KUALA LUMPUR (Jan 15): Pavilion Real Estate Investment Trust (Pavilion REIT)’s annual distribution per unit for the full year ended Dec 31, 2014, improved by 0.6 sen or 8.2% to 7.96 sen, compared to 7.36 sen in 2013. This translates into a distribution yield of 5.5%, based on the REIT’s closing price of RM1.46 as at the end of last year.

In a statement, Pavilion REIT (fundamental score: 2.8) said the distributable income of 4.12 sen for the second half of 2014 (2HFY14) is expected to be payable on Feb 27, 2015. The REIT closed 1 sen lower at RM1.46 today, with a market capitalisation of RM4.43 billion.

According to the REIT, which owns the Pavilion shopping mall in downtown Bukit Bintang, its gross revenue increased by 7.1% to RM402.1 million in 2014, as compared to 2013. This resulted in net property income of RM282.7 million, or 70.3% of gross revenue.

Meanwhile, revaluation of the Pavilion mall resulted in the increased of its fair value by RM278.1 million to RM4.3 billion, leading to a pre-tax profit of RM510.5 million or an increase of 56% year-on-year. This impact gave rise to an increase in the REIT’s net asset value per unit to RM1.26, from RM1.17 as at end of 2013.

“Although 2015 is expected to remain challenging for the retail sector due to weak consumer sentiment from impending GST implementation, weakening of Ringgit Malaysia and inflationary pressures, the Manager will continue to engage with its stakeholders to continue to attract shoppers, manage its operational cost effectively and seek investment prospects to ensure the best achievable return for unitholders,” said the manager of Pavilion REIT.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)