Visit Note

• Our recent meeting reinforced our positive view on PavREIT. While short-term drivers are the opening of the Fashion Avenue in 3Q12 and the major lease renewal next year, long-term growth will come from the transformation of the whole Bukit Bintang area.
• The Fashion Avenue, covering 69k sqf, had its soft launch recently. About 90% of the tenants are expected to open by the 1st week of Sept. Rental for the precinct is about RM25 psf, double the rate that CK Tang previously paid.
• Acquisitions of pipeline assets – Fahrenheit 88 and Pavilion Mall extension are still on track. We believe the upcoming Bukit Bintang MRT station as well as the proposed underground linkage will further improve shopper flow in future. Ongoing  developments within the vicinity of Pavilion will provide a steady catchment of shoppers.
• Fair value is kept at RM1.60. Maintain Outperform.

Source: RHB Research - 22 August 2012