Pavilion REIT said to raise RM710m IPO

Pavilion Real Estate Investment Trust, a Malaysian shopping mall trust part-owned by Qatar Investment Authority, is raising RM710 million (US$223 million) in an initial public offering, two people with knowledge of the matter said.

The company plans to sell units at 90 sen apiece to institutions and at 88 sen to retail investors, said the people, who asked not to be identified as pricing details are private. Pavilion REIT had marketed the units at 88 sen to 90 sen.

The IPO will be the Southeast Asian nation’s fourth biggest this year, after share sales by Bumi Armada Bhd, UOA Development Bhd. and MSM Malaysia Bhd. Pavilion REIT said earlier this month it’s seeking acquisitions within the country and throughout Asia.

Kuala Lumpur-based Pavilion REIT, which is expected to list next month, owns the Pavilion mall and an adjacent office tower in the capital’s Bukit Bintang area, which Malaysia is developing to rival Singapore’s Orchard Road. The mall, with a gross floor area of 2.2 million square feet, has an appraised value of RM3.4 billion as of June 1, according to its prospectus, and houses luxury retailers including Bulgari SpA and Prada SpA.

Qatar Investment Authority will be the single largest owner of Pavilion REIT with a 36 percent stake, according to its prospectus. The trust aims to start trading in Kuala Lumpur on Dec. 7.

Pavilion REIT plans to pay out at least 90 per cent of its distributable income on a half-yearly basis from 2012, it said. From the listing date to Dec. 31, 2012, it will distribute 100 per cent of its income. CIMB Group Holdings Bhd, Malayan Banking Bhd and Credit Suisse Group AG are among managers of the sale. -- Bloomberg