Pavilion REIT posts flat net property income of RM145.58m in 3QFY2026
Pavilion Real Estate Investment Trust reported net property income of RM145.58 million for the third quarter ended Sept 30, 2026, virtually unchanged from RM145.49 million a year earlier. Lower operating expenses offset a marginal revenue decline, while Pavilion Bukit Jalil posted a 4.1% increase in
PETALING JAYA (Oct 23): Pavilion Real Estate Investment Trust (Pavilion REIT) maintained steady net property income for the third quarter ended Sept 30, 2026 (3QFY2026), as lower operating expenses offset a marginal revenue decline. The retail, hotel and office property owner reported net property income of RM145.58 million, compared with RM145.49 million a year earlier, according to its Bursa filing on Thursday (Oct 22).
Property operating expenses fell 0.8% to RM81.71 million from RM82.39 million, mainly due to lower advertising-related setup costs. The trust said the savings were partly offset by higher utility expenses following an increase in Tenaga Nasional Bhd’s Automatic Fuel Adjustment rate.
Pavilion Bukit Jalil’s quarterly net property income rose 4.1% to RM33.90 million from RM32.57 million, while the combined contribution from Banyan Tree Kuala Lumpur and Pavilion Hotel Kuala Lumpur increased to RM8.09 million from RM8 million. However, net property income from Pavilion Kuala Lumpur Mall eased to RM87.56 million from RM88.08 million, while Elite Pavilion Mall’s contribution declined to RM11.80 million from RM13.19 million.
Gross revenue edged down 0.3% to RM227.29 million from RM227.88 million, mainly due to lower advertising income at Elite Pavilion Mall. Net income fell 1.8% to RM92.91 million from RM94.58 million, while earnings per unit eased to 2.37 sen from 2.41 sen. Borrowing costs rose 5.2% to RM44.04 million from RM41.86 million, attributed to additional borrowings drawn down to finance the acquisition of the two hotels last year.
Distributable income declined 1.4% to RM96.47 million from RM97.86 million. Distribution per unit stood at 2.45 sen for the quarter, compared with 2.49 sen a year earlier. The third-quarter distribution will be paid together with the fourth-quarter distribution. Pavilion REIT distributes income half-yearly and proposes to distribute 100% of its distributable income for FY2026.
For the first nine months, net property income increased 6.9% to RM446.79 million from RM418.07 million, supported by higher revenue and lower electricity expenses. Gross revenue grew 3.7% to RM694.21 million from RM669.40 million, mainly on rental contributions from the two hotels, acquired on June 20, 2025, alongside Pavilion Bukit Jalil, where the trust cited sustained occupancy levels. Nine-month net income rose 9.1% to RM287.75 million from RM263.67 million, while distributable income increased 6.6% to RM299.47 million from RM280.94 million. Distribution per unit for the period stood at 7.62 sen, against 7.46 sen previously.
Pavilion REIT incurred approximately RM24.6 million in capital expenditure during the nine months, mainly to reconfigure part of Level 3 at Pavilion Kuala Lumpur Mall. Its gearing stood at 40.4% as at Sept 30, with an average interest cost of 4.3%. On its outlook, the manager expects the consumer sector to remain resilient in the final quarter, supported by stable labour-market conditions, government assistance to households and seasonal spending. However, it cautioned that consumption growth was likely to become more measured and selective as higher labour, food and logistics costs put pressure on household budgets and corporate margins.
