Pavilion KL refurbishment to impact FY26F growth Quick Note

Research evidence excerpt

Pavilion KL refurbishment to impact FY26F growth Quick Note

Global Markets Research

Pavilion REIT PREI.KL PREIT MK 23 July 2026

EQUITY: PROPERTY

RatingPavilion KL refurbishment to impact FY26F growth Remains Neutral

Target price MYR 2.10 RemainsQuick Note

Closing price MYR 1.75 22 July 2026Weak revenue growth in 2Q26 with distributable income/unit up only 4.0% y-y

Pavilion REIT reported 2Q26 results, with distributable income coming in at MYR92.7mn,

up 9.1% y-y but down 16.0% q-q, with 1H26 constituting 50%/51% of our/Bloomberg

consensus FY26F estimates. Gross revenue from its current portfolio of eight assets Research Analysts

totaled MYR221mn, up only 3.6% y-y, on higher contributions from Banyan Tree Kuala Malaysia Property

Lumpur and Pavilion Hotel Kuala Lumpur (which were acquired in June 2025), and Raghavendra Divekar, CFA - NSM

Pavilion Bukit Jalil (+4.9% y-y). Rental income from Pavilion Kuala Lumpur mall though raghavendra.divekar@nomura.com

declined 2.9% y-y due to the ongoing retail space reconfiguration at Level 3. Property +603 2027 6893

operating expenses fell by 5.7% y-y due to lower utility expenses being partly offset by Research Associates

higher maintenance costs related to the scheduled upgrades of the security systems along

Malaysia Propertywith roof and lightning improvements. As a result, net property income (NPI) rose by 9.6%

Amol Dongre - NSFSPLy-y (down 10.5% q-q) during the quarter. Trust expenses rose by 3.8% y-y, with

management fees increasing by 8.1% y-y but being balanced by flat borrowing costs y-y.

2Q26 distributable income was up 9.1% y-y and down 16.0% q-q, with annualized DPU

yield standing at 5.9% in 1H26. However, adjusting for the increase in units due to the