KUALA LUMPUR (Nov 15, 2011): Pavilion Real Estate Investment Trust (REIT), which is expected to raise RM695.2 million from its initial public offering (IPO), has secured six cornerstone investors to take up 265 million units.
The cornerstone investors are Permodalan Nasional Bhd, Employees Provident Fund Board, Kumpulan Wang Persaraan (Diperbadankan), Great Eastern Life Assurance (Malaysia) Bhd, American International Assurance Bhd and HwangDBS Investment Management Bhd.
The IPO will involve 790 million units of which 755 million units will be offered to Malaysian and foreign institutional investors and selected investors at the institutional price to be determined by way of book building.
The remaining 35 million units will be offered to the public, eligible tenants of Pavilion Mall and Pavilion Tower, directors and employees of Pavilion REIT Management, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd at an indicative retail price of 88 sen per unit.
Pavilion REIT Management is 51% owned by Urusharta Cemerlang Development and 49% by Urusharta Cemerlang Project Corporation.
At 88 sen per unit, Pavilion REIT Management expects Pavilion REIT to provide a distribution yield of 6.41% and 6.51% for one-month forecast period ending Dec 31, 2011 and for the financial year ending Dec 31, 2012, respectively.
Pavilion REIT Management CEO Philip Ho said Pavilion REIT is expected to achieve a market capitalisation of RM2.6 billion upon listing, based on 88 sen a unit.
Pavilion REIT will have Pavilion Kuala Lumpur Mall and Pavilion Tower in its portfolio when listed on the Main Market of Bursa Malaysia on Dec 7. It will be one of the country's largest listed REITs with its initial property portfolio having a total appraised value estimated at RM3.5 billion.
Ho said the construction of the Pavilion extension is expected to start in the first half of 2012 for completion in three years.
On the IPO proceeds, he said the bulk will be used to pay for the acquisition of the initial property portfolio and the rest for working capital and listing expenses.
Pavilion REIT Management, he said, has forecast the REIT to register a revenue of RM314 million and net property income of RM220 million for the financial year ending Dec 31, 2012.
For the year ended Dec 31, 2010, Pavilion REIT posted a revenue of RM291 million and net property income of RM203 million.
