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

Risk factorsProspective investors should consider carefully, together with all other information contained in thisProspectus, the factors described below before deciding to invest in the Units.This Prospectus also contains forward-looking statements (including profit forecast and profit projection)that involve risks, uncertainties and assumptions. The actual results of LMIR Trust could differ materiallyfrom those anticipated in these forward-looking statements as a result of certain factors, including the risksfaced by LMIR Trust as described below and elsewhere in this Prospectus.As an investment in a REIT is meant to produce returns over the long-term, investors should not expect toobtain short-term gains.Investors should be aware that the price of Units, and the income from them, may fall or rise. Investorsshould note that they may not get back their original investment.Before deciding to invest in the Units, prospective investors should seek professional advice from theirrelevant advisers about their particular circumstances.RISKS RELATING TO LMIR TRUST’S OPERATIONSLMIR Trust’s strategy of investing primarily in retail assets may entail a higher level of riskcompared to other types of unit trusts that have a more diverse range of investments.LMIR Trust is a Singapore-based REIT constituted by the Trust Deed. It is established with the principalinvestment objective of owning and investing on a long-term basis in a diversified portfolio of incomeproducingreal estate in Indonesia that are primarily used for retail and/or retail-related purposes, and realestate related assets in connection with the foregoing.As such, LMIR Trust will be subject to risks inherent in concentrating on investments in a single real estatesector. The level of risk could be higher compared to other types of unit trusts that have a more diverserange of investments.A concentration of investments in a portfolio of specific real estate assets primarily in Indonesia exposesLMIR Trust to both downturns in the real estate market as well as the retail industry in Indonesia.In addition, the nature of the retail industry makes it particularly susceptible to a downturn in the economy.A lagging economy could lead to retrenchments and job losses, which, in turn, would lead to a reduction inconsumer spending. Such downturns could also lead to a decline in occupancy for retail propertiesincluding those in LMIR Trust’s portfolio thereby affecting LMIR Trust’s rental income from the MasterLessee and the tenants and/or a decline in the capital value of LMIR Trust’s portfolio.Any decline in the overall retail sector may cause higher levels of non-renewals of leases or vacancies as aresult of failures or defaults by tenants or the market pressures exerted by an increase in available retailspace. There can be no assurance that the tenants of LMIR Trust’s operating retail properties will renewtheir leases or that the new lease terms will be as favourable as the existing leases. In the event that atenant does not renew its lease, a replacement tenant or tenants would need to be identified, which couldsubject LMIR Trust’s operating retail properties to periods of vacancy and/or costly refittings, during whichperiods LMIR Trust could experience reductions in rental income.Such downturns may have an adverse impact on distributions to the Unitholders and/or on the results ofoperations and the financial condition of LMIR Trust.LMIR Trust is dependent on the Master Lessee for rental payments for the Retail Spaces.LMIR Trust is dependent on rental payments from the Master Lessee for the Retail Spaces, as LMIR Trustdoes not directly operate the Retail Spaces. The Master Lessee is the sole tenant of each of the RetailSpaces. The Retail Spaces are expected to contribute more than 15% of LMIR Trust’s rental revenue.Therefore, LMIR Trust’s revenue and ability to make distributions to the Unitholders will depend largelyupon the ability of the Master Lessee to make rental payments. As such, the prospects of the MasterLessee’s other businesses, aside from those relating to LMIR Trust, could impact on the Master Lessee’sability to make rental payments to LMIR Trust.65