Daiwa's first Sunshine Real Estate Fund (0435.HK) is better than the market rating, with a target price of HK $2.90 on the grounds that the fund has the right assets at the right time.

The Sunshine Real Estate Fund's property at 248 Queen's Road East is steadily upgrading and has attracted some multinationals as tenants, the bank said. it is helpful for them to gradually catch up with the higher rent levels of office buildings whose target tenants are usually multinational companies.

The bank pointed out that the Shopping Mall of the Sunshine Real Estate Fund's Shangshui Mall is favored by mainland tourists, and the increase in the number of mainland shopping tourists to Hong Kong is also good for its rent prospects.

Daiwa added that the current strong investment market for commercial properties will also enhance the net asset value of other properties under the Sunshine Real Estate Fund. Daiwa said that based on its forecast, the Sunshine Real Estate Fund could yield a dividend yield of 6.3% in fiscal year 2012, and that the current price was 53% off the bank's forecast of net asset value of HK $5.30 at the end of 2011.

The sunshine real estate fund closed 0.4 per cent higher at HK $2.48 on Tuesday.