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

Risk factorsLMIR Trust will be subject to the operating risks inherent in the retail property industry.The Properties will all be indirectly owned by LMIR Trust as at Listing Date. As such, LMIR Trust will besubject to the operating risks inherent in the retail property industry. The risks that LMIR Trust facesinclude:• cyclical downturns arising from changes in general and local economic conditions;• periodic local oversupply of retail malls, which may adversely affect the results of operations of LMIRTrust;• the recurring need for renovation, refurbishment and improvement of the retail malls;• changes in wages, prices, energy costs and construction and maintenance costs that may result frominflation, governmental regulations, changes in interest rates or currency fluctuations;• availability of financing for operating or capital requirements;• increases in operating costs due to inflation which may not necessarily be offset by correspondingincreases in rental payments from the Properties; and• other factors, including outbreak of communicable diseases, acts of terrorism, natural disasters,extreme weather conditions, labour shortages and work stoppages or disputes.The Gross Revenue earned from, and the value of, the Properties may be adversely affected bya number of factors.The Gross Revenue earned from, and the value of the Properties may be adversely affected by a numberof factors, including:• vacancies following expiry or termination of leases leading to reduced occupancy rates which, in turn,reduce revenue;• the Manager’s ability to collect rent from tenants on a timely basis or at all;• the amount and extent to which the Manager is required to grant rebates on rental rates to tenants dueto market pressure;• tenants seeking the protection of bankruptcy laws which could result in delays in receipt of rentpayments, inability to collect rentals at all or delays in the termination of the tenant’s lease, or whichcould hinder or delay the sale of a Property or the re-letting of the space in question;• the amount of rent payable by tenants and the terms on which lease renewals and new leases areagreed being less favourable than current leases;• the national and international economic climate and property market conditions (such as oversupply of,or reduced demand for, retail space, the release of land for retail development, changes in market rentalrates and changes in operating expenses for the Properties;• the Manager’s ability to procure adequate management and maintenance or to purchase adequateinsurance;• competition for tenants from other similar properties which may affect rental levels or occupancy levelsat the Properties; and• changes in laws and governmental regulations in relation to property, including those governing usage,zoning, taxes and government charges. Such revisions may lead to an increase in managementexpenses or unforeseen capital expenditure to ensure compliance. Rights related to the relevantProperties may also be restricted by legislative actions, such as revisions to the building standards lawsor the town planning laws, or the enactment of new laws related to condemnation and redevelopment.76