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

• The management of all the Retail Malls will be undertaken by the Property Manager, a wholly-ownedsubsidiary of the Sponsor. The Property Manager will adopt international best practices for all the RetailMalls in order to realise branding, leasing, marketing and operating efficiencies. Being the sole propertymanager of all of the Retail Malls, the Property Manager will enjoy economies of scale and synergisticbenefits, including increased buying power, a stronger corporate image, improved retailer relationships,and a transfer of knowledge to create additional value.The sponsor of LMIR Trust is PT. Lippo Karawaci Tbk, Indonesia’s largest listed propertycompany by market capitalisation• The Sponsor is an internationally recognised corporation and is the largest listed property company inIndonesia by market capitalisation. It had a market capitalisation of Rp. 10,609.2 billion (approximatelyS$1.8 billion) based on the closing price of its shares of Rp. 1,790.0 on the Jakarta Stock Exchange(“JSX”) as at 18 October 2007. Its property portfolio comprises townships and residential developmentsand commercial and retail development properties.• The Sponsor has a recognised track record and dominant position within the retail and retail propertyindustry in Indonesia. Its employees have in-depth property management and operating experience,including extensive experience in owning, managing, leasing, marketing and developing retailproperties. As at 30 June 2007, the Sponsor has completed eight retail development projects inIndonesia with a total estimated GFA of 581,740 sq m and has six retail development projects with a totalestimated GFA of approximately 483,060 sq m under development.• The Property Manager, being wholly-owned by the Sponsor, will be able to leverage the Sponsor’sextensive experience in property management to enhance the value of the Retail Malls.(See “The Sponsor”.)• In addition, the Sponsor has the ability to identify and enhance under-valued retail properties andleverage its extensive retail network in Indonesia. This is reflected by the Sponsor’s redevelopment ofBandung Indah Plaza. Prior to the Property Manager being appointed as the property manager ofBandung Indah Plaza, the mall had an average monthly Specialty Base Rent of approximatelyRp. 74,203 per sq m as at 1 January 2005. Subsequent to the Property Manager’s appointment asthe property manager, the average monthly Specialty Base Rent increased by approximately 304.3% toapproximately Rp. 300,000 per sq m as at 30 April 2007.The interests of Lippo Strategic, an affiliate of the Sponsor, are substantially aligned with thoseof the Unitholders• Lippo Strategic, an affiliate of the Sponsor, will hold a strategic interest in LMIR Trust by subscribing for287,695,000 Cornerstone Units representing 27.1% of the total issued Units of LMIR Trust as at theListing Date, assuming that the Over-allotment Option is not exercised. The interests of Lippo Strategicand the Sponsor, through this affiliation with Lippo Strategic, will be substantially aligned with those ofUnitholders.As a substantial Unitholder, the Mapletree Group’s interests are substantially aligned withthose of the Unitholders• Mapletree LM, a wholly-owned subsidiary of Mapletree Investments Pte Ltd (“MIPL”), will besubscribing for 127,250,000 Units, representing 12.0% of the total issued Units of LMIR Trust as atthe Listing Date. MIPL is a leading Asia-focused real estate company based in Singapore. MIPL and itssubsidiaries (the “Mapletree Group”), have an asset base of approximately S$4.5 billion (as at 30 June2007) comprising office, logistics, industrial, residential and retail/lifestyle properties.Because of the Mapletree Group’s ownership of Units in LMIR Trust, its interests will be substantiallyaligned with those of Unitholders.Locked-in master leases with rental step-ups for the Retail Spaces• As at Listing Date, each of the Retail Spaces will be leased by the relevant Retail Space Indonesian SPCto the Master Lessee, pursuant to the terms of the relevant Master Lease Agreement. The term of eachof the Master Lease Agreements is 10 years from the Listing Date, with an option for the Master Lesseeto renew for a further term of 10 years.5