SINGAPORE: LMIRT Management Ltd., the manager of Lippo Malls Indonesia Retail Trust, has announced that it has entered into a conditional sales and purchase agreement with PT Mandiri Cipta Gemilang, a wholly-owned subsidiary of PT Lippo Karawaci Tbk, the sponsor of LMIR Trust, for the proposed acquisition of Lippo Mall Puri (Puri Mall) at a purchase consideration of S$354.7 million.
[the_ad id=”32940″]The purchase consideration represents an attractive 5.13% discount to the lower of two independent valuations by Cushman & Wakefield VHS Pte Ltd and Colliers International Consultancy & Valuation (Singapore) Pte Ltd.
The Acquisition will grow LMIR Trust’s portfolio to 31 properties comprising 24 retail malls and seven retail spaces and is expected to boost LMIR Trust’s assets by 19.0%. The acquisition will also increase the Trust’s total net lettable area (NLA) by 12.69%.
As Puri Mall is still maturing in terms of shopper recognition, tenant performance and passing rents, PT Mandiri Cipta Gemilang has also agreed to provide support from completion of the acquisition, with a guaranteed level of net property income (NPI) of Rp.348.0 billion up to December 2019, increasing to Rp.356 billion in December 2023.
Completion of the acquisition is conditional upon, among others, completion of the segregation of the existing land titles and issuance of strata title certificates for Puri Mall and the Trust securing sufficient financing for the acquisition, a statement issued to Singapore Exchange (SGX) noted.
Gouw Vi Ven, Chief Executive Officer of the REIT Manager said, “This is a great opportunity to acquire an iconic and premier asset at an attractive price. With the on-going positive economic developments within Indonesia, as shown by the gradual recovery of the Indonesian Rupiah to Singapore Dollar since the beginning of this year, the entry into a conditional sale and purchase agreement for Puri Mall allows us to lock in the attractive price.
“We aim to complete the acquisition in the second half of 2019 after issuance of the strata title certificates for Puri Mall. To ensure a smoother completion process and to better protect the interest of the Unit holders, the timing of any fund-raising exercise to finance this acquisition will take into account the timing of the issuance of the strata title certificates for the mall.
“With its high growth potential in the long run supported by its strategic location within the heart of the Puri Indah central business district and close proximity to an affluent residential area and captive shopper traffic, we are confident that Puri Mall is well-placed to meet the needs of shoppers and a great addition to our portfolio.
“We have consistently articulated our plans to grow the Trust inorganically to generate long term value for our Unit holders. This acquisition with an NPI yield of 9.41% will further boost the Trust’s existing portfolio NPI yield of 8.94% to 9.02% on a pro forma basis as of December 31, 2018 and reaffirms our commitment to continually secure high-quality income-producing assets to sustain long-term growth.”
Strategically located in the bustling Puri Indah commercial precinct of West Jakarta, Puri Mall is the flagship mall and the retail component of the St Moritz Jakarta Integrated Development, the largest premium mixed-use development in West Jakarta.