Circular - Lippo Malls Indonesia Retail Trust - Investor Relations

2.1.4. Increased Economies of Scale in Operations and MarketingThe Proposed Acquisitions and the Recent Acquisitions will enable LMIR Trustto enlarge its presence in the retail mall sector in Indonesia and to benefit fromincreased economies of scale as the Manager and the property manager(s) ofthe Enlarged Portfolio 1 can potentially spread certain operating costs (e.g. staffand personnel costs) over a larger portfolio, and increase their bargainingpower with suppliers and service providers.The Proposed Acquisitions are similarly expected to deliver economies of scaleand benefit the marketing and leasing activities of LMIR Trust by expanding anddeepening LMIR Trust’s portfolio of key tenant relationships, especially withtenants of the Proposed Properties who are currently not tenants of LMIRTrust’s malls.2.1.5. Diversification of Assets Portfolio to Minimise Concentration RisksThe Proposed Acquisitions will allow LMIR Trust to diversify its portfoliogeographically across Indonesia, thereby reducing asset concentration riskswithin LMIR Trust’s Enlarged Portfolio.Following the Proposed Acquisitions, the maximum contribution to LMIR Trust’sNet Property Income by any single property within LMIR Trust’s propertyportfolio will decrease to approximately 13% based on the relevant figures forthe period ended 30 June 2012. Further income diversification means greaterresilience and stability of income streams for LMIR Trust, thus benefiting itsUnitholders.3. THE PROPOSED ACQUISITIONS3.1. The Purchase/Aggregate Consideration and Valuations for the ProposedAcquisitions3.1.1 Pejaten VillageOn 23 October 2012, the Trustee, through its wholly-owned subsidiaries Requisand Gaillard, entered into three separate share purchase agreements with thePejaten Village Vendors (“Pejaten Village CSPAs”) for the acquisition ofPejaten Village. The Pejaten Village Purchase Consideration of Rp.748.0 billion(S$95.1 million) was arrived at on a willing-buyer and willing-seller basis aftertaking into account the valuations of Pejaten Village by the IndependentValuers, and is subject to adjustment for the consolidated net assets or netliabilities of PPP as at the completion date of the Pejaten Village Acquisition.The Pejaten Village Purchase Consideration will be paid on completion of thePejaten Village Acquisition (the “Proposed Completion”) under the PejatenVillage CSPAs, which shall be on a date to be determined in accordance withthe provisions of the Pejaten Village CSPAs.1 “Enlarged Portfolio” means the September 2012 Portfolio, the Proposed Properties and the Recent Properties (asdefined herein).12