Pavilion REIT fixes private placement issue price at RM1.22, to raise RM720m

• Pavilion REIT said the tranche 1 placement issue price represents a discount of 6.6% to the five-day volume-weighted average price (VWAP) including May 16 of RM1.31, following its book building exercise.

KUALA LUMPUR (May 17): Pavilion Real Estate Investment Trust (Pavilion REIT) has fixed its tranche 1 private placement price at RM1.22 per unit to raise some RM720 million.

In a filing to Bursa Malaysia on Wednesday (May 17), the REIT said the proceeds raised will be used to partially fund its RM2.2 billion acquisition of Pavilion Bukit Jalil (PBJ Mall) from Malton Bhd.

Pavilion REIT said the tranche 1 placement issue price represents a discount of 6.6% to the five-day volume-weighted average price (VWAP) including May 16 of RM1.31, following its book building exercise.

In November last year, Pavilion REIT and Malton’s wholly owned subsidiary Regal Path Sdn Bhd inked a sale and purchase agreement to acquire PBJ Mall for RM2.2 billion.

The acquisition of PBJ Mall from Regal Path is part of the REIT manager's strategy to expand its portfolio of prime retail assets in Malaysia.

Its current portfolio consists of Pavilion Kuala Lumpur Mall, Elite Pavilion Mall, Intermark Mall, DA MEN Mall, and Pavilion Tower.

The REIT manager said the acquisition of PBJ Mall is expected to contribute positively to Pavilion REIT’s future growth, adding an additional 27% to Pavilion REIT’s enlarged total assets under management.

“This proposed acquisition is timely following the resumption of economic activities and expectation of better employment opportunities post Covid-19 pandemic,” the company said in a filing on Nov 22, 2022.

Under the first tranche of the RM720 million book-building exercise, Pavilion REIT will utilise the proceeds for the repayment of Regal Path’s bank borrowings, defray Pavilion REIT’s transaction expenses, and other expenses for the placement exercise.

At the time of writing, Pavilion REIT gained 0.78% or one sen to RM1.30 per unit, valuing the company at RM3.98 billion.