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

Business and propertiesOVERVIEWLMIR Trust is a Singapore-based REIT constituted by the Trust Deed. It is established with the principalinvestment objective of owning and investing on a long-term basis in a diversified portfolio of incomeproducingreal estate in Indonesia that are primarily used for retail and/or retail-related purposes, and realestate related assets in connection with the foregoing purposes.LMIR Trust seeks to produce regular and stable distributions to Unitholders and to achieve long-termgrowth in NAV per Unit through growth in rental yields and acquisitions which are in the interests ofUnitholders. LMIR Trust’s initial asset portfolio, as at the Listing Date, comprises the seven Retail Mallsand seven Retail Spaces, all of which are located in Indonesia.The Properties will be the initial assets which LMIR Trust will invest in and own. Subsequently, the Manageraims to produce attractive total returns for Unitholders by, among other things:• selective acquisition of properties that meet the Manager’s investment criteria;• active asset enhancement and management of LMIR Trust’s property portfolio to maximise returns; and• employment of optimum capital structure and risk management.Competitive strengthsThe Manager believes that the competitive strengths of the Properties include:• The Properties are located in major cities of Indonesia amidst a growing and affluent urbanmiddle class.The Properties are mainly located within Greater Jakarta and Bandung, Indonesia’s fourth mostpopulous city.Jakarta, Indonesia’s capital and largest city, has seen its total household expenditure increase by anaverage of 12.8% per annum from 2001 to 2006, rising from Rp. 19,277 billion in 2001 toRp. 35,273 billion in 2006. Bandung has seen a similar growth in its total household expenditure,rising from Rp. 4,825 billion in 2001 to Rp. 8,317 billion in 2006, an average growth of 11.5% per annumfrom 2001 to 2006.Economic development in Indonesia has seen a significant growth of the middle class over the past fiveyears. This middle income group is considered one of the vital contributors to the economy and isperceived as the most prospective target in mass consumer markets. Based on the Social EconomicSurvey (SES) by ACNielsen 1 conducted in nine major cities in Indonesia, the share of population of themiddle income group (classified as SES A, B & C) has steadily grown from 50.0% in 2001 to 64.0% in2006. It is estimated that the urban middle income population in Indonesia totals approximately66 million people. This particular group is likely to be considered a major target market for modernretail shopping centres.Retail spending in these cities has been further boosted by a shift in lifestyle towards a higher level ofconsumerism, partially brought about by the introduction of foreign brands and designer labels. Theseforeign brands and designer labels typically have higher margins and are willing to pay higher rentals forprime and sizeable retail space. The proliferation of hypermarkets and supermarkets over traditionalmarkets has also increased shopper traffic to modern retail malls.1 Source: ACNielsen Social Economic Survey. ACNielsen has not provided its consent, for the purposesof section 249 (read with section 302) of the SFA, to the inclusion of the information extracted from therelevant report issued by it, and is thereby not liable for such information under sections 253 and 254(read with section 302) of the SFA. While the Manager has taken reasonable action to ensure that theinformation has been reproduced in its proper form and context, and that it has been extractedaccurately and fairly, neither the Manager nor any other party has conducted an independentreview of, nor verified the accuracy of, such information.118