Pavilion – thestar

Pavilion REIT posts second-quarter proit

Pavilion Real Estate Investment Trust (REIT) posted a net profit of RM47.7mil, or 1.59 sen earnings per share on revenue of RM82.8mil for the second quarter ended June 30.

For the first six months, Pavilion REIT posted a net profit of RM95.5mil. Its revenue stood at RM168.1mil. There were no comparative figures reported.

Pavilion REIT also declared an income distribution comprising 3.28 sen per unit (taxable) and 0.08 sen per unit (non taxable) totalling 3.36 sen per unit.

Pavilion – BT

Pavilion REIT's earnings forecast raised

Maybank Kim Eng Research has raised the financial year 2012-2014 earnings forecast of Pavilion Real Estate Investment Trust (Pavilion REIT)by eight to 8.4 per cent.

It also factored in a higher rental growth and turnover rent as well as higher occupancy rate.

Maybank Kim Eng in a research note today said Pavilion REIT's first half net profit of RM95.6 million was above the research house and consensus expectations at 55 to 56 per cent.

"This was due mainly to higher-than-expected retail turnover rent and rental hikes," it said.

Going forward, it said piling works of the Pavilion KL Mall extension will commence in the third quarter, whilst construction of the sub-urban mall in Subang Jaya is ahead of schedule.

"As for the Fahrenheit 88 mall, the management is monitoring the leases due for renewal in the third quarter, rental reversions and tenancy profile.

"When acquired, we expect these properties to raise Pavilion REIT's asset size by more than 41 per cent from RM3.6 billion currently," it added.

Maybank Kim Eng has maintained a "hold" call on Pavilion REIT but revised upward the target price to RM1.40 from RM1.26 previously. — BERNAMA


Pavilion – thestar

PavREIT profit beats estimates

By RHB Research House

Market Perform (Downgraded)

Target Price: RM1.22

PAVILION REIT’S (PavREIT) first-quarter net profit of RM47.8mil makes up 27.1% of our full-year net profit forecast, slightly above our and consensus full-year estimates. No dividend was declared for the quarter, as PavREIT makes its distribution semi-annually.

The higher-than-expected revenue contribution in the first quarter of financial year 2012 was mainly attributed to the increased rental revenue and sales turnover due to the Lunar New Year and Formula 1 GP events; and the increased shopper traffic from the opening of the linked bridge between KL City Centre and Pavilion, where the manager estimates traffic footfall of 15,000-20,000 people per day.

About 17% of the net lettable area (NLA) due to expire this year was renewed in the first quarter, with rental reversion of about 10%.

Occupancy rates had dropped to around 94% for Pavilion Mall due to its refurbishment works but remain stable for Pavilion Tower.

Note that the manager expects Pavilion Tower to be fully occupied by the third quarter, as a tenant has taken up about 10,000 sq ft NLA (about 6% of Pavilion Tower’s total NLA) and is expected to move in once renovation is completed in June or July.

The conversion of 68,000 sq ft of space previously occupied by TANGS has kicked off in the first quarter. The refurbishment of the space (to be known as Fashion Avenue) is expected to be completed in September, with a soft launch targeted in August. The manager is confident that the space will be fully occupied upon it is launched in September.

Our dividend discounted model-based fair value is kept at RM1.22. However, we downgrade our call on PavREIT to “market perform” (from “outperform”), as the share price has strengthened in recent weeks, hence there is now minimal potential upside to our indicative fair value of the stock.

We continue to like PavREIT due to its large asset size, quality assets and significant long-term potential as rental cycle is still in its early stages.