KUALA LUMPUR: Pavilion Real Estate Investment Trust(REIT) earnings follow better conditions in the retail sector as economic conditions improve and movement restrictions continue to ease.
The REIT announced in a filing with Bursa Malaysia a net profit of RM54.98 million in the second quarter ended June 30, 2022, more than double its profit in the same quarter last year, as it sees a resurgence in rental income and advertising after reopening. economy.
Total revenue for the quarter amounted to RM141.49 million, an increase of 13.39% over the previous corresponding quarter, with a higher contribution from all its retail businesses, l exception of the Intermark shopping center.
Lower rental discounts to tenants in the quarter under review, compared to 2QFY21, helped reduce property operating expenses by 24%.
Operating expenses would have been even lower without a higher allowance for bad debts and the cost of utilities due to the 10% government electricity rebate ending in December 2021 as well as the imposition of a surcharge on electricity tariffs from 1 February 2022.
Maintenance and marketing expenses also increased due to the resumption of marketing activities and events with the reopening of the economy.
Pavilion REIT’s second-quarter payout per unit rose to 1.87 sen from 0.73 sen in the same quarter last year. An interim distributable income of 4.08 sen per unit or RM124.6 million will be payable on September 2, 2022.
According to the REIT manager, the recovery in the retail sector should be sustainable while store traffic has returned to pre-Covid levels.
However, the manager also pointed out that inflation and rising interest rates will affect discretionary spending and consumer purchasing power.
“Commitments have been made with tourism agencies to boost tourism programs with more activities and events planned for the year.
“The manager will continue to increase the occupancy rate of its properties through proactive lease management and controlling its operating costs,” he said.
