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

Leased Malls4.7.8 Future outlookSince opening in December 2003, EP has become the leading modern shopping mall in Bogor. Itscustomer base is derived primarily from nearby residential areas and market research suggests itscustomers are very satisfied with the atmosphere and retail offering currently available. With the centrecurrently undergoing a major re-positioning that is aimed to greatly improve both these aspects, EP is wellplaced to build further on its strengths.With vacant space within the shopping centre, the owners have the potential to greatly increase rentalincome at the centre by leasing up such space.Over time, the proportion of SES A and B customers is forecast to show strong growth in the trade area,providing further opportunities for the centre to tap into this lucrative market by targetting retailers thatappeal to the middle-upper income segment.The market research surveys indicated relatively low per visit spend and a large proportion of windowshoppers at the centre. Increasing the average spend per customer will be aided by the introduction of thelifestyle and entertainment precinct, which should also increase the average length of stay at the centre.The entertainment offer should also improve night time customer numbers, ensuring greater utilisation ofthe shopping centre throughout the day and night.On the competition front, Botani Square, once established, may provide increased competition in themiddle-upper income segment. The current re-positioning at EP, however, should safeguard against thiscompetitive threat and strengthen the market position of EP as the leading retail centre in Bogor.Parking issues are likely to increase as the new levels become fully functional and establish a customerbase. Centre management has indicated that this is a priority and are considering alternatives to increaseparking spaces on the site, improve efficiency and provide overflow spaces on neighbouring sites.It is considered that rental levels for anchor tenants are at the low side of market rentals whilst othercategories are at the market average. The re-positioning of the centre through the centre expansion and remixwill potentially increase customer traffic and sales across the various tenancy categories. This willprovide further rental income growth prospects. Considering these factors and the potential growth of retailspending in the trade area, average rents of EP are projected to grow at approximately 12-15% per yearacross 2007-2009.Table 4.7.7: Rental Positioning, Ekalokasari PlazaTenancy categoryAveragecurrent rents(Rp./sqm/month)Estimatedrange ofmarket rents(Rp./sqm/month)Growth prospectsAnchor Tenants. . . . . . . . . 28,000 35,000 - 40,000 Potential growth on lease renewalMajor Tenants . . . . . . . . . . 49,000 50,000 - 60,000 Potential growth on lease renewalSpecialty Tenants . . . . . . .157,000 150,000 - 175,000 Potential growth due to centreexpansion and re-positioningF&B, Restaurants . . . . . . .136,000 125,000 - 150,000 Potential growth due to centreexpansion and re-positioningSource: Jones Lang LaSalle Research and ConsultingF-106