Does Your REIT Manager Add Value to You?

At the end of the day, you are likely to be a happy shareholder in a Retail REIT if the mall that you invest into has a competent management who is proactive in enhancing the value of the mall and always try to bring out the best in the mall.

Apart from quality tenants, we need visitors' footfalls or traffic. Higher volume of visitors' traffic might not necessarily translate into higher amount of spending. But at least it increases the probability that the visitors may somehow spend some money in the mall, some of this money will eventually go into your pocket.

A) Promotional Activities

Sometime in May & June 2016, Mid Valley in collaboration with HSBC brought in 3 ‘live’ angry birds to the mall and the event was a successful one and the crowds were having fun with the 3 birds.

Apart from event linked to a movie, the rejuvenated Sunway Putra Mall went extra mile to bring in artists such as Greyson Chance and G.E.M Tang to the mall in June and July 2016. Hopefully, these activities could enhance the visibility of these malls and more visitor footfalls to follow through subsequently.

B) Renovation to Increase Lettable Area

In 2015, Mid Valley underwent major renovation at 3^rd floor to add extra 40k Net Lettable Area (NLA) to the mall. New tenant such as Magnum Café moved in, good news to Magnum ice cream lovers. The newly refurbished GSC in Mid Valley would also make it the largest GSC in Malaysia with 2,800 seats and further enhance the appeal of the mall.

More NLA means more rental income to the REIT, more rental income means potentially higher amount of distribution or passive income to you!

Pavilion Mall also did some enhancement exercises in 2015 with the Dining Loft at level 7, Couture Pavilion and etc.  

C) Active Remixing of Tenants

For Gardens Mall, Borders book store next to Sushi Zanmai will be moved one floor lower and it will be re-opened on 9 September. This shifting is to make way for new tenants such as Korea’s BBQ restaurant, burger shop and Kids Jurassic by Dinoscovery! Perhaps this remixing could eventually increase the rental income to the mall.

Mid Valley and Gardens Mall have strong tenant’s waiting list of up to 200 and this definitely bodes well to the mall.

D) Acquiring New Mall

A Retail REIT could also grow by acquiring another mall to enhance its rental income. Not all acquisitions are good and each acquisition needs to be analysed. For Pavilion Mall, its extension namely Pavilion Elite (250k square feet) is likely to open its door in December 2016 and the injection of the new extension into Pavilion REIT might happen in the first half 2017. This is a deal that needs to be monitored.

Pavilion REIT has also acquired Da:Men USJ and Intermark Mall, the performance of these malls need to be monitored as well in order to assess its impact to Pavilion REIT in the long run.

Ultimately, a good management is likely to give you a peace of mind while you watch your investment and passive income grow!