DaMen, Intermark lift PavREIT’s 2Q NPI up 13%

KUALA LUMPUR (July 29): Rental income from DaMen Mall and Intermark Mall, which Pavilion Real Estate Investment Trust (PavREIT) acquired at end-March, lifted the trust’s net property income (NPI) for the second quarter ended June 30, 2016 (2QFY16), by 13.3% year-on-year.

The trust’s quarterly NPI came in at RM81.4 million, compared with RM71.9 million a year ago. Revenue for the quarter also registered a growth of 14.7% to RM118.0 million from RM102.9 million in 2QFY15, its bourse filing yesterday showed.

It declared a distribution per unit (DPU) of 2.06 sen for the quarter, bringing its DPU to 4.16 sen for the six months ended June 30, 2016 (1HFY16), or RM125.7 million in total, which is 1.8% higher than the RM123.5 million or 4.09 sen per unit distributed for 1HFY15. The 1HFY16 DPU is payable on Sept 6.

For 1HFY16, PavREIT registered an NPI of RM157.1 million, which is 8.4% higher than the NPI of RM144.8 million in the prior year’s corresponding period, while cumulative revenue came in at RM224.7 million, 8% higher than the RM208 million in 1HFY15, again due to the newly acquired malls.

Total property operating expenses incurred was higher by RM4.5 million or 7% in 1HFY16 versus 1HFY15, due to operating costs incurred for the new malls, according to its bourse filing.

“Higher manager’s management fee was in line with the higher achievement of NPI and increase in total asset value. Borrowing cost was higher by RM11.2 million due to drawdown of additional borrowings for acquisition of investment properties and working capital purposes,” it said.

As of closing, PavREIT was unchanged at RM1.80, valuing it at RM5.44 billion.

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This article first appeared in The Edge Financial Daily, on July 29, 2016. Subscribe to The Edge Financial Daily here.