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

Leased MallsThe current Hypermart extension provides a significant opportunity to improve the retail offering as well asthe overall trading performance and income of the centre. Not only will Hypermart provide improvedsupermarket and variety shopping at MLC but it should strengthen the performance of specialty retailers byincreasing the overall destination appeal of the centre. The extension also provides the opportunity forMatahari Department Store to extend its floor space into the existing Matahari Supermarket (which willclose once Hypermart opens) and therefore increase its department store offering.While population growth is forecast to be quite modest over the short to medium term, the centre’s currentexpansion has the potential to increase market share and attract more customers to the centre, particularlyfrom outside the Lippo Cikarang Estate. The expansion should also provide scope for income growth.There has been quite limited refurbishment of the centre since it opened 12 years ago. It is considered thatthe centre requires minor refurbishment and maintenance to ensure the captive customer base remainsloyal in the face of future competition.Additional specialty retailers focusing on the middle-upper market is an area for consideration in the future.Relatively few retailers cater for the wealthier income brackets despite a relatively large middle to upperincome customer base in the PTA.The factors above should all provide considerable upside to growth prospects for rental income over theshort to medium term. It is considered that current specialty, F&B and restaurant rent levels are on the lowside of market rentals, suggesting there is potential to increase rental levels upon lease renewal. This isfurther boosted by the addition of a new anchor tenant in Hypermart and an expanded MatahariDepartment Store.Considering these factors and the potential growth of retail spending in the trade area, average rents ofMLC are projected to grow at approximately 12-15% per year across 2007-2009.Table 4.5.7: Rental positioning, Mal Lippo CikarangTenancycategoryAverage currentrents(Rp./sqm/month)Estimated rangeof market rents(Rp./sqm/month)Growth prospectsAnchor Tenants . . . . . . . . . . . 46,000 45,000 - 50,000 Potential growth on leaserenewalMajor Tenants . . . . . . . . . . . . 42,000 60,000 - 70,000 Potential growth on leaserenewalSpecialty Tenants . . . . . . . . . . 144,000 150,000 - 175,000 Potential growth on leaserenewal.Upside due to new Hypermartand expanded MatahariF&B, Restaurants . . . . . . . . . . 121,000 125,000 - 150,000 Potential growth on leaserenewal.Upside due to new Hypermartand expanded MatahariSource: Jones Lang LaSalle Research and Consulting4.6 Gajah Mada Plaza4.6.1 Regional context and local economyGajah Mada Plaza (GMP) is located at Jalan Gajah Mada 19-26, Jakarta, in the city’s traditional Chinatownprecinct. This area includes a mix of residential and commercial uses. The centre is also located just northof Gambir, where a number of the city’s main civic buildings are located.Having been opened for 25 years, the centre is well established as one the first enclosed malls with ananchor tenant and a number of supporting specialty stores operating in Jakarta. The centre has firmed itsposition as a shopping destination able to meet the everyday retail requirements of local residentsconsidered to be in the middle and middle-upper segments. Similarly, the centre also performs the broaderF-89