This article first appeared in The Edge Malaysia Weekly on December 29, 2025 - January 4, 2026

CAPITALISING on a strong rally in its unit price, Pavilion Real Estate Investment Trust (KL:PAVREIT) executed a well-priced primary placement in June, raising RM360 million in new acquisition capital at only a minimal discount.

The deal entailed a primary placement of 257.1 million shares, representing 6.6% of the enlarged number of units in circulation, and was Pavilion REIT’s second-ever primary placement since its listing in 2011.

Priced at RM1.40, the transaction was at the top end of the marketed range of RM1.38 to RM1.40, and represented a discount of 4.8% and 3.9% to the last close and five-day volume-weighted average price (VWAP) on June 4, 2025, respectively.

The placement price also implied a 0.8% discount to the adjusted five-day VWAP, adjusted for the advance distribution. This marked the tightest discount to the adjusted five-day VWAP since 2016 for a primary placement transaction for Malaysian REITs.

The REIT’s unit price rallied further following the placement, closing at a 52-week high of RM1.63 on June 12, representing a 16.4% premium over the placement price. This was especially impressive given that the share placement was done amid challenging times arising from inflationary pressures, uncertainties wrought by the US tariffs, weakened investor sentiment and softer-than-usual consumer spending due to the impending expanded sales and service tax, which was implemented on July 1.

The strong pre-launch demand was sustained and successfully converted at launch. The transaction drew participation from domestic and foreign investors, including government-linked funds, long-only investors, multi-strategy funds and ultra-high-net-worth investors, with the top 10 investors receiving over 80% of the allocation.

Proceeds from the shares partly financed Pavilion REIT’s RM480 million acquisition of Banyan Tree Kuala Lumpur and Pavilion Hotel Kuala Lumpur in a related-party transaction. The balance of the purchase consideration will be funded via bank borrowings. As at Sept 30, 2025, the trust had total borrowings of RM3.9 billion, comprising RM400 million in short-term debt and RM3.5 billion in long-term debt.

The acquisition, announced last December, was deemed a related-party transaction as the sellers Lumayan Indah Sdn Bhd and Harmoni Perkasa Sdn Bhd are indirectly wholly-owned by tycoon Tan Sri Desmond Lim.

Lim is also the ultimate shareholder and chairman of Pavilion REIT’s manager, Pavilion REIT Management Sdn Bhd.

Apart from Pavilion Kuala Lumpur and the two new hospitality assets, the REIT’s portfolio comprises Pavilion Bukit Jalil, Intermark Mall, Da Men Mall, Elite Pavilion Mall and the Pavilion Tower office block, making up eight assets in total.

Khazanah Nasional Bhd closed the chapter on one of its most lucrative domestic investments ever with a clean exit from Farm Fresh Bhd (KL:FFB), through a sequence of club deals that ranked as Malaysia’s largest food and beverage (F&B) and consumer block trade of 2025.

The deal was executed via Khazanah’s wholly-owned vehicle Agrifood Resources Holdings Sdn Bhd (ARH), which placed out a total of 219.2 million existing shares — representing an 11.8% equity interest in Farm Fresh — in four transactions. CIMB Investment Bank acted as the sole bookrunner for the entire disposal programme.

The first tranche, comprising 42.5 million shares, was completed on June 5 for RM76.1 million. This was followed by a second block of 55 million shares worth RM96.3 million on July 25.

The momentum continued into September with the disposal of 65 million shares for RM130 million, leaving Khazanah with just over 3% of the home-grown dairy group that has become a household name.

The final block of 56.7 million shares was placed out on Oct 17 for RM135.5 million, marking Khazanah’s full exit.

In aggregate, the four placements raised RM437.9 million, effectively realising Khazanah’s decade-plus investment in Farm Fresh, the country’s largest integrated dairy producer.

Khazanah’s 14-year journey began with the purchase of a 30% stake in Farm Fresh, then known as The Holstein Milk Company Sdn Bhd, for between RM18 million and RM20 million.

Farm Fresh went public in 2022, in one of the year’s largest initial public offerings, raising about RM1 billion at an issue price of RM1.35 per share. The Main Market listing valued the Johor-based company at RM2.5 billion.

Since then, Khazanah’s initial 30% stake and founder Loi Tuan Ee’s controlling 70% interest have grown substantially in value.

The Edge reported in September that Khazanah was estimated to have made close to RM900 million from its 2011 bet on Farm Fresh — a return that few of its other direct investments can match.

Nevertheless, Farm Fresh’s share price tells the other half of the narrative. Year to date, the stock has surged 58% to a record level of RM2.90 at the time of writing.

It should be noted that the counter climbed by nearly 20% after Khazanah’s complete divestment on Oct 17, raising the inevitable question — could Khazanah have gained more by staying longer? Possibly.

However, the more immediate question now concerns strategic deployment. Khazanah walked away from Farm Fresh with fresh capital and a strong exit record, but replacing a consumer winner of this scale will not be easy. 

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