REIT News: Pavillion REIT buying a RM2.2 billion asset
Buying a mall (or part of a mall), could you do that?
“Do you want to own a mall without needing to buy the whole mall?” Yea, it’s possible if you are to invest into a real estate investment trust fund via the stock market. There are plenty of choices actually. Okay, it’s not like hundreds of choices but I think there’s enough for us to pick. Here’s the list of REITs and all the other necessary details to know before you invest into one. I think it is comprehensively explained at dividendmagic.com
For latest news on REIT:
Media Release by PAVILLION REIT:
UNITHOLDERS OF PAVILION REIT AGREE TO ACQUIRE
PAVILION BUKIT JALIL FOR RM 2.2 BILLION
Kuala Lumpur, 22 March 2023: Pavilion REIT, one of Malaysia’s largest retail concentrated real estate investment trusts, has announced at following the unitholders meetings, its non-interested unitholders have agreed to the acquisition of Pavilion Bukit Jalil Mall (PBJ Mall).
The acquisition, initially announced on 22 November 2022 will see MTrustee Berhad, as the trustee of Pavilion REIT, acquiring PBJ Mall and all related assets and rights from Regal Path Sdn Bhd (Regal Path), a wholly-owned subsidiary of Malton Bhd, for RM2.2 billion.
This acquisition is expected to increase the portfolio base of Pavilion REIT to RM 8.3 billion from RM 6.0 billion and provide future growth opportunities for the trust.
Pavilion REIT’s Manager chief executive officer Dato’ Philip Ho said “We are delighted that our unitholders believe in our strategy to grow Pavilion REIT in a sustainable, resilient manner and diversify its income base,”.
“This acquisition is also a testament to the quality of the asset and the strength of the Pavilion brand. It also demonstrates the confidence that Pavilion REIT’s unitholders have in the long-term growth prospects of the Malaysian economy”, he said.
According to the REIT’s filing with Bursa Malaysia on Wednesday (March 22), this endorsement by unitholders also saw the approval of two private placement exercises to partly fund the acquisition, spread between the first tranche of RM 720 million, scheduled to be completed in second quarter of this year and a second tranche of RM 550 million, to be completed latest by the second quarter of 2025. The issue price for new units will also be determined later by way of a book-building exercise whilst the remainder of the acquisition consideration will be funded by bank borrowings.
Gearing for Pavilion REIT will increase from 33.8% as at 31 December 2022 to 36.8% upon completion of both tranches of the placements. This remains comfortably under the gearing limit of 50.0% as permitted under the listed REIT guidelines which would still allow Pavilion REIT head-room to explore potential acquisitions.
In addition, post-private placement of both tranches, unitholders will see a dilution in the unitholdings of its major unitholders which will improve trading liquidity and benefit retail investors.
Pavilion Bukit Jalil is a five-storey shopping mall that spans over 1.8 million square feet. The mall features a wide range of international and local retailers, including fashion, beauty, electronics, and home goods stores. It also boasts a large food court and a range of restaurants and cafes, making it a popular suburban destination for dining and entertainment.
Units of Pavilion REIT closed RM 1.32 on Wednesday, valuing the REIT at RM 4.04 billion.
Property Investment would always be wonderful, REIT is one such way to start
Go to your favourite mall. See if it’s fully tenanted. If it is and you really love this mall, find out if it’s available for you to ‘buy’ in one of the REITs in Malaysia. Buy it, then continue enjoying visiting and spending in your mall. Haha. I always think like that when I buy into any company. I feel I am part of the company’s success too. Cheers.
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