One - Lippo Malls Indonesia Retail Trust - Investor Relations

24Lippo-Mapletree Indonesia Retail Trust Annual Report 2009CEO’s ReportOPERATIONS REVIEWPORTFOLIO LEASE EXPIRY PROFILELMIR Trust’s portfolio has an average lease term forspecialty tenants of between three to fi ve years while theaverage lease term for anchor tenants is 10 years. Over35% of the tenants have their leases expiring in Year 2015& beyond. The weighted average lease term to expiry forthe portfolio by gross rental income and NLA is 4.9 yearsand 5.8 years respectively.In August 2009, one of the anchor tenants in Gaja MadahPlaza (“GMP”) and Istana Plaza (“IP”) – PT Rimo CaturLestari Tbk terminated its leases after encounteringfi nancial problems. The Property Manager consideredavailable options and recommended Matahari DepartmentStore (“MDS”) as a replacement tenant for both spaces.The Audit Committee (“AC”) approved this transactionon terms which were negotiated at arm’s length and atmarket rental rates.The two new leases undertaken by MDS at GMP and IPwere for 11 years and they occupy a total net lettable areaof 9,030 sqm at both malls, the average lease expiry forthe malls is therefore increased accordingly. Operationsfor these two outlets commenced in December 2009and shopper traffi c was observed to improve signifi cantlythroughout both malls.The standard industry practice in the Indonesian RetailMarket is for a large proportion of rent to be paid upfront.LMIR Trust’s tenants generally pay 10% to 20% of totalrent payable for their entire lease term in advance oncethey have executed the lease contracts. Such collectionsenable the Trust to mitigate potential risks arising fromarrears and maintain a healthy cashfl ow.LMIR Trust’s Lease Expiry Profile (as % of Malls’ NLA)%201817%18%161413%12109% 9%10%11%864202010 2011 2012 2013 2014 2015 2016 andbeyond