KUALA LUMPUR: En route to a listing, Pavilion Real Estate Investment Trust (REIT) plans to buy three shopping malls, namely the Fahrenheit88, the extension to Pavilion Kuala Lumpur Mall (Pavilion Mall) and a soon-to-be-developed mall in USJ Subang Jaya, within the next two years.
Pavilion REIT Management Sdn Bhd chief executive officer Philip Ho said this is part of Pavilion's growth strategy as outlined in its prospectus.
"We believe our listing will serve to enhance the growth of our retail and corporate property business. We hope to provide a platform for investors to invest in a REIT that provides a stable distribution income, capital appreciation as well as opportunities to benefit from its future acquisitions of yield-enhancing assets," he said at the launch of Pavilion REIT's prospectus here yesterday.
Speaking to reporters later, Ho said Pavilion plans to acquire Fahrenheit88 by 2013, Pavilion Mall's extension by 2014 and a retail mall in USJ Subang Jaya by 2015.
Currently, Pavilion has secured the right of first refusal (ROFR) for the acquisitions of Fahrenheit88, and the Pavilion Mall extension, both of which are close proximity to Pavilion Mall.
It has also obtained the ROFR for a six-storey retail mall to be developed in Subang Jaya.
With an appraised value of RM3.54 billion, Pavilion REIT is currently made up of two assets - Pavilion Mall and Pavilion Tower.
The mall, which contributes 96.4 per cent to the appraised value, has 1.3 million sq ft of net lettable area, with about 450 retail tenants, making it the largest premium retail fashion mall in Malaysia.
The award-winning mall, which was completed in 2007, is strategically located in Bukit Bintang, Kuala Lumpur.
Meanwhile, Ho said, the Pavilion Tower offers a premium corporate and business address and spans over a net leaseable area of about 167,000 sq ft.
Based on the indicative initial public offering (IPO) price of 88 sen per unit, Pavilion REIT expects to raise some RM695 million, making it one of Malaysia's biggest IPOs for the year.
With an appraised value of RM3.4 billion for Pavilion Mall, Pavilion REIT will also bear the distinction of being the Malaysian REIT with the largest portfolio of retail assets upon listing, slated for December 7.
For its IPO, Pavilion is offering 790 million shares, of which 755 million units will be offered to Malaysian and foreign institutional investors and selected investors at the institutional price, while 265 million units have been earmarked for allocation to six identified investors at an offer price of 90 sen per unit or the institutional price, whichever is lower.
The balance 35 million units will be offered to the general Malaysian public and eligible tenants of Pavilion Mall and Pavilion Tower, among others.