Pavilion REIT 4Q NPI rises 10.2% on lower property expenses and higher revenue

KUALALUMPUR (Jan 27): Pavilion Real Estate Investment Trust (REIT) saw its net property income (NPI) increase by 12.5% to RM68.46 million in the fourth quarter ended Dec 31,2020 (4QFY20) from RM60.88 million in the immediate preceding quarter on higher revenue and lower property expenses.

In a bourse filing, the REIT announced that its quarterly revenue was up 10.2% quarter-on-quarter (q-o-q) at RM130.79 million from RM118.72 million in the immediate preceding quarter.

Pavilion REIT declared a final distribution per unit (DPU) of 2.52 sen, versus the 4.1 sen DPU declared in 4QFY19. Consequently, its DPU for FY20 now stands at 4.13 sen, which is down from the 8.5 sen in FY19.

On a year-on-year (y-o-y) basis, the retail REIT noted that its NPI declined by 24.97% from RM91.25 million in 4QFY19. Revenue contracted by 10.4% to RM145.96 million.

Cumulative NPI for FY20 was lower at RM233.52 million, down 37.76% from RM375.18 million in FY19. Full-year revenue also dropped by 12.84% to RM510.22 million from RM585.35 million.

“The retail industry is anticipated to be challenging in 2021. However, once the vaccine is introduced to Malaysia, [Pavilion REIT Management Sdn Bhd] anticipates the economy to recover and improve leading to revival of consumer confidence. This would result in more and longer visitations to malls.

“Pavilion REIT malls will focus on intensifying digital and media presence to engage and draw visitors to its malls with welcoming and peace-of-mind shopping experiences. Shopper rewards programmes and targeted tenants' activities will also be held to elevate excitement and personalization of activities.

"Operating costs will continue to be monitored to optimise efficiency with spending as required to ensure needs, comfort and safety of its stakeholders are balanced and not compromised,” it noted on its prospects.

In a separate statement, Pavilion REIT Management chief executive officer Datuk Philip Ho said the retail outlook is positive and will revert to some form of normality in 2021.

“Based on global reports, the retail outlook will be positive and revert to some form of normality during 2021. If the curve can continue to flatten in South East Asia, and with the vaccines being delivered in 1Q 2021, we are confident that the retail industry will recover and grow in the year ahead,” he said.

Units in Pavilion REIT finished 0.74% or a sen higher at RM1.37, valuing it at RM4.17 billion. The trading volume stood at 1.87 million units.


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