Singapore’s First Indonesia Retail REIT
February 2010 Full Year 2009 Results Presentation Disclaimer
Certain statements in this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These forward-looking statements reflect our current views with respect to future events and financial performance and are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in the Indonesian retail industry including those factors which may affect our ability to attract and retain suitable tenants, our ability to manage our operations, reduced demand for retail spaces, our ability to successfully complete and integrate potential acquisitions, liability for damages on our property portfolios, the success of the retail malls and retail spaces we currently own, withdrawal of tax incentives, political instability, and legal restrictions on raising capital or acquiring real property in Indonesia. In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in our preliminary prospectus lodged with the Monetary Authority of Singapore on 19 October 2007. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. We undertake no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
2 Contents CONTENTS
1. Overview of LMIR Trust & Key Highlights ………………………..………………..…………..……. 4-6 2. Financial Results ………………………………………………………….……….…………….……...... …. 7-12 3. Portfolio Performance ………………………………………………….……….…………….…….…... 13-21 4. LMIR Trust Growth Strategies ...... 22-23 5. Acquisitions ………………………………………………………………….……………….…………..…...….. 24 6. Asset Enhancements …………………………………………………………..……….……….…….…. 25-26 7. Sponsor …………………………………………………………………………………………..……….…….. 27-29 8. Summary …………………………………………………………………………………………..…………... 30-31 9. Appendix ……………………………………………………..…………………………………..……………. 32-35 Overview of LMIR Trust
4 First Indonesia Retail REIT in Singapore
Key statistics
Gajah Mada Plaza Initial portfolio of 8 quality Retail Malls and Sun Plaza Metropolis Town Square 7 Retail Spaces. Medan The Plaza Semanggi Grand Palladium Mall WTC Matahari Mall Lippo Cikarang Total NLA: 403,342 sqm1 Total valuation: S$ 1.056 billion2 Grand Palladium Medan DepokTown Square Weighted average occupancy rate of the Cibubur Junction Ekalokasari Plaza portfolio1 : 96.9% Kalimantan Sumatra Retail Spaces are master leased to Matahari Sulawesi Sarmi for 10+10 years with stepped annual rental Istana Plaza Palembang Java Supermal Malang Town Square Irian Jaya increments for 2007-2011 and variable rent Jakarta Makassar Semarang increments for 2012-2016. JavaSurabaya Bandung Bali Sumbawa PlazPlaza Madiun Portfolio characteristics Retail Malls Retail Spaces Bandung Indah Plaza Strategically located with large population catchment areas Strategy to invest in Indonesian retail properties. Indonesia has a population of over 245 Conveniently accessible by public million people. In addition it has 60 different districts with a population of greater transportation and well connected by than 1 million people. highways Retail portfolio comprises established and seasoned malls and spaces, with strong shopper 5 of the Retail Malls are located in greater traffic . Jakarta, 2 in Bandung, and 1 in Medan Quality and diverse tenant base Target segment: Urban middle – high Notes: 1 As at 31 December 2009 income local community 2 Adopted valuation from CBRE as at 31 December 2009 in IDR, converted to SGD at the year end exchange rate 5 Key Highlights
Financial FY 2009 DPU of 5.04 cents equates to an annualised yield of 9.9% at price of 51 cents1 Results NAV = S$0.83 with low gearing 10.5%
Occupancy of 96.9% as at 31 December 2009 versus industry average of 82.8%2 Portfolio Update Well diversified portfolio with no particular trade sector accounting for more than 17% of LMIR Trust’s total NLA and no single property accounting for more than 17% of LMIR Trust’s total net property income
Recent asset enhancements successfully completed Strategic Acquisition pipeline of quality assets available Issues Strategies for organic growth being pursued
Indonesian President predicts economic growth to average 6.6% over the next 5 years Economic Government also planning to cut unemployment, reduce the poverty rate and increase Outlook spending on infrastructure Indonesian retail market expected to perform better in line with improving economic conditions. Note: 1. Closing price of $0.51 on 31 December 2009 2. Source: Cushman Wakefield Indonesia Q4 2009 Retail Report 6 Financial Results
7 FY 2009 Financial Results – P&L
Actual Actual Variance FY 09 FY 08 Remarks (%) (S$'000) (S$'000) Mainly due to: i. A reduction in casual leasing income as well as lower carpark and miscellaneous income such as signage fees as retailers reduced the 79,638 92,794 (14.2%) Gross Revenue amount of expenditure on promotional activities ii. The IDR depreciating against the SGD over the period when compared to FY 2008 Mainly due to: i. Allowance for outstanding receivables of $7M made in FY 2008. No similar allowance was made in FY 2009 ii. Lower land rental of $0.5M mainly arising from lower land rental (4,529) (12,807) 64.6% Property Expenses payment from Plaza Semanggi, Cibubur Junction and Bandung Indah Plaza. iii. Lower property management fee of $0.7M arising from the lower gross rental and net property income The lower gross revenue offset by lower property operating expenses resulted Net Property income 75,109 79,987 (6.1%) in lower net property income at $75.1M, which is $4.9M, or 6% lower than FY 2008. Distribution income 54,009 52,903 2.1% Distribution per unit 5.04 4.96 1.6% (cents) 1 Distribution yield2 (%) 9.9 Notes: 1. Based on 1.075 billion units in issue as at 31 December 2009 8 2. Based on the closing price of $.0.51 as at 31 December 2009 FY 2009 Financial Results – Balance Sheet
31-Dec-08 31-Dec-09 (S$ million) (S$ million) Non Current Assets 882.4 1,056.11 Current Assets 125.3 132.1 Total Debt 125.02 125.02 Other Liabilities 114.5 171.7 Net Assets 768.2 891.5 Net Asset Value S$0.72 S$0.83 Average Cost of Debt 6.4% p a 7.7% p a Total Units in Issue 1.066 billion 1.075 billion
Notes: 1. Adopted valuation from CBRE as at 31 December 2009 in IDR, converted to SGD at the year end exchange rate 2. DB loan expires 24 March 2012. Interest cost is fixed at 2.03% until 31 May 2011 plus margin and costs. 9 Distribution Details
1 October 2009 – 31 December 2009
Total DPU 1.16c
Tax-Exempt 0.90 c
Capital 0.26 c
Books Closure Date 19 February 2010
Distribution Payment Date 2 March 2010
Since listing in Nov 2007, LMIR Trust has maintained a payout policy of 100% of distributable income FOR FY 2010, LMIR TRUST CURRENTLY PLANS TO MAINTAIN A 100% DISTRIBUTION PAYOUT 10 2009 Unit Price Performance
LMIR Trust Share Price Performance & Trading Liquidity
2 40 Notes:
1.8 35 LMIR Trust unit price has 1.6 30 performed in line with STI during 1.4 2009 25 1.2 1 +63% 20 Market capitalization is S$548 0.8 million as at 31 December 2009 15 0.6 In FY 2009 10 LMIRT unit price has been trading 0.4 around 50 cents since the end of 5 0.2 December 0 0 Traded volume for FY 2009 is 293 million units LMRT Vol JCI FSSTI LMRT SREIT Notes: 1. Based on the closing price of $0.51 as at 31 December 2009 11 Attractive yield compared to other local investment products
12.0%
9.9% 10.0%
8.0%
6.0%
4.0% 4.0% 2.9% 2.7% 2.5%
2.0% 1.3% 0.5% 0.0% LMIR Trust 10 Year S'pore 5 Year S'pore CPF Ordinary Average SGD STI Yield6 FTSE ST REIT annualised Govt Bond 2 Govt Bond 3 Account 4 12-mth Fixed Index Yield 7 yield (FY09) 1 Deposit Rate 5
Notes: 1. Based on LMIR Trust’ closing price of 51 cents per unit as at 31 December 09 and distribution of 5.04 cents per unit for FY 2009 2. Singapore Government 10-Year bond yield as at 31 December2009 3. Singapore Government 5-Year bond yield as at 31 December 2009 4. Prevailing CPD-Ordinary Account savings rate (Source: CPF website) 5. Based on 12-month SGD fixed deposit savings rate as at December 2009 6. Based in 12-month gross dividend yield of Straits Times Real Estate Index as at 31 December 2009 7. Based on 12-month gross dividend yield of stocks in the FTSE ST Real Estate Investment Trust index as at 31 December 2009 12 Portfolio Performance
13 LMIRT Annual Asset Valuation
S$'Million LMIRT Portfolio as at 31 December 2009 Valuation as at 30 Valuation as at 31 Surplus November 20081 December 20092
1 The Plaza Semanggi 136.5 184.8 48.3 2 Gajah Mada Plaza 79.3 99.9 20.6 3 Cibubur Junction 60.7 73.3 12.6 4 Bandung Indah Plaza 87.3 118.8 31.5 5 Istana Plaza 89.5 95.9 6.4 6 Ekalokasari Plaza 37.5 51.3 13.8 7 Mal Lippo Cikarang 51.5 66.2 14.7 8 Sun Plaza 140.4 175.4 35.0 9 13,045 Sqm Retail Space at Depok Town Square 19.3 25.7 6.4 10 11,184 Sqm Retail Space at Mal WTC Matahari 18.9 25.3 6.4 11 15,248 Sqm Retail Space at Metropolis Town Square 25.1 33.7 8.6 12 11,082 Sqm Retail Space at Java Supermall, Semarang 19.7 26.3 6.6 13 19,029 Sqm Retail Space at Plaza Madiun 25.3 28.9 3.6 14 11,065 Sqm Retail Space at Malang Town Square 19.3 26.4 7.1 15 13,417 Sqm Retail Space at Grand Palladium 19.6 24.2 4.6
Total 830.0 1,056.0 226.1 Note: Exchange rate as at 31 December 2009: Rupiah 6,701.44 1. Represents the book value in LMIR Trust’s balance sheet as at 31 December 2009 based on either the most recent valuation plus any subsequent capital expenditure or if acquired recently purchase price plus any capital expenditure and other acquisition costs committed. 14 2. Valuation date for all properties is 31 December 2009. Portfolio Update: Occupancy
Portfolio Occupancy Profile
Actual As at As at LMIR Trust’s mall portfolio occupancy is NLA No. Malls 2008 Sep 09 Dec 09 96.9%, which is higher than the industry (sqm) (%) (%) (%) average of 82.2%1
1 Bandung Indah Plaza 30,203 97.9 99.3 99.3 Occupancy is generally higher than average due to good locations of the 2 Cibubur Junction 34,212 96.7 97.4 98.3 malls, good customer targeting and 3 Ekalokasari Plaza 25,860 93.7 97.4 98.2 strong mall operator in Lippo Karawaci 4 Gajah Mada Plaza 35,173 96.1 89.8 98.8 Occupancy in MLC is lower due to the 5 Istana Plaza 27,535 99.5 80.1 97.1 lease expiry of Hero Supermarket. 6 Mal Lippo Cikarang 28,713 93.6 86.7 86.9 However most of this space is under temporary leasing. Thus, there is 7 The Plaza Semanggi 64,280 93.6 92.2 93.8 minimal impact in terms of rental 8 Sun Plaza 63,296 96.2 96.8 96.5 revenue. Half of the vacant space is A Mall Portfolio 309,272 95.7 93.0 96.0 already committed by another anchor B Retail Spaces 94,070 100 100 100 tenant. The remaining space is under offer. A+B Total Portfolio 403,342 96.7 94.6 96.9 Industry Average 82.21 Note: 15 1. Source : Cushman & Wakefield Indonesia Q4 2009 Retail Report Top 10 Mall Tenants by Gross Income
Time Zone 0.6%
Millenium Exec. Club 0.6% Total 15.8% of
SOGO 0.7% mall portfolio gross income Solaria 0.9%
Giant Supermarket 0.9%
Ace Hardware 1.0%
Gramedia 1.0%
Centro 1.2%
Matahari Dep. Store 4.1%
Hypermart 4.8%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
16 Portfolio Update: Diversification
Bandung Indah Plaza Cibubur Junction Ekalokasari Gajah Mada Plaza Istana Plaza Mal Lippo Cikarang Plaza Semanggi Sun Plaza Retail Spaces
16% 17%
6%
18% 9%
8%
5% 12% 9%
Note: As at 31 December 2009 17 Portfolio NLA Breakdown By Trade Sector
Department Store 17% Fashion Books & Stationary 1% 9% Hobbies 6% Education / School 3% 1% Supermarket / Hypermarket 0% Casual & Others 5% Sports & Fitness Toys 14% Leisure & Entertainment Electronic / IT 14% Gifts & Specialty Jewelry F & B / Food Court 1% 1% 9% Home Furnishing 3% Services 4% 12% 0% Optic
Note: As at 31 December 2009 18 Lease Expiry as % of Total Malls NLA
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 and beyond
Long lease expiry profile underpins portfolio stability
Mixture of long-term and short term leases, provides growing & stable distributions
19 Average Rental Rates as at December 2009
ARR Retail Malls Anchor Specialty shops
Bandung Indah Plaza 62,000 263,000
Cibubur Junction 54,000 211,000 Ekalokasari 48,000 150,000 Gajah Mada Plaza 46,000 160,000 Istana Plaza 54,000 196,000 Mal Lippo Cikarang 57,000 172,000 Plaza Semanggi 56,000 162,000 Sun Plaza 38,000 167,000 ARR Retail Malls 50,000 184,000
20 Improving Traffic in LMIR Trust Malls
Q3 Q4 Total YTD
2008 2009 2008 2009 2008 2009 Variance Variance Variance (Million) (Million) (Million) (Million) (Million) (Million)
Car 2.20 2.23 1.12% 2.16 2.20 1.95% 8.37 8.72 4.26%
Motorcycle 1.58 1.63 2.95% 1.55 1.58 2.30% 5.83 6.25 7.06%
Visitor 20.22 23.41 15.79% 20.52 23.09 12.51% 72.40 85.40 17.95%
21 LMIR Trust Growth Strategies
22 Targeted Growth Strategies
Large pipeline from both Sponsor and third parties. AcquisitionAcquisition ROFR over malls from Sponsor, one of which had a soft opening in Dec 2008 pipeline A fragmented and diverse retail market provides further acquisition growth opportunities
Improving macroeconomic fundamentals OrganicOrganic growthgrowth Growing & affluent urban middle income class Active portfolio management and tenant re-mixing / re-positioning strategies
Asset 5 asset enhancements completed in 2009 which translated into additional enhancements revenue of Rp 5.5 billion per annum
23 Access to acquisitions through Sponsor and third parties
25 malls throughout in Indonesia
N
MALUKU SULAWESI PACIFIC OCEAN Grand Palladium Medan
Sun Plaza KALIMANTAN Plaza Medan Fair Binjai Supermall IRIAN JAYA Palembang Square GTC Makassar INDIAN OCEAN City of Tomorrow Mall JAVA Malang Town Square
- Istana Plaza - Bandung Indah Plaza Strata-titled Malls (8 of 10 malls are owned by LK) MALLS IN GREATER JAKARTA LMIRT Malls LK Malls JAVA SEA Third Party Malls
NORTH JAKARTA WEST JAKARTA Pluit Village CENTER OF JAKARTA Lippo Karawaci owns and/or manages Metropolis Town Square Gajah Mada Plaza St. Moritz 25 malls throughout Indonesia The Plaza Semanggi WTC Matahari Kemang Village 940,000 sq m lettable area SOUTH Kramat Jati Indah Plaza JAKARTA EAST Lippo Cikarang Mall JAKARTA 15,695 total units BANTEN PROVINCE Pejaten Village Bekasi Trade Mall WEST JAVA 80% average occupancy rate Tamini Square PROVINCE
Cibubur Junction
Depok Town Square Bellanova Country Mall 24
Eka Lokasari Mall Asset Enhancement – Cibubur Junction (Completed)
Re-configuration of the existing 2nd floor layout to become single corridor area
The interior of the Karaoke Lounge Frontage corridor of the Inul Vizta Occupied spaces along the corridor area New ice cream stall along the corridor
•1,467 sq m created from the existing 1,035 sq m •Actual cost of IDR 1.8 bio & ROI of 54% •Projected annual rental IDR 1.6 bio vs. IDR 635 mil existing •75% (1,100 sq m) of new space already opened
25 Opening of the MDS at Gajah Mada Plaza & Istana Plaza
•On the 11th December 2009, MDS (Matahari Dept Store) celebrated the opening of their new stores in Istana Plaza (“IP”) and Gajah Mada Plaza (“GMP”)
•The Official Grand opening in both malls received great reception and customer traffic has improved significantly compared to the same period in 2008
•Occupancy is now 98.8% and 97.1% at GMP and IP respectively.
26 Sponsor
27 Manager of LMIR Trust: LMIR Trust Management Ltd
Partnership between two leading real estate forces
• Lippo is one of Indonesia’s largest • Leading real estate conglomerates company in Singapore with Asian focus. • Lippo Karawaci (“LK”) 40% is the largest listed 60% property company in 212.1 million units (18.4%) in 141.7 million units • Owns and manages Indonesia by LMIR Trust (13.2%) in LMIR Trust over S$11.8 billion assets, revenue and REIT Manager: of real estate assets net profit. pan Asia.
8 offices across Asia • LK has the most • integrated business to support regional model of all property business. companies in Indonesia’s premier Singapore’s leading real Indonesia. real estate company estate company
• LK rated by 3 rating agencies-B by S&P, B1 by Moody’s and B+ by Fitch.
28 Lippo is One of Indonesia’s Largest Conglomerates
Indonesia Regional presence in China, Macau, Hong Kong, Philippines, Korea, Singapore
Property & Retail Others Retail Others Property Hospitality
Matahari & Hypermart First Media
PT Lippo Karawaci Tbk
Property & Urban Large Scale Hotels & Integrated Retail Malls Healthcare Portfolio Development Hospitality Development Management
29 Summary
30 Conclusion
Based on announced DPU, attractive yield of 9.9%
Share price trading at a substantial discount to NAV
Well-balanced property diversification with no single property accounting for more than 17% of Net Property Income
Portfolio occupancy rate remains higher than industry average
Conservative gearing provides capacity for further yield accretive acquisitions
Access to future acquisitions in a fragmented and diverse retail market
Indonesian economy was one of Asia’s best performing in 2009
Indonesia retail market is likely to benefit from the improved macro-economy
LMIRT is committed to deliver stable results to our unit holders
31 Appendix
32 Quality and strategically located Retail Malls
High Quality Retail Malls… Well complimented by Int’l & local Anchored by premier local retailers.. specialty retailers
Gajah Mada Plaza Cibubur Junction Largest retailer and department store in Indonesia
30 hypermarkets across The Plaza Semanggi Mal Lippo Cikarang Indonesia
4 department stores across Indonesia
Ekalokasari Plaza Bandung Indah Plaza 6 department stores across Indonesia
14 Giant Hypermarkets Istana Plaza Sun Plaza across Indonesia
Indonesia’s largest Cinema Network 33 Retail Spaces Master-leased to Matahari
LMIR Trust’s portfolio includes 7 Retail Spaces with total NLA of 94,070 sqm, master-leased to Matahari for a period of 10+10 years, with fixed rental growth of 8% p.a. for the first 4 years and a revenue sharing formula thereafter
Metropolis Town Mall WTC Matahari Units Depok Town Square Units Java Supermall Units Square Units
NLA : 11,184 sqm NLA : 15,248 sqm NLA : 13,045 sqm NLA : 11,082 sqm
Malang Town Square Units Plaza Madiun Grand Palladium Unit
NLA : 11,065 sqm NLA : 19,029 sqm NLA : 13,417 sqm
5 of the 7 Retail Spaces reside in strata-titled malls built by the Sponsor 34 Lippo-Mapletree Indonesia Retail Trust Management Ltd 78 Shenton Way #05-01,Singapore 079120 Tel: 6410 9138 Fax: 6220 6557 www.lmir-trust.com
For enquiries, please contact: Mr. Shane Hagan Chief Financial Officer Direct: (65) 6410 9139 Email: [email protected]