KUALA LUMPUR (Aug 5): Pavilion Real Estate Investment Trust's (REIT) net property income for the second quarter ended June 30, 2021 (2QFY21) rose 21.88% to RM47.62 million, from RM39.07 million a year ago, due to lower property operating expenses.

Its quarterly revenue, however, slipped 1.27% to RM124.78 million, from RM126.39 million a year ago, its filing with Bursa Malaysia showed.

The REIT has announced an interim income distribution of 1.83 sen per unit for the financial year ending Dec 31, 2021, which will be paid on Sept 10.

According to the trust, total property operating expenses for 2QFY21 decreased by RM10.2 million or 12% compared with in 2QFY20, mainly due to higher provision for doubtful debts in 2QFY20.

Meanwhile, lower maintenance and marketing expenses were incurred during the period as the nationwide Movement Control Order was implemented from May 12, which meant that shopping malls were not allowed to operate, with the exception of tenants that fall under the essential services.

"These have resulted in higher net property income by RM8.5 million or 22% in 2QFY21 compared to (in) 2QFY20," it said.

Due to lower operating, marketing and promotional expenses, the group's net property income for the half year ended June 30, 2021 grew 2.18% to RM106.46 million, from RM104.19 million a year earlier.

Its revenue, however, fell 3.72% to RM251 million, from RM260.71 million, mainly due to lower occupancy rates for shopping malls because of non-renewal of some expired tenancies, lower income from marketing events and advertising.

With the vaccination programme progressing well, the group opined that gradual recovery in the retail industry is expected to begin towards the end of this year.

"In the meantime, Pavilion REIT malls are supporting their retailers with rebates, digital marketing promotion, providing drive-thru pickup areas and engaging consumers with community messages as well as essential business updates. Social media are primarily used as a key platform for contests offering shopping and dining vouchers," it said.

Pavilion REIT closed one sen or 0.74% higher at RM1.36, valuing the group at RM4.11 billion.

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