Hong Kong’s Henderson to sell prime property to REIT

24 June 2014   Category: News, Asia, Global, Hong Kong   By Derek Au

Hong Kong developer Henderson Land is to sell off one of its local office properties for US$250 million to its commercial real estate arm, Sunlight REIT.

The deal, which marks the first injection into Sunlight since it listed nine years ago, is for the AIA Financial Centre, situated at 712 Prince Edward Road East in Kowloon. It is a 26-storey, Grade-A office building with a total rentable area of approximately 250,000 square feet.

Sunlight will pay HK$1.96 billion ($250 million) in cash to Henderson, representing a discount of 2% on the appraisal value, for the property. According to a Sunlight statement, Henderson has guaranteed an annualised net property income yield of 3.75% per annum, based on the acquisition price, from the time the deal completes to June 2018.

Henderson also agreed to subscribe to more than 200 million Sunlight stock units for a total sum of HK$784 million, representing a premium of around 20%, which the latter will pay back as part of the acquisition cost. As a result, Henderson’s stake in Sunlight will increase from 36.71% to 43.83%.