every HK$10,000 invested would have turned into HKD$29,882, implying a total return of a mind-blowing 199%!
Sunlight REIT is, thus, a good example of the staggering returns investors can earn should they be able to pick the right companies and stick with them for the long term.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Saket Jhajharia doesn’t own shares in any companies mentioned.