The largest retail REIT in the country offers premium of 12 sen

KUALA LUMPUR: Pavilion Real Estate Investment Trust (REIT) made a commendable debut on the Main Market of Bursa Malaysia to close at RM1.02, offering a premium of 12 sen over its institutional price of 90 sen.

The largest retail REIT in the country was also the most traded counter yesterday with 197.3 million shares changing hands, while the FTSE Bursa Malaysia (FBM) KLCI was up 0.14% or 2.07 points to 1,482.99.

Pavilion REIT opened at RM1.03 with 15.7 million unit shares traded.Pavilion REIT Management Sdn Bhd chief executive officer Philip Ho said he was quite happy with the opening price.

“Moving forward, we are committed to enhance unitholders’ return and value through the organic growth of our existing portfolio as well as visible growth via acquisition,” he told reporters after the company’s listing ceremony yesterday.

Currently, Pavilion REIT consists of Pavilion KL Mall - a retail mall with a net lettable area of 1.3 million sq ft and 450 retail tenants as well as the Pavilion Tower that contributed 96.4% to the group’s revenue.

Ho said the company would continue to focus on the retail sector and seek opportunities to expand assets in Penang, Johor and the Klang Valley to build up its portfolio.

“It’s hard to put a figure to our expansion but we will evaluate any financially viable investment opportunity that comes around,” he said.

Ho said expansion was on top of the company’s trustees that had signed three rights of first refusal (ROFR) to acquire Farenheit88, the Pavilion Mall’s extension, and also another mall in USJ, Subang Jaya.

On overseas expansion, he said the management would evaluate opportunities when presented, but presently the company’s focus was the local market.

The institutional offering of the Pavilion REIT initial public offering (IPO) was oversubscribed by 28 times and the retail offering was oversubscribed by 7.5 times.

Pavilion REIT IPO raised gross proceeds of RM710mil.

“We believe this listing exercise will provide investors with an opportunity to invest in a REIT that provides stable distribution of income and strong capital appreciation potential,” he said.

Pavilion REIT Management or the manager principle activity is to manage and administer Pavilion REIT. The manager is 51%-owned by Urusharta Cermerlang Development Sdn Bhd and the remaining 49% owned by Urusharta Cemerlang Project Corp Sdn Bhd.