LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Profit forecast and profit projectionNew leasesIn order to forecast and project base rental income for new leases, the Manager has applied the marketrent taking into account market conditions, tenant demand levels, the expected occupancy rate,comparable leases for tenancies that have been recently negotiated as well as referred to the marketresearch report of the Retail Malls.In addition, Lippo Strategic has entered into a Rental Guarantee Deed with the relevant Retail MallSingapore SPCs pursuant to which Lippo Strategic will (i) provide a rental guarantee to the relevant RetailMall Singapore SPC in respect of existing and new units in the respective Retail Malls which areuntenanted and (ii) undertake to pay to the relevant Retail Mall Singapore SPC any shortfall in themaintenance and operation costs which the relevant Operating Company has undertaken to bear underthe respective Operating Costs Agreement. The Rental Guarantee Deed covers the period commencingfrom the Listing Date up to 31 December 2009. Pursuant to the Rental Guarantee Deeds, Lippo Strategicis obliged to pay to the Retail Mall Singapore SPCs a specified sum in respect of each Retail Mall for everyyear during the said period. The first of such payments will be paid on or before 31 January 2008, andsubsequent payments will be made on a quarterly basis thereafter. In the event any of the specified units inthe relevant Retail Mall becomes tenanted during such period, the amount of the specified sum payable byLippo Strategic in respect of such Retail Mall will be reduced by the amount of the rental payable under therelevant tenancy, regardless of whether such rental is received by the owner of the relevant Retail Mall andnotwithstanding that such tenancy may be or is terminated prior to the expiry of such period.(See “Certain Agreements Relating to LMIR Trust and the Properties—Description of the RentalGuarantee Deeds”.)Occupancy ratesBased on the assumptions and basis as discussed above, the assumptions on rental rates below andmanagement strategy (see “Strategy”), the forecast and projected occupancy rates as at 31 December2007, 2008 and 2009 as compared against the actual occupancy rates as at 30 June 2007 for the RetailMalls are set out below:Occupancy rate Occupancy rate as Occupancy rate as Occupancy rate asas at 30 June 2007 at 31 December 2007 at 31 December 2008 at 31 December 2009(%) (%) (%) (%)Gajah Mada Plaza . . . . 89.1 94.7 95.9 99.3Cibubur Junction. . . . . . 86.4 93.5 98.6 99.6The Plaza Semanggi . . 96.4 97.0 97.8 98.5Mal Lippo Cikarang. . . . 96.3 96.8 98.5 98.4Ekalokasari Plaza . . . . . 87.3 78.5 91.4 99.6Bandung Indah Plaza . . 83.2 87.2 91.9 99.5Istana Plaza . . . . . . . . . 98.9 99.1 99.4 99.2Weighted Average ... 91.6 93.2 96.5 99.1Renewal rental ratesWhen leases in the Retail Malls are renewed in Forecast Period 2007, Projection Year 2008 and ProjectionYear 2009, the Manager has assumed these leases will be renewed based on the actual rent contractedimmediately prior to the previous leases’ expiry increased by the rental growth rates below:Rental growth rate Rental growth rate Rental growth rateForecast Period 2007 Projection Year 2008 Projection Year 2009(%) (%) (%)Gajah Mada Plaza . . . . . . . . . . . . . . . . . 12 12 12Cibubur Junction. . . . . . . . . . . . . . . . . . . 12 12 12The Plaza Semanggi . . . . . . . . . . . . . . . 10 10 10Mal Lippo Cikarang. . . . . . . . . . . . . . . . . 12 12 12Ekalokasari Plaza . . . . . . . . . . . . . . . . . . 15 15 15Bandung Indah Plaza . . . . . . . . . . . . . . . 12 12 12IstanaPlaza...................... 15 15 15102