KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB Research) has cut Pavilion Real Estate Investment Trust's (REIT) forecast by 5.3 per cent, after it factored in a lower revenue contribution from Pavilion KL.
Pavilion REIT's third quarter 2024 (3Q24) net profit of RM78.9 million came below the investment bank's consensus expectations.
Year to date, its revenue increased by 21.6 per cent due to income from the newly acquired Pavilion Bukit Jalil and higher rental income from Pavilion KL.
"Pavilion REIT recorded a slight disappointment in its 3Q results, largely due to a lower-than-expected contribution from Pavilion KL Mall.
"Nonetheless, we expect the group to do well in the subsequent quarter, supported by an anticipated increase in footfall during the holiday season, benefiting prime assets like Pavilion KL and Elite Pavilion Mall," it said.
HLIB Research said stronger retail spending with year-end promotions and continued recovery in tourist arrivals could factor in Pavilion REIT's performance in the coming quarters.
The bank has kept its 'Buy' call on the REIT, with a target price of RM1.69.