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

Appendix EValuation RationaleIn arriving at our opinion value, we have considered relevant general and economic factors. We haveutilized Discounted Cash Flow Analysis and Direct Comparison in undertaking our assessment of theProperties. We have investigated recent sales and leasing transactions of comparable properties thathave occurred in the shopping center market.Discounted Cash Flow AnalysisThis approach gives consideration to the existing income earning and the future expectation income at thecertain time, which can be generated by the property. The stream of future earnings are either capitalizedor discounted at an appropriate rate to arrive at an indication of value at which ownership would be justifiedby a prudent investor. We have carried out a discounted cash flow analysis over a 5-year investmenthorizon in which we have assumed that the Properties is sold at the commencement of the sixth year of thecash flow. This form of analysis allows an investor or owner to make an assessment of the long term returnthat is likely to be derived from the properties with a combination of both rental and capital growth over anassumed investment horizon.In undertaking this analysis, a wide range of assumptions are made including a target internal rate ofreturn, rental growth, sales turnover growth and sale price of the property at the end of investment horizon.While the Properties generate mostly Indonesian Rupiah denominated cash flow, we understand thatthere will be hedging arrangement in place that allows us to appropriately assume that the cash flow will beconverted from Indonesian Rupiah into Singapore Dollar and to value the Properties by taking intoconsideration such an arrangement.The following table summarizes the key details for each of the Properties:PropertiesLandarea (m 2 )Grossbuildingfloor area(m 2 )Netlettablearea (m 2 )LandtitleLandzoningBandung Indah Plaza. . . . . . . . . . . . . . . . . 15,779 55,196 26,472 BOT CommercialIstana Plaza. . . . . . . . . . . . . . . . . . . . . . . . 13,082 37,434 27,247 BOT CommercialCibubur Junction . . . . . . . . . . . . . . . . . . . . 31,987 49,341 34,139 BOT CommercialEkalokasari Plaza . . . . . . . . . . . . . . . . . . . 10,500 39,895 20,587 BOT CommercialMal Lippo Cikarang . . . . . . . . . . . . . . . . . . 49,250 25,767 17,974 HGB CommercialThe Plaza Semanggi . . . . . . . . . . . . . . . . . 19,000 91,232 58,685 BOT CommercialGajah Mada Plaza . . . . . . . . . . . . . . . . . . . 37,501 (1) 66,160 34,278 HGB CommercialPlaza Madiun. . . . . . . . . . . . . . . . . . . . . . . 5,583 — 19,029 HGB CommercialRetail spaces at Depok Town Square. . . . . — — 13,045 Strata CommercialRetail spaces at Grand Palladium . . . . . . . — — 13,417 Strata CommercialRetail spaces at Mall WTC Matahari . . . . . — — 11,184 Strata CommercialE-58