Thursday 28 Mar 2024
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KUALA LUMPUR: Pavilion Real Estate Investment Trust (REIT) has proposed to acquire da:mén USJ shopping mall for RM488 million. 

In a filing with Bursa Malaysia yesterday, Pavillion REIT said its manager Pavilion REIT Management Sdn Bhd had entered into a conditional sale and purchase agreement with Equine Park Country Resort Sdn Bhd (EPCR) and Revenue Concept Sdn Bhd to acquire the five-storey shopping mall and two-level basement car park located on a 3.45ha freehold tract in Subang Jaya, Selangor.

EPCR is a wholly-owned subsidiary of Taman Equine (M) Sdn Bhd, which in turn is a wholly-owned subsidiary of Global Oriental Bhd.

Pavilion REIT said the proposed acquisition would be funded by debt facilities, which will raise its gearing ratio from 15% as at June 30, 2015 to 23% — still below the gearing limit of 50% prescribed by REIT guidelines.

The acquisition is expected to be completed by the first quarter of 2016.

The trust said the acquisition would provide its unitholders with stable and regular distribution, as well as to enable it to achieve long-term growth in net asset value per unit.

Upon completion, the buy will enlarge Pavilion REIT’s portfolio of investment properties from RM4.4 billion as at June 30, 2015 to RM4.9 billion, and provide geographical diversification to Pavilion REIT’s portfolio.

The deal is subject to the completion of a due diligence review of the property, the completion of construction of shops and offices surrounding the shopping mall, and a certificate of completion and compliance having been issued for the shopping mall and shops, as well as offices.

Pavilion REIT’s (fundamental: 2.8; valuation: 0.15) units closed at RM1.55 yesterday, up four sen or 2.65%, with a market capitalisation of RM4.53 billion.

 

This article first appeared in digitaledge Daily, on September 18, 2015.

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