Pavilion REIT achieves 16% growth on 4Q net property income

KUALA LUMPUR (Jan 25): Pavilion Real Estate Investment Trust’s (Pavilion REIT) net property income (NPI) grew 16% to RM89.06 million in its fourth quarter ended Dec 31, 2017 (4QFY17), from RM76.99 million a year ago.

Pavilion REIT declared a final distribution per unit (DPU) of 4.28 sen.

In a filing with the stock exchange this evening, Pavilion REIT said it recognised a 10.2% higher total gross revenue of RM129.45 million, from RM117.46 million in the previous corresponding quarter, mainly contributed by rental income from Pavilion Kuala Lumpur Mall’s tenants after the repositioning exercise.

It also saw an increase in its other income, mainly due to higher advertising income, fees received from Damen’s electricity provider to Pavilion REIT for collecting the electricity charges incurred by tenants in Damen Mall and increase in revenue rent in Pavilion KL Mall.

Meanwhile, Pavilion REIT has managed to keep its 4Q total property operating costs broadly unchanged at RM40.4 million.

For the full financial year ended Dec 31, 2017 (FY17), the group said revenue came in at RM490 million, 6.6% higher compared with RM459.70 million in FY16.

This was, again, mainly contributed by Pavilion KL Mall’s tenants after the repositioning exercise, increase in revenue rent, as well as the electricity collection fees from Damen Mall.

The annual NPI was also slightly higher at RM322.91 million, versus RM314.77 million in FY16. However, DPU for FY17 was 8.24 sen, lower than 10.33 sen last year.

Total property operating expenses went up 15% during the year, which was mainly attributable to the routine operating expenses, higher maintenance costs, and tenancy costs.

Moving forward, Pavilion REIT expects the retail environment to remain challenging.

“Marketing will continue to create differentiation and key attractions to build shopping experience, and operating costs will be monitored to optimise efficiency,” it said in its filing.

Pavilion REIT’s portfolio comprises Pavilion Kuala Lumpur Retail Mall, Pavilion Tower, Damen Mall and Intermark Mall.

At the closing bell today, the REIT declined four sen or 2.52% at RM1.55, after 787,800 shares crossed, giving it a market capitalisation of RM4.7 billion. —

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