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

Risk factorsacquisitions is limited by the Property Funds Guidelines (described in more detail above), suchacquisitions are likely to be largely dependent on LMIR Trust’s ability to raise equity capital, whichmay result in a dilution of Unitholders’ holdings. Potential vendors may also take a negative view towardsthe prolonged time frame and lack of certainty generally associated with the raising of equity capital to fundany such purchase and may prefer competing purchasers.There may be significant competition for attractive investment opportunities from other property investors,including commercial property development companies and private investment funds. There can be noassurance that LMIR Trust will be able to compete effectively against such entities.Future acquisitions may not yield the returns expected, resulting in disruptions to LMIR Trust’sbusiness, a strain on management resources and dilution of holdings.LMIR Trust’s external growth strategy and its market selection process may not be successful and may notprovide positive returns to Unitholders. Acquisitions may cause disruptions to LMIR Trust’s operations anddivert management’s attention away from day-to-day operations. New Units issued in connection with anynew acquisition could also be substantially dilutive to Unitholders. In addition, the acquisitions themselvesmay not be yield accretive to Unitholders.LMIR Trust depends on certain key personnel, and the loss of any key personnel may adverselyaffect its operations.LMIR Trust’s performance depends, in part, upon the continued service and performance of key staffmembers of the Manager. These key personnel may leave the Manager in the future and compete with theManager and LMIR Trust. The loss of any of these individuals, or of one or more of the Manager’s other keyemployees, could have a material adverse effect on LMIR Trust’s financial condition and results ofoperations.LMIR Trust may suffer material losses in excess of insurance proceeds.The Properties face the risks of suffering physical damage caused by fire or natural disaster or othercauses, as well as potential public liability claims, including claims arising from the operations of theProperties, all of which may not be fully compensated by insurance proceeds. LMIR Trust will remain liablefor any debt or other financial obligation related to a particular Property if there are material losses inexcess of insurance proceeds. No assurance can be given that material losses in excess of insuranceproceeds will not occur in the future.LMIR Trust’s properties could suffer physical damage caused by tsunamis, fire or other causes, or LMIRTrust may suffer public liability claims, all of which may result in losses (including loss of rent) that may notbe fully compensated by insurance proceeds. In addition, certain types of risks (such as damage causedby earthquakes, war risk and losses caused by the outbreak of contagious diseases and contamination orother environmental breaches) may be uninsurable or the cost of insurance may be prohibitive whencompared to the risk. Currently, LMIR Trust’s insurance policies for the Properties do not cover certaintypes of risks including acts of war and outbreaks of contagious diseases.Should an uninsured loss or a loss in excess of insured limits occur, LMIR Trust could be required to paycompensation and/or lose capital which it had invested in the affected Property as well as anticipatedfuture revenue from that Property. LMIR Trust will also remain liable for any debt or other financialobligation related to that Property. No assurance can be given that material losses in excess of insuranceproceeds will not occur in the future.All of the Properties are subject to various types of taxes in Indonesia.The Properties are subject to real and personal property taxes. This will change as property tax rateschange and as the Properties are assessed or reassessed by the relevant tax authorities. If LMIR Trust’sproperty tax liabilities increase, its ability to make distributions to the Unitholders could be adverselyaffected.71