KUALA LUMPUR (April 28): Pavilion Real Estate Investment Trust (REIT) said its net property income (NPI) rose 59.7% to RM93.99 million for the first quarter ended March 31, 2021 (1QFY22), from RM58.8 million a year ago.

This comes as revenue increased 10% to RM138.78 million from RM126.21 million on higher revenue rent and income from advertising, after more economic sectors and businesses were allowed to re-open under Phase 4 of the National Recovery Plan. 

In a bourse filing, the retail REIT said distributable income doubled to RM67.6 million or 2.21 sen per unit, from RM33.5 million or 1.10 sen per unit previously.

Total property operating expenses fell by RM23.6 million or 34% to RM44.79 million, from RM67.37 million in 1QFY21. 

The REIT said this was mainly due to the rent rebates given to tenants and higher provision for doubtful debts in 1QFY21, which were offset by higher utility cost in 1QFY22 due to the ending of the 10% electricity bill support by the government in December 2021, as well as the imposition of electricity tariff surcharge of 3.7 sen per kilowatt hour to the non-domestic sector from February.

On a quarter-on-quarter basis, Pavilion REIT recorded a 13.7% improvement in NPI from RM82.69 million in 4QFY21, with revenue up 11.7% from RM124.28 million.

Meanwhile, the REIT said its manager's management fee increased by RM1.1 million to RM7.43 million from RM6.37 million on higher net property income, while its borrowing cost declined marginally to RM22.04 million from RM22.08 million.

No fair value loss changes on its investment properties was recorded as at March 31, 2022, the filing showed.

However, Pavilion REIT said it had expended RM3.3 million of its capital commitment during the year, mainly for the development of glass kiosks outside Fashion Avenue and upgrading of the cooling tower at the Pavilion Kuala Lumpur Mall.

In a separate statement, Pavilion REIT’s manager said it is optimistic of a positive outlook for the retail industry and is confident of bringing back more footfall to the malls with increased shopper engagement, to spur spending and reinforce consumer confidence as Malaysia enters an endemic phase. 

The manager added that it is devoted to stay relevant and continue to increase its properties’ occupancy through proactive lease management and leveraging on digital, as well as social media to entice visitors to its malls.

Pavilion REIT shares closed three sen or 2.4% higher at RM1.30 on Thursday (April 28), valuing the retail REIT at RM3.97 billion.

Edited by S Kanagaraju

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