da:mén USJ, a property of Pavilion REIT

Malaysia-listed retail REIT, Pavilion REIT, announced on 17 September that it has entered into a conditional sale and purchase agreement with Equine Park Country Resort Sdn Bhd and Revenue Concept Sdn Bhd to acquire da:mén USJ for a total purchase consideration of MYR488 million (USD115 million).

da:mén USJ is a five-storey shopping mall with a lower ground floor of approximately 420,920 square feet of net lettable area and two levels of basement car park with 1,672 car parking bays. The property sits on a piece of freehold land measuring approximately 3.499 hectares.

“The property, located approximately 20 kilometres northeast of Kuala Lumpur city centre, is expected to commence operation in November 2015 with a trade mix of food and beverage, beauty and fashion”, said Pavilion REIT in its statement on the acquisition.

“Besides providing geographical diversification to Pavilion REIT’s portfolio of investment properties, upon completion, the proposed acquisition will enlarge Pavilion REIT’s portfolio from MYR4.4 billion as at 30 June 2015 to MYR4.9 billion”, it added.

The REIT has also described the proposed acquisition as one that will be accretive to its distributable income and said that it intends to finance it fully with debt. This is expected to increase Pavilion REIT’s gearing ratio from 15% as at 30 June 2015 to 23%.

The acquisition is expected to be completed by the first quarter of 2016. Units of Pavilion REIT are currently listed on the Bursa Malaysia at MYR1.55, up 2.65% from its previous close. (Image © da:mén USJ)

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.