KUALA LUMPUR: Affin Hwang Capital Research has upgraded Pavilion REIT to Buy from Hold, with a higher target price of RM1.84 following the release of its strong results for the first six months of FY18 and positive business updates.
Pavillion REIT 6M’18 realised net profit grew by 13% on higher occupancy, positive rental revisions and maiden contribution from Elite Pavilion Mall.
The research house said on Friday that the management has also turned positive on its business outlook due to stronger consumer sentiment.
In view of the popularity of Pavilion KL and limited competition in the premium mall segment, the research house expects Pavilion KL to achieve annual rental revisions between 3% and 5%, supporting 2019-2020 earnings growth.
At 5.9% 2019 distribution yield, it said valuations were attractive.
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