PAVILION REIT UNITHOLDERS APPROVE RM480 MLN HOSPITALITY ACQUISITION

KUALA LUMPUR, May 7 (Bernama) -- Pavilion Real Estate Investment Trust (Pavilion REIT) has received unitholder approval to acquire two landmark hospitality assets, Banyan Tree Kuala Lumpur (BTKL) and Pavilion Hotel Kuala Lumpur (PHKL), in a RM480 million yield accretive transaction that strengthens the REIT’s long-term performance and reinforces its presence within Bukit Bintang.

The resolutions, passed earlier today at a unitholders meeting, enable MTrustee Bhd, acting on behalf of Pavilion REIT, to proceed with the acquisitions from Lumayan Indah Sdn Bhd and Harmoni Perkasa Sdn Bhd.

Pavilion REIT Management Sdn Bhd chief executive officer Datuk Philip Ho said these hotels are highly synergistic with Pavilion Kuala Lumpur Mall and Elite Pavilion Mall, allowing for an elevated visitor and hotel guest experience.

“Pavilion REIT remains focused on owning and managing high-performing retail-led assets, especially super-regional and integrated developments, and this acquisition presents a value-aligned opportunity within the REIT’s existing footprint in Bukit Bintang, contributing to the overall vibrancy of the area while enhancing the REIT’s income resilience and growth prospects,” he said in a statement, today.

The two properties are 5-star hotels operated and managed by Banyan Tree Hotels & Resorts Pte Ltd and have consistently achieved average occupancy rates of 82.1 per cent (BTKL) and 81.5 per cent (PHKL) for the financial year ended Dec 31, 2024.

BTKL, housed within a 59-storey integrated building, offers 55 well-appointed rooms, the award-winning Banyan Tree Spa and a rooftop bar.

PHKL, which sits atop Pavilion Kuala Lumpur Mall, comprises 325 well-appointed rooms with comprehensive meeting and event facilities.

Pavilion REIT said the acquisitions would be funded through a combination of debt and or equity, including the issuance of up to 172.4 million new units to the vendors and or their nominees and a private placement of up to 386.0 million new units to raise between RM264 million and RM552 million.

It said that under the transaction structure, the hotels will be leased to Harmoni Perkasa Sdn Bhd for an initial 10-year term with renewal options of up to 20 years.

“The lease guarantees a fixed annual rental of RM33.5 million for the first five years, reflecting a gross yield of approximately 7.0 per cent. Rental escalations and variable components linked to the hotels’ performance offer further upside potential.

“Post-acquisition, the hotels will comprise approximately 5.5 per cent of Pavilion REIT’s enlarged total asset under management, while Pavilion Kuala Lumpur Mall’s share of the portfolio will decrease from 61.8 per cent to 58.5 per cent,” Pavilion REIT added.

-- BERNAMA