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

SummaryThe following summary is qualified in its entirety by, and is subject to, the more detailed informationcontained or referred to elsewhere in this Prospectus. Investing in the Units involves risks. Investorsshould read this Prospectus in its entirety and, in particular, the sections from which the information in thissummary is extracted and “Risk Factors”. The meanings of terms not defined in this summary can be foundin the “Glossary” or in the Trust Deed (as defined herein). A copy of the Trust Deed can be inspected at theregistered office of the Manager, which is located at 78 Shenton Way, #05-01 Lippo Centre,Singapore 079120.Statements contained in this summary that are not historical facts may be forward-looking statements.Such statements are based on certain assumptions and are subject to certain risks, uncertainties andassumptions which could cause actual results to differ materially from those forecast or projected (see“Forward-Looking Statements”). Under no circumstances should the inclusion of such information hereinbe regarded as a representation, warranty or prediction with respect to the accuracy of the underlyingassumptions by the Manager, the Trustee, the Underwriters, the Sponsor, the Property Manager or anyother person or that these results would be achieved or are likely to be achieved.OVERVIEW OF LMIR TRUST—THE FIRST INDONESIAN RETAIL REIT OFFERING IN SINGAPORELMIR Trust is a Singapore-based real estate investment trust (“REIT”) constituted by a trust deed dated8 August 2007 (as amended by a first supplemental deed dated 18 October 2007) entered into between theTrustee and the Manager (the “Trust Deed”). It is established with the principal investment objective ofowning and investing on a long-term basis in a diversified portfolio of income-producing real estate inIndonesia that are primarily used for retail and/or retail-related purposes, and real estate related assets inconnection with the foregoing purposes.Indonesia’s real GDP growth has gathered pace, rising from 3.8% in 2001 to 5.5% in 2006 and is forecastto grow by 6.0% in 2007 and 6.1% in 2008. Interest rates and inflation are expected to fall when measurestaken by the Indonesian government to improve the business environment and encourage investmentsbegin to take effect. Spurred by the economic development in Indonesia, the share of population within themiddle income group has grown steadily from 50.0% in 2001 to 64.0% in 2006. It is estimated that theurban middle income population in Indonesia totals approximately 66 million people. (See “Appendix F—Independent Report on the Indonesian Retail Property Market”.)As at Listing Date, LMIR Trust’s property portfolio will comprise seven retail mall properties (the “RetailMalls”) and seven retail spaces located within other retail malls (the “Retail Spaces”, and collectively withthe Retail Malls, the “Properties”), all of which are located in Indonesia. (See “—Information on theProperties”.) It is intended that LMIR Trust’s investments will be made on a long-term basis. The Propertiesare strategically located in major cities of Indonesia with large population catchment areas and areaccessible via major transportation routes and highways. Three of the Retail Malls are located in Jakarta,two in Greater Jakarta (an area encapsulated by Jakarta, Bogor, Depok, Tangerang and Bekasi) and theremaining two in Bandung, the fourth largest populated city in Indonesia. The Retail Malls are popular intheir respective population catchment areas. The Retail Malls are supported by their diverse trade mix andstrategic locations, and provide shoppers with comprehensive one-stop shopping, dining andentertainment destinations. As at 30 June 2007, the Retail Malls had an aggregate Net Lettable Area(“NLA”) of 219,382 sq m, and a weighted average occupancy rate of 91.6% based on Committed Leases.The tenant profile of the Retail Malls includes leading domestic retailers such as Matahari and RimoDepartment Stores, Hero Supermarket and Foodmart supermarket (formerly known as MatahariSupermarket) and Hypermart, which are well-complemented by international specialty tenants such asFitness First, Starbucks, McDonald’s, Kentucky Fried Chicken and Pizza Hut as well as other domestictenants.The Retail Spaces, which have a total NLA of approximately 94,070 sq m as at 30 June 2007, arepredominantly utilised as department stores, supermarkets, hypermarkets and/or amusement centresand are housed within other retail malls. Three of the Retail Spaces are located in Greater Jakarta and theremaining four in the cities of Semarang, Madiun, Malang and Medan. As at Listing Date, each of the RetailSpaces will be leased to PT. Matahari Putra Prima Tbk (“Matahari”orthe“Master Lessee”) under masterlease agreements (the “Master Lease Agreements”), for an initial term of 10 years, with an option grantedto Matahari to renew for another 10 years. The Master Lease Agreements contain provisions for increasein rental revenues through step-ups in the base rent of 8.0% per annum commencing from 1 January 2008and ending on 31 December 2011 and thereafter, a fixed percentage of 4.25% over the increase in the1