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

Profit forecast and profit projectionHaving assessed the likely market conditions and having taken into account the leases that have recentlybeen renewed, the demand for retail spaces, competing malls and market rent used in the market researchreports (see “Appendix F—Independent Report on the Indonesian Retail Property Market”), the Managerbelieves the estimated rental growth rates are reflective of the likely market rent that can be obtained forthe respective Retail Malls if the leases are renewed. The revised rent is then calculated as follows:“A” x [1+ (N x “Rental growth rate factor in the table above”)] = Revised rental rate“A” being the rent immediately prior to the expiry of the tenancy lease agreement; and“N” being the lease period (years) prior to the expiry of the existing lease.Based on the formula above, the average specialty rent per sq m for Forecast Period 2007, Projection Year2008 and Projection Year 2009 are as follows:Forecast Period Projection Year Projection Year200720082009(Rp. ’000 per sq m) (Rp. ’000 per sq m) (Rp. ’000 per sq m)Gajah Mada Plaza . . . . . . . . . . . . . . . . . . . . 156 187 247Cibubur Junction . . . . . . . . . . . . . . . . . . . . . . 216 224 236The Plaza Semanggi. . . . . . . . . . . . . . . . . . . 124 129 152Mal Lippo Cikarang . . . . . . . . . . . . . . . . . . . . 172 198 226Ekalokasari Plaza . . . . . . . . . . . . . . . . . . . . . 163 217 296Bandung Indah Plaza . . . . . . . . . . . . . . . . . . 281 291 311IstanaPlaza......................... 211 222 233Service chargesService charges paid by tenants are applied towards the operating expenses of the Properties whichcomprises (i) maintenance expenses (ii) utility expenses (iii) property tax (iv) insurance and (v) otherexpenses relating to the operation of LMIR Trust’s malls.For the Forecast Period 2007, Projection Year 2008 and 2009, service charges and the above mentionedoperating costs are accrued to the Operating Company pursuant to each Operating Costs Agreement tobe entered between the relevant Retail Mall Indonesian SPC and Lippo Strategic. The Operating CostsAgreement will lapse on 31 December 2009 and thereafter, all service charges and operating costs relatedto the maintenance and operation of the Retail Malls will accrue to LMIR Trust (see “Certain AgreementsRelating to LMIR Trust and the Properties—Description of the Operating Costs Agreements”).Retail SpacesEach of the Retail Spaces will be fully leased to Matahari under Master Lease Agreements for an initialterm of 10 years, with an option to renew for another 10 years (see “Certain Agreements relating to LMIRTrust and the Properties—Description of the Master Lease Agreements”). The Master Lessee will pay afixed rent for Forecast Period 2007. The fixed rent for the respective Retail Spaces for Forecast Period2007 is as follows:Retail SpacesFixed rent(S$’000)Mall WTC Matahari Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860Metropolis Town Square Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,173Depok Town Square Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 878Java Supermall Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852Malang Town Square Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851Plaza Madiun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,098Grand Palladium Medan Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903Total base rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,615The Master Lease Agreements contain provisions for increase in rental revenues through step-ups in thebase rent of 8.0% per annum for the first four years and thereafter, in accordance with a formula that takes103