The year-end season will be a boon for Pavilion Real Estate Investment Trust, boosting its fourth-quarter 2021 (Q421) earnings, says RHB Research in a report published today.
The research firm believes that Pavilion Kuala Lumpur will be a key beneficiary of a return in foot traffic, particularly in the seasonally strong fourth quarter.
The Pavilion Kuala Lumpur will also be a key beneficiary even beyond, as international borders are still expected to remain closed until the second half of 2022 (2H22).
“While reversion rates are likely to remain muted going into the financial year 2022 (FY22), considering the operational challenges for retailers at large, we believe rental assistance granted in FY22 will be at a significantly lower quantum than in FY21.
“The occupancy for Pavilion KL should remain robust at more than 90 per cent,” it says.
“We maintain Buy on Pavilion Reit with a target price of RM1.55,” it adds.
Pavilion’s net property income (NPI) declined 22.02 percent to RM47.47 million in the third quarter ended September 30, 2021 (3QFY21) from RM60.88 million in the same quarter last year due to higher operating expenses and reduced revenue.
Meanwhile, its quarterly revenue fell 4.55 percent to RM113.32 million from RM118.72 million the previous year, owing to decreased revenue rent and advertising revenues from the Pavilion Kuala Lumpur mall.
According to the trust’s Boursa filing on Thursday, Elite Pavilion Mall’s gross revenue was lower mostly owing to loss of advertising and leasing income from the different Movement Control Orders (MCOs) and National Recovery Plan.
