LMIR – BT

LMIR Trust makes maiden buy

LIPPO-Mapletree Indonesia Retail Trust (LMIR Trust) yesterday announced its maiden acquisition since its listing in November last year. The trust is buying Sun Plaza, a mall in Medan, North Sumatra, for $147.4 million.

The purchase will increase LMIR Trust’s asset portfolio by 15 per cent to $1.15 billion, from $1.0 billion at present.

It will also increase total net lettable area (NLA) in the trust’s portfolio by about 20 per cent to 376,035 square metres.

The acquisition will be funded 20 per cent with internal cash resources and 80 per cent with debt, drawing from a $125 million term loan facility granted by Deutsche Bank at an effective all-in cost of 6.89 per cent. The purchase takes LMIR Trust’s gearing from zero to 10.2 per cent.

The property is the largest and only upmarket retail mall in Medan, Indonesia’s third most populous city, the trust said. The mall has a land area of about 29,419 sq m and gross floor area and net lettable area of 87,188 sq m and 62,583 sq m respectively. It has a committed occupancy of 97.0 per cent for the month ending April 2008.

LMIR Trust said that there are further opportunities to improve the tenant mix at the mall to increase gross revenue and net property income.

It has identified and held preliminary discussions with many leading Indonesian and international retailers which are currently not represented at the new mall but are tenants of other properties in the trust’s portfolio, the trust said.

After the acquisition, the trust’s manager plans to explore various options to increase rentable area – such as increasing the net lettable area and reconfiguring the layout.

LMIR Trust listed on the Singapore Exchange in November 2007 with a portfolio of seven Indonesian malls and seven retail spaces in other malls. It sold some 645.5 million units at 80 cents each. The trust said then that it aims to triple its portfolio size to $3 billion by end-2009.

LMIR Trust’s shares were last traded at 57 cents.