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

Leased MallsOpportunitiesThreatsExisting renovation and extension providesopportunities to consolidate in the youth segment,improve entertainment and F&B offer and attractadditional “mini-major” anchors (eg. large formatsports stores, and electronics stores)Increased parking provision by relocating centremanagement offices out of basement.Fully utilising plaza area for al fresco dining andopen air activities/special events. This reinforcesBIP as the meeting place for Bandung.Source: Jones Lang LaSalle Research and Consulting4.3.8 Future OutlookPotential for new centres to come into the marketand compete in the middle income target market.Strong new competition in the leisure and lifestylearea from Bandung Supermal (which isconstructing an adjoining snow centre) and Parisvan Java (Blitz Cinemas, al fresco dining)There is considerable upside for the trading performance in the short to medium term at BIP due to thecurrent renovations. While there is considerable space remaining to be leased, the centre has the benefitof a very good location in the centre of Bandung and is well established in the local market. Its strength inthe youth segment should be consolidated as a result of the current upgrade.The reconfiguration of the Matahari Department Store provides an opportunity to better integrate this storewith the main building fronting Jl. Merdeka. While the loss of Yogya, particularly on level 1 and 2, hasremoved a destination anchor from the southern end of the centre, the reconfigured floor plans provide anopportunity to greatly increase the level of specialty retailing and rental income. Attracting high profilespecialty retailers and mini anchor stores (for example sports stores, and electronics stores) will assist ingenerating foot traffic and leasing up these areas.The plaza area provides significant potential to attract major F&B retailers, which in turn should attractadditional customers to the centre. The refurbished plaza should reinforce BIP as the meeting place inBandung.Parking at the centre remains an issue, despite additional spaces being available nearby. Additionalspaces created through the removal of the basement centre manager’s office will partially relieve theparking congestion.Current rental positioning at BIP is considered to be at the high side of market rentals, suggesting thatincome growth prospects may be limited in the short term. It is considered, however, that the re-positioningof the centre, which will change the tenant balance in favour of higher rental generating specialty and F&Btenants, should have an overall positive influence on rental income in the short to medium term.Considering these factors and the potential growth of retail spending in the trade area, average rentsof BIP are projected to grow at approximately 11-13% per year across 2007-2009.Table 4.3.7: Rental positioning, Bandung Indah PlazaTenancy categoryAveragecurrent rents(Rp./sqm/month)Estimated rangeof market rents(Rp./sqm/month)Growth prospectsAnchor Tenants. . . . . . . 50,000 40,000 - 50,000 New Hypermart and renovatedMatahari should improve overallcentre performanceMajor Tenants . . . . . . . . 112,000 80,000 - 110,000 Potential growth upon rental reviewSpecialty Tenants . . . . . 334,000 200,000 - 325,000 Centre re-positioning will increaseproportion of specialty tenantsF&B, Restaurants . . . . . 214,000 225,000 - 280,000 Centre re-positioning will increaseproportion of F&BSource: Jones Lang LaSalle Research and ConsultingF-74