Listed in 2011, Pavilion REIT owns primarily prime retail assets in the Klang Valley including Pavilion Kuala Lumpur Mall and Elite Pavilion Mall as well as the recently acquired Pavilion Bukit Jalil. The value of its investment properties stood at RM8.4 billion as of end-December 2023.
Here are seven things I learned from the 2024 Pavilion REIT AGM.
1. Gross revenue was up 31.3% YoY to RM723.8 million in 2023 because of additional contribution from Pavilion Bukit Jalil that was acquired in June 2023 as well as higher occupancies, rental income, and advertising income. Likewise, net property income (NPI) was up 26.1% to RM459.2 million in 2023 but was offset by higher property operating and electricity expenses. The REIT’s full-year results for 2023 comprised only seven months of contributions from Pavilion Bukit Jalil.
Source: Pavilion REIT
The REIT’s NPI mainly came from the three malls, namely Pavilion Kuala Lumpur Mall, Elite Pavilion Mall, and Pavilion Bukit Jalil. The Pavilion Malls (first two) are connected to each other and situated along the prime Bukit Bintang shopping strip. Their occupancy rates were above 95% in 2023. The latter is in the suburb of Bukit Jalil.
In Q1 2024, Pavilion REIT continued to record growth across its revenue, NPI, and proposed distribution per unit (DPU) compared to its previous corresponding quarter despite higher property operating expenses.
2. Pavilion Bukit Jalil was acquired at RM2.2 billion in June 2023. Term loans amounting to RM1 billion was drawn down to partly finance the acquisition. Consequently, the REIT’s gearing ratio rose from 33.8% in 2022 to 41.9% in 2023, a change that management is monitoring closely.
A private placement of RM720 million was also issued to fund the acquisition, raising 590.2 million shares at RM1.22 per share. DPU still increased 7.6% from 8.37 sen in 2022
