Image from: Pavilion Bukit Jalil Facebook Page

MTrustee Berhad, the trustee of Pavilion REIT has entered into a conditional sale and purchase agreement to acquire Pavilion Bukit Jalil (“PBJ Mall”) from Regal Path Sdn Bhd for RM2.20 billion. Pavilion REIT Management Sdn Bhd (“the Manager”) also proposes to undertake a private placement exercise to raise up to RM1.27 billion, with the issue price to be determined later through a book-building exercise.

The proposed acquisition is expected to be completed in the second quarter of 2023 whereas the proposed placements are expected to be implemented in tranches, subject to compliance with condition precedents.

This will enlarge Pavilion REIT’s assets to six, from the current line-up that comprises Pavilion Kuala Lumpur Mall, Pavilion Tower, Intermark Mall, DA MEN Mall and Elite Pavilion Mall. The Manager said the acquisition of PBJ Mall is expected to contribute positively to Pavilion REIT’s future growth, adding an additional 27% to Pavilion REIT’s enlarged total assets under management.

This proposed acquisition is timely following the resumption of economic activities and the expectation of better employment opportunities post the COVID-19 pandemic.

The projected positive spillover can be seen in Pavilion REIT’s nine-months profit after tax for 2022 of RM181.4 million (+153% YoY) and distribution per unit (DPU) to 30 September 2022 of 6.16 sen, attributed by higher revenue rent, income from advertising and marketing events as well as lower property operating expenses.

With a net lettable area of 1.8 million square feet, PBJ Mall has rejuvenated Bukit Jalil into a vibrant destination for business, shopping, dining, leisure and entertainment on a 28-acre freehold plot. 

Completed a year ago, the last six months saw PBJ Mall recording an average of 1.2 million monthly footfall with an occupancy rate of 78.2%.

The mall houses five levels of retail space, two levels of basement parking with 4,800 car park bays and a Piazza (centralized green area) - with all these integrated seamlessly as part of the 50-acre Bukit Jalil City integrated lifestyle development comprising 3 storey shop offices and residences (The Park and The Park 2).

“The retail industry is expected to stay relatively resilient for the time being, even with the environment indicating risks of higher inflation. With retail sales growth expected to normalise, Pavilion REIT remains committed to bringing long-term growth and value for our stakeholders”, said Dato’ Philip Ho, the Chief Executive Officer of the Manager.

Tourist arrivals are also expected to fully return to pre-pandemic levels by 2024 as more countries relax their respective COVID-19 prevention measures, including Malaysia. Observers are also optimistic that China will eventually loosen travel restrictions on its citizens in the near future.

(24 November 2022)