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

Leased MallsA number of planned and potential improvements to the centre will be beneficial. Further enhancements tocertain precincts in the centre (such as the new mobile phone precinct on the basement level) will improvethe ambience of the centre, helping it to compete with newer shopping centre developments. If undertakenin coordination with a broader reinforcement of the tenancy mix strategy, these enhancements shouldimprove centre income by maximising pedestrian flows, reducing vacancy levels and increasing revenues.Figure 4.6.4 Gajah Mada Plaza—centre atriumSource: Jones Lang LaSalle Research and ConsultingReinforcing the centre zoning strategy by creating stronger ‘destinations’ around the mall should alsoassist with improving average spending levels and length of visitation. Given that visitors to the centre, andresidents of the trade area more broadly, have relatively high levels of disposable income, furtheropportunities exist to increase GMP’s market share of total retail spending amongst its target marketby increasing visitors’ time spent at the centre (and, ultimately, increasing their average spend at thecentre).The Rimo department store is considered to have further potential. Currently trading from a number ofspecialty store as well as its own main tenancy, reconfiguring the specialty shop layout near the entrance toRimo would have a number of benefits. Firstly, it could increase the area of the department store anchorand improve its presentation. In addition, converting some specialty shop space to department store spacewould trigger some further remix of tenants, which could result in some inappropriately located tenanciesmoving to a location which reflects the tenancy mix strategy to create a number of ‘destination’ zoneswhere comparison shopping opportunities are stronger, resulting in customers staying for longer periods.With current rent levels considered to be below market and positive improvements to the tenancy mixcurrently taking place, the rental growth prospects for GMP are sound. As highlighted earlier, there is alsopotential upside from increasing existing occupancy levels. Considering these factors and the potentialgrowth of retail spending in the trade area, average rents of GMP are projected to grow at approximately11-13% per year across 2007-2009.F-98