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

Business and propertiesother strata title unit owners. LMIR Trust indirectly owns, via the relevant Retail Mall Indonesian SPC,approximately 99.0% of the units of strata titles that are constructed on the relevant plot of land on whichGajah Mada Plaza is situated on.(See “Overview of Relevant Laws and Regulations in Indonesia—Rights to Own and/or to Use—StrataTitles”.)Hak Guna Bangunan (“HGB”) titlesOne of the Retail Malls, namely, Mal Lippo Cikarang, is held via a HGB title. Under Indonesian land law, thehighest title which can be obtained by a company incorporated or located in Indonesia is a ‘Right to Build’or HGB title. HGB titles can only be obtained by an Indonesian citizen, or by a legal entity which isincorporated under Indonesian law and located in Indonesia including foreign investment companies(Penanaman Modal Asing, or “PMA”). A holder of HGB title has the right to erect, occupy and usebuildings on that particular parcel of land, and also has the right to encumber and sell all or part of theparcel.The validity period for a HGB title is different from that of a “freehold” title. A “freehold” title has no limitationon the validity period. A HGB title is granted for a maximum initial term of 30 years. By application to therelevant local land office upon the expiration of this initial term, a HGB title may be extended for anadditional term not exceeding 20 years. Following expiration of this additional term, a renewal applicationmay be made. The application should be made no later than two years prior to the expiration of theadditional term. The land office has discretion to grant the various extensions.(See “Overview of Relevant Laws and Regulations in Indonesia—Rights to Own and/or to Use”.)Hak Pakai (“HP”) titlesTwo of the Retail Malls, namely The Plaza Semanggi and Ekalokasari Plaza, are situated on plots of landwhich are owned by the land owner under HP (Right to Use) titles. LMIR Trust does not own these plots ofland directly and instead, holds the two Retail Malls via BOT schemes. The land owner (as the BOTGrantor) has granted the relevant Retail Mall Indonesian SPC (as BOT Grantee), a right to build andoperate the relevant Retail Mall for a particular period of time as stipulated in the BOT Agreement. The HPtitles where Plaza Semanggi and Ekalokasari Plaza are constructed will be valid as long as the lands arebeing used by the respective land owner.A HP title allows its holder (i.e. the land owner) the right to use and/or collect the products of land directlyadministered by the State or of land owned by other persons. Hak Pakai over land can be granted by theIndonesian government in the form of a decree or by an Indonesian citizen in the form of an agreement.The decree or the agreement gives the user the rights and obligations laid down in that decree oragreement.A HP title in Indonesia may be obtained and owned by the following entities: (a) an Indonesian citizen, (b) alegal entity established under Indonesian law and domiciled in Indonesia, (c) any Indonesian governmentdepartment or government agency, (d) any social or religious entity, (e) a foreign citizen residing inIndonesia and who has provided benefit to Indonesia, (f) a foreign legal entity that has a registeredrepresentative office in Indonesia, and (g) a state representative or a representative of certaininternational bodies.(See “Overview of Relevant Laws and Regulations in Indonesia—Rights to Own and/or to Use”.)Hak Pengelolaan (“HPL”) titlesIn the case of Bandung Indah Plaza, the BOT Grantor owns the land on which the Retail Mall is situatedunder a HPL (Right to Manage) title. A HPL title provides its holder (i.e. the land owner) with the right tomanage on a parcel of land created by the state, in which the executing authorities of such right to manageis partially granted and in common practice (only) to Indonesian government entities. Such holder of aRight to Manage title may use the granted executing authority for the purpose of land utilisation andallocation planning, utilisation of the land related to the role of such Indonesian government entities, partialassignment of the land to third parties and/or land management in cooperation with third parties. Bandung129