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Saturday, October 22, 2011

Main Market-bound Pavilion REIT aims to raise RM695.2mil

PETALING JAYA: Pavilion real estate investment trust (REIT), which is en route to a listing on the Main Market, is offering 790 million units under its initial public offering (IPO) to retail and institutional investors.

According to its prospectus exposure on the Securities Commission website, Pavilion REIT’s retail offering includes 31 million units for application by the public that would represent 1.03% of the trust’s total three billion units.

Under the retail offering, four million units, representing 0.13%, will be allocated to eligible tenants of Pavilion REIT’s initial portfolio, the directors of Pavilion Reit Management Sdn Bhd and eligible employees of Pavilion Reit Management Sdn Bhd, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd.

The institutional offering, consisting of 755 million units (representing 25.17% of the total issued units) would be for application by Malaysian and foreign institutional investors and selected investors.

According to the prospectus exposure, the retail offering would be offered at 88 sen per unit while the price for the institutional offering would be determined by way of a bookbuilding process.

“Based on an illustrative average offering price of 80 sen per offer unit, the offering is expected to raise gross proceeds of RM695.2mil arising from the issuance of 790 million offer units,” it said. The initial portfolio comprises the Pavilion Kuala Lumpur Mall and Pavilion Tower, which have a total net lettable area of 1.3 million sq ft and 167,407 sq ft respectively.

On its outlook, Pavilion REIT, which is partly-owned by the Qatar Investment Authority, said its operations depended to a large extent on the performance of the Malaysian economy and conditions of the local real estate market. “A decline in Malaysia’s economy could adversely affect Pavilion REIT’s results of operations and future growth.”

The performance of Pavilion REIT may also be adversely affected by a number of local real estate market conditions, such as the competitiveness of competing retail and office properties or the supply and demand of retail and office properties.

By The Star

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