Pavilion REIT has indicated that it expects 2018 to be an operationally tougher year compared to 2017, amid an impending office glut in the Klang Valley area, and an indefinite freeze on the development of luxury properties.

Effective from 1 November 2017, the Malaysian government imposed an indefinite freeze on approvals for luxury property developments, including shopping malls and condominiums with units in the MYR1 million (USD250,000) range.

The freeze was imposed following studies by Malaysia’s central bank, Bank Negara, and has limited Pavilion REIT’s options to evaluate potential acquisitions, amid a challenging retail landscape.

Pavilion REIT currently has a portfolio of three shopping malls, and one office tower across the Malaysian capital of Kuala Lumpur.

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