Pavilion REIT recognised total gross revenue of RM199.2 million in Q3 2023, an increase of RM60.3 million or 43% as compared to Q3 2022 of RM138.9 million. The increase it said was mainly contributed by income from new property, Pavilion Bukit Jalil which was acquired on 1 June 2023, higher occupancy rates, and higher revenue rent from existing retail malls. Income from advertising and marketing events also increased as compared to Q3 2022.
Total property operating expenses were higher by RM29.1 million or 60% as compared to Q3 2022 mainly due to operating expenses incurred for the new property and the increase of electricity tariff surcharge by the government from 3.7 sen to 17 sen per kilowatt hour (kWh) from 1 July 2023. These have resulted in higher net property income by RM31.1 million or 35% in Q3 2023 as compared to Q3 2022.
The manager’s management fee incurred for Q3 2023 was higher by RM2.9 million compared to the same quarter last year. This was in line with the increase in total asset value and net property income. Borrowing cost incurred during the quarter has increased by RM19.6 million as compared to Q3 2022 due to the drawdown of additional borrowings for the acquisition of investment property and Bank Negara Malaysia raising the overnight policy rate by 25 basis points each in September 2022, November 2022, and May 2023. RM4.3 million was also recognised in borrowing cost as present value adjustment to deferred
acquisition payments.
These have resulted in income before taxation being higher by RM9.4 million or 15% as compared to Q3 2022.
Distributable income for the quarter under review was RM78.3 million, consisting of income after tax of RM70.6 million and non-cash adjustments for depreciation of RM0.2 million, amortisation of borrowings transaction cost of RM0.6 million, Manager’s management fee payable in units amounting to RM2.6 million and present value adjustment on deferred acquisition payments of RM4.3 million
