In a statement, the investment bank has maintained its “buy” call for the REIT despite lower-than-expected second-quarter 2024 (Q2 2024) earnings, giving the stock a lower target price (TP) of RM1.60.

“Nonetheless, the management remains positive for the remaining two quarters of the year due to higher tourist arrivals and higher rental income contribution from Pavilion Bukit Jalil.

“Other than improving Chinese tourist arrivals thanks to the extension of the visa-free travel, the management guided a higher number of tourists from the Middle East and the West as well,” it said.

Meanwhile, Maybank Investment Bank (Maybank IB) maintained its near-term earnings growth forecast for Pavilion REIT, which comes from both Pavilion KL, due to its prime location, and Pavilion Bukit Jalil.

It said the management had targeted an occupancy rate of 92% for Pavilion Bukit Jalil by end-2024, from the current 87.8%.

“About 54% of the tenancies are due for renewal in the fourth quarter of 2024, whereby approximately 70% of the existing tenants intend to renew,” it said.

Maybank IB has maintained a “buy” call for the stock with an unchanged TP of RM1.55.

As at 3.20pm, Pavilion REIT’s share price was unchanged at RM1.41, giving the group a market capitalisation of RM5.16 billion.