by TMR / pic by TMR FILE
PAVILION Real Estate Investment Trust (REIT) posted lower net profit of RM20 million for the third quarter ended Sept 30 (3Q21), compared to RM32 million it made in 3Q20.
In a filing to Bursa Malaysia yesterday, the retail REIT announced total gross revenue of RM113.3 million or 4.5% lower year-on-year (YoY) due to lower percentage rent and advertising income stemming from the various Movement Control Orders (MCOs) and National Recovery Plan (NRP) imposed by the government arising from the Covid-19 pandemic.
Total property operating expenses were higher by RM8 million or 13.8% compared to the same quarter of the preceding year, mainly due to the rent rebates extended to tenants not allowed to operate during the MCOs period.
This was mitigated by utilities savings, lower property upkeep cost and lower marketing expenses.
This resulted in net property income reducing by RM13.4 million or 22% YoY in the 3Q21.
“With the Klang Valley transiting into Phase 4 of the NRP, the lifting of interstate and overseas travel restrictions, alongside the relaxation of quarantine measures, the retail,
tourism and hospitality industries are set for recovery, which will bring positive economic outcomes and augur well for businesses,” the group said in a separate statement.
Pavilion REIT’s CEO Datuk Philip Ho said despite a bumpy year so far, the group is optimistic of the recovery and growth of the retail industry in the year ahead.
“Pavilion REIT is determined to remain resilient as the world transits from epidemic to endemic phase and is committed to driving performance and creating long-term value to its stakeholders.
“We will continue to support our tenants through proactive lease management and aggressive marketing strategies to welcome shoppers back. These include the introduction of loyalty programmes, leveraging on technology to reach new audiences such as the launch of the Pavilion KL mobile app and exciting shoppers with new services and experiences, while always ensuring peace-of-mind shopping,” he added.
Total revenue for year-to-date Sept 30 was RM364.3 million, lower by RM15.1 million or 4% YoY.
The decrease was mainly due to lower occupancy for shopping malls arising from non-renewal of some expired tenancies and deferment of rent commencement date for some tenants. Income from percentage rent, marketing events and advertising were also affected.
Distributable income for the quarter under review was RM22 million or 0.73 sen per unit, consisting of income after tax of RM20 million and non-cash adjustments for depreciation of RM100,000, amortisation of borrowings transaction cost of RM400,000 and 25% of manager’s management fees payable in units amounting to RM1.5 million.