PAVILION REIT TO BENEFIT FROM HIGHER TOURIST ARRIVALS IN 2024 - HLIB

KUALA LUMPUR, July 18 (Bernama) -- Hong Leong Investment Bank (HLIB) expects Pavilion REIT to continue to benefit from higher tourist arrivals to Malaysia amid the positive outlook for the remainder of the year.

In a note today, the investment bank has maintained its “Buy” call for the REIT despite lower-than-expected second-quarter 2024 (2Q 2024) earnings, giving the stock a lower target price (TP) of RM1.60.

"Nonetheless, the management remains positive for the remaining two quarters of the year due to higher tourist arrivals and higher rental income contribution from Pavilion Bukit Jalil.

"Other than improving Chinese tourist arrivals thanks to the extension of the visa free travel, the management guided a higher number of tourists from the Middle East and the West as well," it said.

Meanwhile Maybank Investment Bank (Maybank IB) maintained its near-term earnings growth forecast for Pavilion REIT, which comes from both Pavilion KL, due to its prime location, and Pavilion Bukit Jalil.

It said the management has targeted an occupancy rate of 92 per cent for Pavilion Bukit Jalil by end-2024 (from the current 87.8 per cent).

"About 54 per cent of the tenancies are due for renewal in the fourth quarter of 2024, whereby approximately 70 per cent of the existing tenants intend to renew," it said.

Maybank IB has maintained a “Buy” call for the stock with an unchanged TP of RM1.55.

At 11.15 am, Pavilion REIT share price was flat at RM1.41 with 2.80 million shares traded. 

-- BERNAMA