Company Guide Pavilion REIT

Version 10 | Bloomberg: PREIT MK | Reuters: PREI.KL Refer to important disclosures at the end of this report

DBS Group Research . Equity 12 Feb 2019

HOLD Sustaining steady dividends Last Traded Price ( 11 Feb 2019): RM1.77 (KLCI : 1,688.56) Price Target 12-mth: RM1.70 (-4% downside) (Prev RM1.70) Maintain HOLD with TP of RM1.70. Pavilion REIT’s (PREIT) earnings will be supported by its prime asset - the Pavilion Kuala Analyst Lumpur – which has steady occupancy as well as positive rental Siti Ruzanna Mohd Faruk +603 2604 3965 reversions. Despite the upcoming expiry of 64% of the asset’s [email protected] net lettable area (NLA), we believe renewals will not be an issue given its prime location. A key re-rating catalyst for the stock What’s New would be a turnaround in Da Men’s contribution as well as  Pavilion KL to drive growth backed by steady occupancy acquisition of assets from its sponsor. We like the visibility of and positive rental reversions PREIT’s pipeline of asset acquisitions, such as Pavilion Bukit Jalil and Pavilion Damansara Heights. However, this may take 2-3  Re-rating to come from Da Men and acquisition of years to materialise. At its current share price, the stock offers assets 5.1% net yield – close to mean levels since early 2015. We lift  Stock offers 5.1% net yield – close to mean levels earnings by 1-2% to reflect better occupancy at Pavilion Elite and factored in weakness for Da Men. Our TP remains  Maintain HOLD with TP RM1.70 unchanged at RM1.70.

Where we differ: Our forecast is higher than consensus as we Price Relative have higher rental reversions forecast for Pavilion . We expect the mall to perform better following its tenant repositioning exercise.

Potential catalyst: Acquisition growth from Fahrenheit88. PREIT has the right of first refusal (ROFR) to acquire the 300k sq ft Fahrenheitt88 mall, currently owned by PREIT’s major

shareholder. We expect to see valuation at the RM600-700m Forecasts and Valuation FY Dec (RMm) 2018A 2019F 2020F 2021F range due to its prime location near .

Gross Revenue 555 620 639 657 Net Property Inc 375 400 416 428 Valuation: Total Return 289 272 287 297 Our DDM-derived TP is maintained at RM1.70. Our valuation Distribution Inc 267 281 297 307 factors in 7.5% cost of equity and 1.50% terminal growth. EPU (sen) 8.40 8.93 9.42 9.73

EPU Gth (%) 10 6 5 3 DPU (sen) 8.78 9.15 9.63 9.94 Key Risks to Our View: DPU Gth (%) 7 4 5 3 Rental reversions. Our imputed reversion expectation for NAV per shr (sen) 131 131 130 130 Pavilion Kuala Lumpur is conservative at 5% for the c.64% of PE (X) 21.1 19.8 18.8 18.2 leases expiring in FY19. Significantly lower rental reversions will Distribution Yield (%) 5.0 5.2 5.4 5.6 P/NAV (x) 1.4 1.4 1.4 1.4 be a key risk. Aggregate Leverage (%) 33.8 33.7 33.8 33.9 ROAE (%) 6.4 6.8 7.2 7.5 At A Glance Issued Capital (m shrs) 3,037 Mkt. Cap (RMm/US$m) 5,375 / 1,321 Distn. Inc Chng (%): 2 1 1 Major Shareholders (%) Qatar Holdings 36.1 Consensus DPU (sen): 8.90 9.30 9.50 Siew Choon Lim 28.2 Other Broker Recs: B: 2 S: 0 H: 9 Yong Tan Kewi 9.4 Source of all data on this page: Company, AllianceDBS, Bloomberg Free Float (%) 26.3 Finance L.P 3m Avg. Daily Val (US$m) 0.38 ICB Industry : Financials / Real Estate Investment Trust

ed: KK/ sa: WMT, CW, CS Company Guide

Pavilion REIT

WHAT’S NEW Valuable assets to drive growth

Not yet for Bukit Jalil: Pavilion REIT have announced that will continue to be the driver for the REIT with 75% they are not keen on acquiring the Pavilion Bukit Jalil as a contribution to revenue in FY18 and 75% in FY19F. developer. They are taking a more risk averse stand given the volatility in the market. However, they are still interested in Pavilion Elite a good match. Pavilion Elite raked in RM42.5m the asset upon completion. We are positive on this as joining revenue in FY18 with net property income of RM27.5m in as a developer could potentially dilute earnings. Under the which translates into net property margins of 64.5% vs Securities Commission’s real estate investment trusts (REITs) Pavilion KL’s net property margins of 71.1%. Do note that guidelines, REITs are allowed to enter a development project the Pavilion Elite acquisition was completed in April 2018. up to 15% of the REIT’s total asset value. PREIT’s total asset Pavilion Elite occupancy was at 96.7% in Dec 18. Pavilion value as of end Dec 18 is RM6.3bn. If they go in as a Elite focuses more on F&B with the bulk of its NLA from this developer, they can invest as much as RM950m vs RM1.4bn sector (49%). Expiry for this year is at 60% of its total NLA gross development value (GDV) of Pavilion Bukit Jalil. If this is but we believe renewals will not be an issue. In fact, it could fully funded by borrowings, impact to earnings could be potentially have some positive rental reversions. negative c.15% and gearing will go up to 44%. Intermark catering to the office crowd. Intermark has The mall is scheduled to open in 3QFY2020. As of now, the managed to have a stable occupancy at above 90% since Qatar Investment Authority (QIA) is set to buy a stake in the Dec 17 compared to the lows of 76.5% on Dec 16. retail mall. This is however subject to the completion of due Occupancy is expected to go up to 96% from 94% as it has diligence. To recap, the mall has a NLA of 1.8m sq ft. It secured a new tenant which is a Chinese restaurant. We comprises a one-block retail mall with five levels of retail believe its tenant mix is well suited to the office crowd space and two levels of basement parking. around the area with 36% of NLA for F&B and 15% of NLA for supermarket. Revenue was up 18% y-o-y and net Pavilion Bukit Damanasara. No offer has been made yet for property income increased 45% y-o-y. Pavilion Bukit Damansara. The project is currently under development with estimated completion by 2021. This Waiting for the crowd at Da Men. Given its position as a project is a joint venture project between the Pavilion Group suburban mall, Da Men has lacked the attractions to pull in and Canada Pension Plan Investment Board (CPPIB) (51:49). the crowd. Occupancy has also come down to 74% in Dec The retail portion will have a NLA of 1.17m sq ft which will 18 vs 87% in Dec 16. The management expects the office be split between a five and seven storey development crowd to help support the mall with the opening of building which will be seamlessly connected. The retail Prudential office nearby by mid-year. It will remain to be portion will also be connected to the mass rapid transit seen if footfall can improve. We have factored in flat rental (MRT) station. This asset could potentially be injected into reversions (51% of NLA up for renewal) as we deem positive the REIT upon completion. rental reversions could be challenging for the mall. It has already taken a cut in FY18 with revenue dropping by 25% Pavilion KL going strong. Pavilion KL (PKL) managed to do y-o-y. We have also reduced our occupancy forecast to 75% well in FY18 with revenue growing by 6.7% y-o-y backed by from 90% previously. steady occupancy and positive rental reversions. Much has been done to keep the footfall going in the mall, such as Gearing still manageable. Current net gearing for PREIT is at partnering up with tour agents to make Pavilion KL a 33.8% with a mixture between floating and fixed at 47:53. shopping destination. The tenants’ repositioning exercise is There will be some debt due this year, with the bulk of it in already completed. Although 64% of Pavilion KL’s total NLA 2021. We believe there should be no placements in the near is set to expire in 2HFY19, we are not worried on the future unless PREIT makes a sizeable acquisition. renewals given its solid position as a prime mall in the Bukit Bintang city centre. We have factored in 5% rental reversion Some changes to earnings. We lift our FY19-21f earnings for FY19-21F. Based on our analysis, every 1% difference in forecast by 1-2% to factor in lower occupancy and flat rental reversion would change earnings by 1.2%. In terms of rental reversions for Da Men. We have also keyed in higher tenant mix, Pavilion KL will still focus on fashion with 27% contribution from Elite given its higher occupancy and of total NLA, followed by 22% on food and beverage (F&B) rentals. All in all, our DDM is unchanged at RM1.70. This is and 20% of on department store/ supermarket. Pavilion KL based on 7.5% cost of equity with 1.5% terminal growth. We deem Pavilion REIT has solid assets in its portfolio and

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Pavilion REIT

has visibility in terms of asset injection from sponsor. A better than expected turnaround of the Da Men mall as well as injection of assets could re-rate the stock.

Pavilion KL - occupancy rates (%) Pavilion KL – tenant mix of total NLA 100% 99% 99% 99% 99% 98% 31% 27% 98% 97% 97% 96% 96% 20% 22% 96% 95% 95% 94% Fashion Department Store Food & Beverage Others FY2016 FY2017 FY2018

Intermark Mall - occupancy rates (%) Intermark Mall – tenant mix of total NLA

100% 94% 90% 90% 77% 80% 12% 70% 37% 15% 60% 50% 40% 36% 30% 20% 10%

0% Fashion Supermarket Food & Beverage Others FY2016 FY2017 FY2018 Da Men - occupancy rates (%) Da Men Mall – tenant mix of total NLA

88% 87% 86% 86% 84% 22% 82% 80% 45% 8% 78% 76% 74% 25% 74% 72% 70% 68% Fashion Supermarket Food & Beverage Others FY2016 FY2017 FY2018 Source: Company, AllianceDBS

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CRITICAL DATA POINTS TO WATCH Net property income and margins (%) Rental reversion pace to moderate. The positioning and good location of the PKL with NLA of 1.3m sq ft enables the asset to deliver rental reversions on expiring tenancies. However, we expect the rental reversion pace to moderate ahead, as the weaker consumer sentiment continues to hurt retail sales. There are already visible signs – average rent increased by a slower 7% in 2018 from 15% in 2013 because of a more challenging retail market. We expect reversion rates to continue to be pressured in FY19/20F at c.5%. PKL normally registers peak occupancy levels of above c.98% because of its much sought-after location. Occupancy should remain stable as retailers would want to maintain a presence in the Net property income and margins (%) key Bukit Bintang shopping district even if there is a temporary slowdown in spending. Leases representing 64% of NLA will be expiring in 2019.

Newly added assets to improve. PREIT completed two acquisitions in FY16 of the Da Men and Intermark malls. Net property Income (NPI) from both the Da Men and Intermark malls were fairly decent in FY18 at RM25.9m. Da Men has not been performing well as the suburb mall lacked footfall. Intermark on the other hand has been gaining traction from the office crowd nearby. In our forecasts, we assumed occupancy of 75%/95% in FY18/19F, as management works towards its target of near-full occupancy; and imputed a flat Distribution paid / net operating CF reversion rate expiring leases for these two assets due to the challenging retail environment. We estimate Da Men to generate NPI of RM8.9m and Intermark NPI of RM18.4m in FY19F.

Similar asset from Sponsor. PREIT completed its acquisition of Pavilion Elite in April from Urusharta Cemerlang (KL) Sdn Bhd, a property development firm controlled by PREIT’s major shareholder Tan Sri Desmond Lim Siew Choon. PREIT acquired the asset for RM580m funded via borrowings. The asset is a 10-storey, c.242k- sq-ft NLA retail development next to PKL. It shares the same design quality as the latter and is connected via an underground walkway. In our forecasts, we imputed NPI of c.RM36.6m for FY19 with NPI Interest cover (x) margins of 65%.

Minor office exposure. PREIT also owns the 165k-sq-ft NLA Pavilion Office Tower, which contributes c.2% to its top line and NPI. It is currently about 94% occupied and its major tenants include Malton Group, Mrail International, Clever Eagle, Crabtree & Evelyn and KL Metro.

Source: Company, AllianceDBS

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Appendix 1: Factors driving historical share price performance

Indexed at Jun 12 PREIT MK 10Y MGS FBMKLCI Acquisition 175 Share price performed as 10Y MGS yield dropped Announced SPA for Elite Pavilion Mall 150 Announced SPAs for Intermark Mall and da:men USJ

125

100

75 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18

Source: Company, AllianceDBS, Bloomberg Finance L.P. PREIT share price versus 10Y MGS Yields Remarks

RM % Interestingly, PREIT’s share price and the 2.00 4.80 10Y MGS yields have minimal correlation 1.90 over an extended period. However, we note 1.80 4.40 that the negative correlation is particularly 1.70 strong during periods of rising or declining 1.60 1.50 4.00 bond yields which may explain investors’ 1.40 preference for REITs as a defensive play. 1.30 3.60 1.20 1.10

1.00 3.20

Jul-12

Jul-17

Jan-15

Jun-15

Oct-13

Oct-18

Apr-16

Feb-12

Sep-16

Feb-17

Dec-12

Dec-17

Aug-14

Nov-15

Mar-14

May-13 May-18 PREIT MK (LHS) 10Y MGS (RHS) Source: Company, AllianceDBS, Bloomberg Finance L.P.

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Pavilion REIT

Balance Sheet: Aggregate leverage (%) Gearing up to pursue non-organic growth. PREIT’s gearing level has historically been below 18% vs 25-35% for other Malaysian REITs. However, this has risen to 34% with the fully debt- funded Da Men Mall, Intermark Mall and Pavilion Elite purchases.

Share Price Drivers: Acquisition newsflow. PREIT is gaining appeal among investors due to the proposed acquisitions in its pipeline. Confirmation of earnings enhancing acquisitions at attractive yields will be key re-rating catalysts for the stock. ROE (%) DPU growth, higher rental reversions. Currently, we forecast occupancy to average at 96% and rental reversion rate of 5%. An improvement in the occupancy level and rental reversion rate will lift DPU, which would translate into a higher unit price.

Key Risks: Rental reversion of current portfolio. Our imputed reversion expectation for Pavilion Kuala Lumpur is conservative at 5% for the c.64% of leases expiring in FY19. Significantly lower rental reversions will be a key risk. Distribution yield (%) Company Background Pavilion REIT is a retail-focused real estate investment trust, its primary asset being the Pavilion Kuala Lumpur mall – a shopping center with 1.3m-sq-ft net lettable area - nestled in the shopping district of Jalan Bukit Bintang, Kuala Lumpur.

PB band (x)

Source: Company, AllianceDBS

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Key Assumptions FY Dec 2017A 2018A 2019F 2020F 2021F

Portfolio lease expiry (% 14.5 10.1 53.7 21.4 13.6 NLA) Pavilion KL reversion (%) 3.10 6.77 5.00 5.00 5.00

Income Statement (RMm) FY Dec 2017A 2018A 2019F 2020F 2021F

Gross revenue 490 555 620 639 657 Property expenses (167) (180) (220) (223) (229) Net Property Income 323 375 400 416 428 Other Operating expenses (28.2) (32.8) (38.3) (38.5) (38.6) Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0 Net Interest (Exp)/Inc (62.6) (86.9) (89.8) (90.7) (91.6) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0

Net Income 232 255 272 287 297

Tax 0.0 0.0 0.0 0.0 0.0

Minority Interest 0.0 0.0 0.0 0.0 0.0 Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Income After Tax 232 255 272 287 297 Total Return 249 289 272 287 297 Non-tax deductible Items 17.3 11.5 9.43 9.46 9.49 Net Inc available for Dist. 249 267 281 297 307 Growth & Ratio Revenue Gth (%) 6.6 13.3 11.7 3.1 2.7 N Property Inc Gth (%) 2.6 16.1 6.7 4.1 2.7 Net Inc Gth (%) (1.3) 9.9 6.6 5.6 3.6 Dist. Payout Ratio (%) 100.1 100.0 99.0 99.0 99.0 Net Prop Inc Margins (%) 65.9 67.5 64.5 65.1 65.1 Net Income Margins (%) 47.4 46.0 43.9 44.9 45.3 Dist to revenue (%) 50.9 48.0 45.4 46.4 46.7 Managers & Trustee’s fees 5.8 5.9 6.2 6.0 5.9 ROto salesAE (%) %) 5.9 6.4 6.8 7.2 7.5 ROA (%) 4.1 4.2 4.3 4.5 4.7 ROCE (%) 5.4 5.9 5.9 6.1 6.3 Int. Cover (x) 4.7 3.9 4.0 4.2 4.2 Source: Company, AllianceDBS

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Pavilion REIT

Quarterly / Interim Income Statement (RMm) FY Dec 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018

Gross revenue 129 132 135 141 147 Property expenses (40.4) (42.5) (44.4) (47.2) (46.1) Net Property Income 89.1 89.0 90.6 94.2 101 Other Operating expenses (7.6) (7.3) (7.8) (7.8) (10.0) Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0 Net Interest (Exp)/Inc (16.2) (16.4) (22.1) (24.1) (24.4)

Exceptional Gain/(Loss) 17.3 0.0 0.0 0.0 33.6 Net Income 82.6 65.4 60.8 62.3 100 Tax 0.0 0.0 0.0 0.0 0.0

Minority Interest 0.0 0.0 0.0 0.0 0.0 Net Income after Tax 82.6 65.4 60.8 62.3 100 Total Return 82.6 65.4 60.8 62.3 100

Non-tax deductible Items (12.4) 4.40 1.16 2.91 (30.6) Net Inc available for Dist. 70.2 69.7 62.0 65.2 69.7 Growth & Ratio Revenue Gth (%) 7 2 3 5 4 N Property Inc Gth (%) 14 0 2 4 7 Net Inc Gth (%) 49 (21) (7) 2 61 Net Prop Inc Margin (%) 68.8 67.7 67.1 66.6 68.7 Dist. Payout Ratio (%) 99.9 0.0 100.0 0.0 100.0

Balance Sheet (RMm) FY Dec 2017A 2018A 2019F 2020F 2021F

Investment Properties 5,268 5,893 5,912 5,932 5,951 Other LT Assets 60.1 1.57 1.57 1.57 1.57 Cash & ST Invts 275 380 366 353 341 Inventory 1.55 2.08 2.08 2.08 2.08 Debtors 48.1 81.3 90.8 93.6 96.2 Other Current Assets 0.0 0.0 0.0 0.0 0.0 Total Assets 5,653 6,358 6,373 6,383 6,392

ST Debt 0.0 716 716 716 716 Creditor 177 185 207 213 219 Other Current Liab 0.0 0.0 0.0 0.0 0.0 LT Debt 1,463 1,432 1,432 1,442 1,452 Other LT Liabilities 73.1 47.0 47.0 47.0 47.0 Unit holders’ funds 3,940 3,978 3,971 3,965 3,958 Minority Interests 0.0 0.0 0.0 0.0 0.0 Total Funds & Liabilities 5,653 6,358 6,373 6,383 6,392

Non-Cash Wkg. Capital (127) (102) (114) (117) (121) Net Cash/(Debt) (1,187) (1,768) (1,782) (1,804) (1,827) Ratio Current Ratio (x) 1.8 0.5 0.5 0.5 0.5 Quick Ratio (x) 1.8 0.5 0.5 0.5 0.5 Aggregate Leverage (%) 25.9 33.8 33.7 33.8 33.9 Z-Score (X) 0.0 0.0 0.0 0.0 NA

Source: Company, AllianceDBS

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Cash Flow Statement (RMm) FY Dec 2017A 2018A 2019F 2020F 2021F

Pre-Tax Income 232 255 272 287 297 Dep. & Amort. 0.50 0.56 0.56 0.56 0.56 Tax Paid 0.0 0.0 0.0 0.0 0.0 Associates &JV Inc/(Loss) 0.0 0.0 0.0 0.0 0.0

Chg in Wkg.Cap. (22.0) (25.9) 12.1 3.62 3.27

Other Operating CF 84.2 46.6 89.8 90.7 91.6 Net Operating CF 295 276 374 382 393 Net Invt in Properties (22.5) (3.5) (20.0) (20.0) (20.0) Other Invts (net) 0.0 0.0 0.0 0.0 0.0 Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc. & JVs 0.0 0.0 0.0 0.0 0.0 Other Investing CF (51.7) (514) 11.3 10.9 10.5 Net Investing CF (74.3) (517) (8.7) (9.2) (9.5) Distribution Paid (243) (261) (278) (294) (304) Chg in Gross Debt 47.2 683 0.0 10.0 10.0 New units issued 0.0 0.0 0.0 0.0 0.0 Other Financing CF (67.6) (95.4) (101) (102) (102) Net Financing CF (264) 326 (379) (385) (396) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash (43.0) 85.4 (14.0) (12.3) (12.6)

Operating CFPS (sen) 10.5 9.95 11.9 12.4 12.7 Free CFPS (sen) 8.99 8.98 11.6 11.9 12.2 Source: Company, AllianceDBS

Target Price & Ratings History

Source: AllianceDBS Analyst: Siti Ruzanna Mohd Faruk

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AllianceDBS recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends

Completed Date: 11 Feb 2019 19:41:49 (MYT) Dissemination Date: 12 Feb 2019 08:13:20 (MYT)

Sources for all charts and tables are AllianceDBS unless otherwise specified.

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DBSVS and DBSV HK are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS Bank Ltd and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSV HK is regulated by the Hong Kong Securities and Futures Commission under the laws of Hong Kong, which differ from Australian laws.

Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

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For any query regarding the materials herein, please contact Carol Wu (Reg No. AH8283) at [email protected]

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

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Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

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Company Guide

Pavilion REIT

United This report is produced by AllianceDBS Research Sdn Bhd which is regulated by the Securities Commission Malaysia. Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608 - 610, 6th Floor, Gate International Precinct Building 5, PO Box 506538, DIFC, Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Financial Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA Centre rulebook) and no other person may act upon it.

United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States This report was prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

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Company Guide

Pavilion REIT

DBS Regional Research Offices

HONG KONG MALAYSIA SINGAPORE DBS (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Carol Wu Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 13th Floor One Island East, 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 18 Westlands Road, Capital Square, Marina Bay Financial Centre Tower 3 Quarry Bay, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 852 3668 4181 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 852 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] e-mail: [email protected] Company Regn. No. 196800306E

INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand

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