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

Risk factorsfavour of retaining these four Retail Spaces, the Trustee shall be entitled to exercise the put option withinthree months of the date of the meeting of the Unitholders.Upon exercising the put option, the Master Lessee will be required to purchase the entire issued andpaid-up capital of the relevant Singapore SPCs, which through the Indonesian SPCs, own these four RetailSpaces at the consideration of the higher of (i) the net asset value of the relevant Indonesia SPCs as at thedate of service of the put option notice as determined from the audited consolidated accounts of the SPCsand (ii) the net asset value based on the value attributed to these four Retail Spaces for the purpose of theListing, in each case, also taking into account all transaction costs incurred directly and indirectly by LMIRTrust for the acquisition of these four Retail Spaces. (See “Certain Agreements relating to LMIR Trust andthe Properties—Description of the Put Option Agreements”.) The Trustee (acting on the advice andrecommendation of, and after discussions with, the Manager) is satisfied with the computation of the saidtransaction costs as set out in the put option agreement.Although the Manager will endeavour to acquire comparable retail spaces in order to maintain or enhanceLMIR’s distribution per Unit, there is no assurance that this can be achieved. In the event that comparableretail spaces cannot be acquired, the Gross Revenue, the income available for distribution by LMIR Trustto Unitholders, the distribution per Unit and the distribution yield for the Projection Year 2009 may beadversely affected.The market values of the Properties may differ from their values as determined by theIndependent Valuers.The valuations were generally conducted using a combination of valuation methods such as thediscounted cash flow method and the investment income capitalisation method. Property valuationsgenerally include a subjective determination of certain factors relating to the relevant properties, such astheir relative market positions, their financial and competitive strengths and their physical conditions. Themarket values of the Properties may therefore differ from the values of the Properties as determined by theIndependent Valuers.The values of the Properties (as determined by the Independent Valuers) are not an indication of, and donot guarantee, a sale price at that value at present or in the future. The price at which LMIR Trust sells aproperty may be lower than its value as determined by the Independent Valuers.The Properties may face increased competition from future retail developments in Indonesia.The retail property industry is competitive and may become increasingly so. Each of the Properties islocated in an area that has competing retail malls. They may also compete with retail malls in Indonesiadeveloped in the future. The income from, and market value of, the Properties will be largely dependent onthe ability of the Properties to compete against other retail properties in Indonesia in attracting andretaining tenants. An increase in the number of competitive retail malls in Indonesia, particularly in theareas where the Properties are located, could have a material adverse effect on the revenue of theProperties, as such increased competition may have an adverse impact on the ability of the lessees of theRetail Malls or the Master Lessee of the Retail Spaces to make rental payments.Amenities and transportation infrastructure near the Properties may be closed, relocated orterminated.The proximity of amenities and transportation infrastructures, such as train stations and bus interchanges,to the Properties provides convenient access to the Properties and a constant flow of shopper traffic.There is no assurance that the amenities and transportation infrastructure and shuttle services will not beclosed, relocated or terminated in the future. Such closure, relocation or termination may adversely affectthe accessibility of the Properties which will reduce the flow of shopper traffic to the Properties. This maythen have an adverse effect on the demand for and the rental rates of the Properties and adversely affectthe financial position of LMIR Trust.78