Pavilion REIT (Real Estate Investment Trust) is scheduled to be listed in Main Market of Bursa Malaysia on the 7th December 2011. The Initial Public Offering (IPO) consists of 790 million units at an IPO price of RM0.88 per unit.
Out of these, 755 million units are offered to Malaysian and foreign institutional and selected investors and a retail offering of 35 million units to the Malaysian public, eligible tenants and directors of the Manager and its eligible employees, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd.
The institutional price will be determined by way of book building while for the retail application, it is payable at RM0.88 upon application. If the final retail price is lower, the difference will be refunded.
The Pavilion REIT is managed by Pavilion REIT Management Sdn Bhd (the Manager) and they expect to raise RM695.2 million from its Initial Public Offer (IPO). The manager will use part of its proceeds as part payment for the acquisition of the initial property portfolio and to pay for a capital loan.
This IPO is the fourth largest in Malaysia this year after Bumi Armada Bhd, MSM Malaysia Holdings Bhd and UOA Development Bhd.
The Employees Provident Fund, Kumpulan Wang Persaraan, Great Eastern Life and American International Assurance Bhd are among the cornerstone investors for the IPO.
Currently, Pavilion REIT is made up of two assets namely Pavilion Kuala Lumpur Mall (Pavilion Mall) and Pavilion Tower. The total appraised value of Pavilion REIT’s portfolio is RM3.5 billion. The management is also looking for potential acquisition of the Pavilion’s extension and the F&B mall in USJ Subang Jaya in between 2014 to 2015
The table below is the financial summary of Pavilion REIT.
|FYE 2008||FYE 2009||FYE 2010||FPE 2010||FPE 2011|
|Net Property Income (NPI) (RM’000)||165,191||186,361||202,874||102,141||111,583|
In 2011 & 2012, the management intended to pay 100 percent of the distributable income to the unit holders. This translates to a dividend yield of approximately 6.5 percent per annum. Distributable income is the Net Property income (NPI) minus the trust expenses such as management fee, trustee fee and borrowing cost.
The dividend yield is comparable to another local REITs such as Sunway REIT and CapitaMalls Malaysia.
CIMB, Credit Suisse and Maybank are the joint global bookrunners for the deal of the IPO.
For those who are interested in Pavilion REIT IPO, you may subscribe at ATM machines or via Internet Banking.
The retail subscription period is opened until 21st November 2011 at 5pm. Tentative balloting date is on 24th November while the allotment date is on 5th December 2011. Pavilion REIT stock name in Bursa Malaysia is “PAVREIT”.
View Pavilion REIT prospectus in Bursa Malaysia webpage.
What do you think about Pavilion REIT IPO? Are you going to subscribe?