Circular - Lippo Malls Indonesia Retail Trust - Investor Relations

KJPP WR and KJPP RHP were appointed by the Trustee and the Manager,respectively, to value Pejaten Village. In their respective reports, KJPP WR andKJPP RHP have stated the open market value of Pejaten Village as at 30 June2012 to be Rp.870.2 billion (S$110.6 million) and Rp.841.0 billion (S$106.9million), respectively. In arriving at the independent valuations, both KJPP WRand KJPP RHP used the income valuation method, utilising a discounted cashflow analysis.Basis and assumptions in arriving at independent valuations for PejatenVillageThe basis and assumptions adopted by KJPP WR and KJPP RHP in arriving attheir respective valuations of Binjai Supermall are set out in the table below.KJPP WRKJPP RHPEstimated discount ratesusing pre-tax rates thatreflect current marketassessments at the risksspecific to the properties 11.50% 10.36%Rental Growth rates 5.0% 6.0%Cash flow forecasts derivedfrom the most recentfinancial budgets and plansapproved by managementDiscountedcash flow analysisover 6 yearsprojections(5 years holdingperiod) (1)Discountedcash flow analysisover 11 yearsprojections(10 years holdingperiod) (1)Terminal capitalisation rates 10.0% 11.0%Note:(1) The number of projection years for the cashflow forecasts which each valuer deemedappropriate is based on their independent assessment of the numbers of years required forthe properties to reach a high level of income stability, which the valuers had in turndetermined based on their respective professional opinion as to the investment holdingperiods for the properties. The factors which the valuers had taken into account include,among others, the properties’ existing occupancy rates, the time taken for the properties toachieve maximum occupancy levels, the date of commencement of operation of theproperties and potential impact from the on-going asset enhancements activities.(Please see Appendix D of this Circular for the summary valuation reports ofthe Independent Valuers on Pejaten Village.)3.1.2 Binjai SupermallOn 23 October 2012, the Trustee, through its wholly-owned subsidiary ACU,entered into a conditional sale and purchase agreement with the BinjaiSupermall Vendors (the “Binjai Supermall CSPA”) for the acquisition of BinjaiSupermall. The Binjai Supermall Aggregate Consideration of Rp.237.5 billion(S$30.2 million) was arrived at on a willing-buyer and willing-seller basis aftertaking into account the valuations of Binjai Supermall by the IndependentValuers (as defined herein). The Binjai Supermall Aggregate Considerationcomprises a purchase consideration of Rp.154.95 billion (S$19.7 million) for theSale of Binjai Supermall and a novation consideration of Rp.82.55 billion(S$10.5 million) for the Novation of Binjai Units. The Binjai Supermall AggregateConsideration will be paid on completion of the Binjai Supermall Acquisition (the“Proposed Completion”) under the Binjai Supermall CSPA, which shall be ona date to be determined in accordance with the provisions of the BinjaiSupermall CSPA.13