KL Pavilion endures slowdown
In this article (5)
Kuala Lumpur’s showcase Pavilion mall says it has weathered the sluggish retail market, posting increased earnings this quarter.
Gross revenue for the first quarter of the current calendar and financial year was RM105.1 million (US$29.6 million) which translated into a net profit of RM60.5 million ($17 million).
Revenue rose by four per cent year-on-year after renovations were completed last year, and due to an increase in service charges.
The mall’s occupancy rates were stable and this year just 15 per cent of tenants leases are scheduled to expire. Pavilion mall management expects only a slight relocation and revision of the current tenant mix.
Renovations are planned of restrooms, parts of level one in the foodcourt area and enhancements of the air conditioning system to reduce power consumption and air flow.
Pavilion management reports tenants sales were stable through the quarter, but warned April sales are down due to the introduction of GST on April 1.
In a research note, Hong Leong IB said it expected the slowdown will only be temporary.
“Consumers will adjust their spending habits after a while.”
Questions & Answers
Q.How did Pavilion mall manage to increase its revenue despite a sluggish retail market?
How did Pavilion mall manage to increase its revenue despite a sluggish retail market?
The mall’s revenue rose by four per cent year-on-year. This increase is attributed to the completion of renovations last year and an uplift in service charges during the period. Occupancy rates remained stable.
Q.What impact is the introduction of GST having on tenant sales at Pavilion mall?
What impact is the introduction of GST having on tenant sales at Pavilion mall?
Tenant sales were stable through the first quarter, but management has reported a decline in sales for April. This slowdown is specifically linked to the recent introduction of the new Goods and Services Tax.
Q.What improvements are planned for the Pavilion mall in the near future?
What improvements are planned for the Pavilion mall in the near future?
Renovations are scheduled for the mall's restrooms and specific sections of the food court on level one. Enhancements to the air conditioning system are also planned to improve air flow and reduce power consumption.
Q.What proportion of tenant leases are due to expire at Pavilion mall this year?
What proportion of tenant leases are due to expire at Pavilion mall this year?
Just 15 per cent of the tenants' leases are scheduled to expire during the current year. Management anticipates only a minor relocation of tenants and a slight revision of the current tenant mix as a result.
Reader pulse
Is Pavilion's growth sustainable post-GST?
18,564 votes so far