Pavilion REIT eyes RM695.2m IPO

Tuesday, 15 November 2011 09:17

KUALA LUMPUR (Nov 14): Pavilion Real Estate Investment Trust (Pavilion REIT), which is en route for a main market listing on Dec 7, will use part of its proceeds as part payment for the acquisition of the initial property portfolio and to pay for a capital loan.

The company, which is managed by Pavilion REIT Management Sdn Bhd (the Manager), expects to raise RM695.2 million from its Initial Public Offer (IPO).

Pavilion REIT is currently made up of two assets — Pavilion Kuala Lumpur Mall (Pavilion Mall) and Pavilion Tower.

The Manager’s chief executive officer Philip Ho said the total appraised value of Pavilion REIT's initial property portfolio is RM3.5 billion.

"With the inclusion of Pavilion Mall which forms 96.4 per cent of the total appraised value of Pavilion REIT's initial property portfolio, Pavilion REIT will become one of Malaysia's largest listed REITs with the largest exposure to the retail sector of any listed Malaysian REIT by appraised value.

"Based on an indicative retail price of 88 sen per unit, Pavilion REIT is expected to achieve a market capitalisation of RM2.6 billion upon listing," he said in his speech during the prospectus launch here today.

Pavilion REIT is offering 790 million units under its IPO to retail and institutional investors at between 88 sen to 90 sen each.

Pursuant to the IPO, 755 million units will be offered to Malaysian and foreign institutional investors and selected investors at the institutional price (other than cornerstone investors).

Out of the amount, 265 million shares have been reserved for cornerstone investors namely Employees Provident Fund Board, Great Eastern Life Assurance (Malaysia), HwangDBS Investment Management, Kumpulan Wang Persaraan (Diperbadankan), Permodalan Nasional Bhd and American International Assurance Bhd.

The remaining 35 million units will be offered to the general public in Malaysia, eligible tenants of Pavilion Kuala Lumpur Mall and Pavilion Tower, directors of the Manager and its eligible employees, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd.

Meanwhile, speaking to reporters here today, Ho said the Manager plans to inject more properties into Pavilion REIT besides the Pavilion Mall and Pavilion Tower and has identified three retail developments in the Klang Valley to acquire in the future.

"We are looking for potential rights of first refusal to acquire Farenheit88, the Pavilion’s extension which is on the side of the current Pavilion Mall and also another mall in USJ Subang Jaya, a small entertainment food and beverages (F&B) mall," he said.

Ho said the Manager is looking into the potential of injecting the properties into the Pavilion REIT eventually.

"I believe Farenheit88 just opened its doors late last year, we're waiting for the mall to mature a little bit, and then we will evaluate the situation, maybe in 18-24 months then," he said, adding Pavilion REIT plans to acquire Farenheit88 in 2013.

As for the Pavilion's extension, to be developed by the sponsor company Urusharta Cemerlang Sdn Bhd and expected to start construction in the first half of 2012, Ho said the Pavilion REIT will buy it based on evaluation upon its completion in the next two or three years.

"We are looking for potential acquisition of the Pavilion's extension and the F&B mall in USJ Subang Jaya between 2014 to 2015, as it takes a few years to develop a good asset," Ho added. — Bernama

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