This article first appeared in The Edge Financial Daily, on January 15, 2016.

KUALA LUMPUR: Pavilion Real Estate Investment Trust (Pavilion REIT) recorded a 4.93% increase in its net property income for the fourth quarter of the financial year ended Dec 31, 2015 (4QFY15) to RM73.96 million, from RM70.49 million a year ago.

Its revenue in 4QFY15 inched up 2.67% to RM103.46 million from RM100.77 million in 4QFY14.

Its distribution per unit (DPU) came to 4.14 sen for the quarter, compared with 4.12 sen last year, bringing its full-year DPU to 8.23 sen, up 3.39% from FY14’s 7.96 sen.

Meanwhile, net profit for 4QFY15 came in at RM102.08 million, 69.55% lower than 4QFY14’s RM335.18 million. Pavilion REIT said there was lower fair value gain from investment properties recognised in the quarter under review, compared to a year ago.

Taking out the fair value gain, the REIT said net profit for 4QFY15 was higher than 4QFY14, due to higher net property income and a RM600,000 net gain on the disposal of a 1,050-sq m area in Pavilion Kuala Lumpur.

For FY15, Pavilion REIT’s net property income rose 3.11% to RM291.54 million. Revenue went up a similar quantum of 2.94% to RM413.93 million, from RM402.09 million a year earlier.

“The achievement was mainly contributed by rentals from 2014 asset enhancement areas, such as Beauty Precinct, extensions of ‘Couture Pavilion’ on Level 2 and Dining Loft on Level 7, as well as the increase in service charge that was revised in May 2014,” the trust said.

Net profit, however, fell 44.69% year-on-year to RM282.34 million, from RM510.48 million in FY14.

On prospects, Pavilion REIT said the retail environment is expected to be challenging, but it will continue creating differentiation and key attractions to build shopping experiences to attract and retain shopper loyalty. 

Another Bursa Malaysia filing by Pavilion REIT showed it recorded a RM41.04 million or 0.92% increase in Pavilion Kuala Lumpur’s net book value to RM4.31 billion. Its investment properties, which also include Pavilion Tower, are now valued at RM4.48 billion.

Pavilion REIT closed flat at RM1.55 yesterday. Based on a DPU of 8.23 sen, the REIT’s yield stood at 5.31%. Its market value stood at RM4.68 billion.