Pavilion REIT’s FY23 Income After Taxation Rises To RM431.8 Million

Pavilion REIT’s gross revenue for the financial year ended 31 December 2023 grew 31 % or RM172.5 million to RM723.8 million as compared to the preceding year end. Income after taxation also increased by 9% or RM34.0 million to RM431.8 million resulting in annual distributable income of RM307.4 million or 9.01 sen per unit, which is an increase of 7.6% as compared to 8.37 sen for financial year ended 2022.

This translates to distribution yield of 7.2% against market price of RM1.25. Distribution of 4.60 sen per unit payable half yearly would next be payable on 29 February 2024. Fair value gain of RM146.5 million arising from re-valuation of its investment properties was recognised in the current quarter mainly due to increase in Pavilion Kuala Lumpur mall’s market value from RM5.00 billion to RM5.15 billion. Borrowing cost increased from RM25.2 million to RM43.8 million due to increase in the overnight policy rate as well as drawdown of additional borrowings for acquisition of Pavilion Bukit Jalil. RM4.3 million for current reporting quarter or RM10.0 million year to date was also recognized under borrowing cost as present value adjustment to deferred acquisition payments. These resulted in gearing on borrowings of 38% with average interest cost of 4.7%.

In a filing to Bursa Malaysia today, Pavilion REIT announced total gross revenue of RM208.2 million for the fourth quarter ended 31 December 2023, an increase of RM67.1 million or 48% as compared to the same quarter in the preceding year of RM141.1 million. This increase is contributed by Pavilion Bukit Jalil that was acquired on 1 June 2023, higher property occupancies that led to increase in rental income as well as higher revenue rent from existing retail malls and advertising income.

Total property operating expenses were higher by RM29.3 million or 66% as compared to the same quarter the preceding year due to operating expenses from Pavilion Bukit Jalil and increase of electricity tariff surcharge from 3.7 sen to 17 sen per kilowatt hour from 1 July 2023.

The group said these factors resulted in net property income increasing by RM37.8 million or 39% for the fourth quarter of 2023 as compared to the same quarter in 2022.

The Manager of Pavilion REIT expects an increase in foreign tourist arrival. However, private consumption is expected to moderate as compared to the previous year amid ongoing cost inflationary pressures, driven by new taxes and targeted subsidy rationalization. Despite these challenges, domestic demand is expected to remain resilient with turnaround in
external demand. Pavilion REIT malls intends to have more dynamic and engaging experiences for its visitors with more regional tourism efforts to be introduced to boost tourism arrivals and spending

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