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Malaysia’s Pavilion REIT Seeks Mall Acquisitions Around Asia

Philip Ho, Chief Executive Officer, Pavilion Real Estate Investment Trust. Photographer: Goh Seng Chong/Bloomberg
Philip Ho, Chief Executive Officer, Pavilion Real Estate Investment Trust. Photographer: Goh Seng Chong/Bloomberg

Nov. 14 (Bloomberg) -- Pavilion Real Estate Investment Trust, a Malaysian shopping mall trust part-owned by the Qatar Investment Authority, is seeking acquisitions within the country and throughout Asia to expand.

The Kuala Lumpur-based property trust, which is expected to list next month, owns the Pavilion mall and an adjacent office tower in the capital’s Bukit Bintang area, which Malaysia is developing to rival Singapore’s Orchard Road.

“We are seeking for potential investments,” said Philip Ho, chief executive officer of the manager of Pavilion REIT. “We want to manage niche-market malls. We develop and we know how to bring the tenants in.”

Pavilion REIT is expanding as it seeks to raise 700 million ringgit ($222 million) in an initial public offering in Malaysia this month. It started marketing shares to fund managers at 88 sen to 90 sen each, according to a note to investors last week.

The trust, whose mall houses retailers including Bulgari and Prada, wants to add more properties to tap on a region that’s set to outpace global growth. More than half of the 17 Asian economies tracked by Bloomberg, including Malaysia, posted growth of at least 4 percent.

The Pavilion mall is “very well located and there’s room for rental to grow,” said Ang Kok Heng, who oversees $292 million as chief investment officer at Phillip Capital Management Sdn. “They have to invest selectively because they are in the high-end segment.”

The initial offering will be the Southeast Asian nation’s fourth biggest this year after share sales by Bumi Armada Bhd., UOA Development Bhd. and MSM Malaysia Bhd.

AIA Bhd., Great Eastern Life Assurance Bhd. and Malaysia’s Employees Provident Fund are key investors in the trust, which has distribution yield forecast of as much as 6.73 percent based the fiscal 2012 earnings estimate, the note said.

Qatar Investment Authority would be the single largest owner of Pavilion REIT with a 36 percent stake, according to its draft prospectus. The trust aims to start trading in Kuala Lumpur on Dec. 7.

To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net

To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net

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