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KUALA LUMPUR: Pavilion Real Estate Investment Trust
(REIT) has issued a circular seeking approval from its non-interested unitholders for the acquisition of Pavilion Bukit Jalil (PBJ Mall) for RM2.2bil.
The REIT said in a statement the proposed acquisition will be discussed at the extraordinary general meeting to be held on March 22, 2023.
MTrustee Bhd, the trustee of Pavilion REIT, had on Nov 22, 2022, signed a conditional sale and purchase agreement (SPA) to acquire PBJ Mall with all related assets and rights from Regal Path Sdn Bhd, a wholly-owned subsidiary of Malton Bhd, for RM2.2bil.
According to the statement, the proposed acquisition of PBJ Mall aligns with Pavilion REIT's strategy to expand its portfolio of prime retail assets in Malaysia to six, from its current portfolio that consists of Pavilion Kuala Lumpur Mall, Elite Pavilion Mall, Intermark Mall, DA MEN Mall and Pavilion Tower.
Pavilion REIT Management Sdn Bhd CEO Datuk Philip Ho said the acquisition is accretive to the REIT's distributable income and would have a favourable impact to its total portfolio and future expansion.
“The acquisition of PBJ Mall is expected to contribute positively to Pavilion REIT’s future growth, enlarging its portfolio base to RM8.3bil from RM6bil.
"In addition, post-private placement of both tranches, unitholders will see a decrease in the major unitholders' unitholdings and better public spread," he said.
He added that the timing of the proposed acquisition and capital-gathering exercise is affirmed by several factors, including the reopening of the economic sector, higher retail spending and footfall, and the influx of tourists and travelers.
In 2022, Pavilion REIT's net property income was RM364.2mil, up from RM236.6mil a year earlier.
It declared a distribution per unit of 8.37 sen or distribution yield of 6.9% attributed to higher rental billings, increase in revenue rent and income from advertising and marketing events as all economic sectors resume their business post-pandemic.
