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

Master Lessee’s net revenue. (See “Certain Agreements Relating to LMIR Trust and the Properties—Description of the Master Lease Agreements—Lease Rental”.)Each of the Properties will be wholly-owned by LMIR Trust through special purpose companies (“SPCs”)(see “—Structure of LMIR Trust”).Key investment highlightsThe Manager believes that an investment in LMIR Trust offers the following attractions to Unitholders:LMIR Trust is the first Indonesian retail REIT offering in Singapore• LMIR Trust will be the first REIT in Singapore to provide exposure to Indonesia’s growing retail sector.• The Retail Malls are anchored by leading Indonesia retailers and well-complemented by internationaland domestic specialty tenants, providing shoppers and their families with a wide offering of products.• As at the Listing Date, the Retail Spaces will be leased to Matahari, Indonesia’s largest retailer by salesrevenue, for an initial term of 10 years with annual rental step-ups.• The Retail Malls and Retail Spaces are strategically located within large population catchmentssupported by neighbouring residential precincts, offices, schools and industrial estates.Exposure to the growing Indonesia retail sector, in particular the major cities of Jakarta,Bandung, Semarang and Medan• According to PT Jones Lang LaSalle (the “Independent Indonesian Retail Property Consultant”),real GDP growth in Indonesia has gathered pace, rising from 3.8% in 2001 to 5.5% in 2006 and isforecast to grow by 6.0% in 2007 and 6.1% in 2008. Average growth rate from 2007 to 2011 is forecast at5.7%.• Interest rates and inflation are expected to fall when measures taken by the Indonesian government toimprove the business environment and encourage investments begin to take effect.• On 26 April 2007, the Indonesian government enacted Law No. 25 of 2007 on Investment (the “NewInvestment Law”) which revokes the previous Foreign and Domestic Investment law. The NewInvestment Law provides and supports, among others, investment incentives and more openinvestments in Indonesia. These will include granting longer periods for property ownership andland use rights. The New Investment Law further simplifies the investment procedures and certainother arrangements which the Indonesian government believes will provide Indonesia with morecompetitive advantages that will act as incentives to attract increased levels of long-term foreigninvestment to Indonesia.• Economic growth in the past few years and the growth of the middle class have contributed to aconsistent growth in retail sales. The retail sector was the first sector to recover from the economic crisiswhich hit Indonesia in 1998, with retail trade increasing by over 60.0% in 1999. The rapid recovery wasdriven predominantly by strong domestic consumption, which also served as a primary driver ofIndonesia’s recovery and economic growth.• Nominal retail sales growth has averaged 11.0% per annum since 1999 with the growth rate forecast tocontinue from 2007 to 2011.• Apart from the favourable macroeconomic conditions, retail sales have also been boosted by a lifestyleshift towards a higher level of consumerism, in particular, among the urban middle income groupcentered in the major Indonesian cities such as Jakarta, Bandung, Semarang and Medan.(See “Appendix F—Independent Report on the Indonesian Retail Property Market”.)Strong acquisition growth potential supported by robust acquisition pipeline from the Sponsorand acquisitions from third parties• The Sponsor has granted LMIR Trust, for so long as:2(i)(ii)Lippo-Mapletree Indonesia Retail Trust Management Ltd. remains the manager of LMIR Trust; andthe Sponsor and/or any of its related corporations, alone or in aggregate, remains a controllingshareholder of the Manager;