Lippo Malls Indonesia Retail Trust
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Strictly Confidential Lippo Malls Indonesia Retail Trust Investor Presentation June 2015 Value Propositions • LMIR Trust is guided by the Strength vision to create value that will stand the test of time. • LMIR Trust continues to bridge the global investment Connectivity community with the manifold value-creation opportunities in Indonesia. • LMIR Trust seeks more opportunities to invest in growth, Opportunity through strategic acquisition and portfolio expansion and diversification. 1 Attractive Indonesian Retail Sector High forecast retail growth coupled with low rental rates & retail space per capita imply huge upside potential for Indonesian retail landlords Indonesia – GDP and Net Income Per Capita Projection One of the fastest retail sales growth in the region GDP at PPP Per Capita (USD/annum) 20000 Retail Sales % CAGR (2010 – 2014) 15291 13140 15000 11345 9592 10000 5000 0 2013 2015 2017 2019 Net Income Per Capita (USD/annum) 6000.0 4744.2 3750.9 4000.0 3084.6 3116.8 2000.0 0.0 2013 2015 2017 2019 Source: Business Monitor International 2015 Source: CEIC Database 2015 Indonesia’s major cities are relatively ‘under-malled’ Retail rental rates in Jakarta is one of the lowest in the region Retail Space Per Capita (SQFT) Retail Rental Rates (USD psm/annum) 10.00 9.23 7.60 8.00 6.88 6.00 4.96 5.29 3.73 4.00 2.00 0.00 Surabaya Jakarta Manila Klang Singapore Bangkok Valley Source: CBRE, Colliers 2014-2015,Countries’ Statistics Departments Source: JLL Retail Index Report Q12015, Cushman & Wakefield Research 2 Attractive Indonesian Retail Fundamentals A rapidly growing working-age group and a positive urbanization trend, supported by a steady increase in household income, serve as a solid foundation for retail businesses in major cities in Indonesia. Population Data (in millions) Households ('000) in Income Group 200 180 160 153.2 2010 140 134.6 120 121.3 100 2015 179.2 80 158.3 167.7 60 40 72.5 72.1 69.86 2020 20 12.2 13.5 16.17 0 2010 2014 2019 0 20,000 40,000 60,000 80,000 100,000 Population aged 0-14 Population aged 15-64 > US$15,000 p.a. > US$10,000 p.a. Population aged 65+ Urban population > US$5,000 p.a. > US$3,000 p.a. Source: The Economist Intelligence Unit 2015 3 Portfolio Highlights 4 Strategically Located Portfolio LMIRT has a diversified portfolio of 17 retail malls and 7 retail spaces across Indonesia . Diversified portfolio across Metropolis Town Square Pluit Village Indonesia North West Jakarta Mall WTC Matahari Central Gajah Mada Plaza (Total NLA: 763,423 sqm) JakartaJakarta – 10 malls across Pejaten Village The Plaza Semanggi Greater Jakarta Lippo Mall South East Kemang Jakarta Binjai Supermall Jakarta Mal Lippo Cikarang – 2 malls in Bandung Plaza Medan Fair Depok Town Square Kramat Jati Indah Plaza Sun Plaza Grand Palladium Medan Cibubur Tamini Square – 3 malls in Medan Medan Junction Ekalokasari Plaza – 2 malls in Palembang – 7 retail spaces Kalimantan Balikpapan Sumatra Pontianak Palembang Sulawesi Palembang Square Palembang Square IrianJaya Extension Java Supermall Jakarta Semarang Istana Plaza Java Surabaya Bandung Malang Plaza Madiun Malang Town Square Bandung Indah Plaza Retail Malls Retail Spaces Lippo Mall Kemang Source: Company data 5 Portfolio Overview LMIRT is well-positioned to leverage on the strong Indonesian macro outlook and buoyant retail sector . Portfolio valuation of S$ 1.84bn1 • 94.2% occupancy vs 84.2% Industry average 2 . Total NLA of 763,423 sqm 3 Portfolio Key Metrics No Malls NLA (sqm) Valuation (S$M) 1 Occupancy Rate (%) 1 Bandung Indah Plaza 30,288 85.5 99.6% 2 Cibubur Junction 34,494 52.5 98.4% 3 Ekalokasari Plaza 16,728 43.6 94.4% 4 Gajah Mada Plaza 36,479 80.3 78.0% 5 Istana Plaza 26,857 78 99.8% 6 Mal Lippo Cikarang 30,252 60.3 99.7% 7 Plaza Medan Fair 56,021 121.7 98.0% 8 Plaza Semanggi 64,217 143.2 89.8% 9 Pluit Village 87,394 139.2 83.7% 10 Sun Plaza 64,339 179.3 97.6% 11 Binjai Super Mall 23,332 28.4 90.8% 12 Lippo Kramat Jati Indah 32,433 61.2 86.6% 13 Pejaten Village 42,166 102.2 99.3% 14 Palembang Square 31,639 68.4 98.0% 15 Palembang Square Ext 17,392 27.3 99.8% 16 Tamini Square 17,475 25.2 100.0% 17 Lippo Mall Kemang 57,847 388.4 93.5% A Mall Portfolio 669,353 1684.7 93.4% B Retail Spaces 94,070 156.3 100.0% A + B Total Portfolio 763,423 1841 94.2% Industry Average 84.2% Notes: 1. Based on valuation by Rengganis, Wilson , Hendra and Winarta at 31 Dec 2014 in IDR and converted to SGD using the closing rate of 9,373.9 IDR/SGD as at 31 Dec 2014. 2. Colliers Market Report 4Q 2014 Retail (average occupancy of Jakarta and Greater Jakarta areas) 3. As at 31 March 2015 6 Portfolio Summary (As of Q1 2015) Trade Sectors Breakdown by Rental Income1 Trade Sectors Breakdown by NLA1 % of Rental S/N Trade Sector S/N Trade Sector % of NLA Income 1 Food and Beverage 17.30% 1 Department Store 17.20% 2 Fashion 15.70% 2 Supermarket/Hypermarket 15.70% 3 Department Store 12.80% 3 Other 10.50% 4 Supermarket/Hypermarket 10% 4 Food and Beverage 10.40% 5 Others 8.40% 5 Fashion 8.80% Top 5 Sectors 64.20% Top 5 Sectors 62.60% Notes: 1. As at 31 march 2015, excluding retail spaces 7 Top 10 Tenants By Gross Rental Income As at 31 March 2015, includes retail space GIANT SUPERMARKET 0.5% ACE HARDWARE 0.5% ELECTRONIC SOLUTION 0.5% CINEMA 21 0.5% FITNESS FIRST 0.5% SOLARIA 0.5% GRAMEDIA 0.6% CARREFOUR 3.4% HYPERMART 6.6% MATAHARI DEPARTMENT STORE 9.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% . Top 10 tenants contribute approximately 23% of LMIRT Retail Mall Portfolio’s Gross Rental Income 8 Rental Reversion Trend (as of Q1 2015) 50,000 75.0% 45,628 45,000 65.0% 40,000 55.0% 35,000 30,606 45.0% 30,000 26,542 24,764 25,000 22,072 35.0% 16,455 19,039 20,000 17,650 16,238 25.0% 27.1% 15,168 16,094 13,598 25.7% 15,000 9,603 11,970 10,601 11,257 15.0% 10,117 9,335 10,000 16.1% 6,290 15.5% 12.4% 10.8% 11.1% 11.6% 10.8% 10.0% 9.0% 9.4% 8.9% 9.4% 10.1% 9.5% 5.0% 5,000 8.7% 8.0% 5.0% 0 -5.0% 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 Renewal & New Leases NLA Rental Reversion Rate Source: Company data 9 Financial Performance 10 LMIRT – Funding Milestones Dec 2011: Dec 2014: Completed rights Nov 2013: Completed Nov2007: issue of 1.09 billion Completed issuance of LMIRT was new units to raise ~ SGD100m 236m new units officially listed SGD337m in gross Private to raise on the SGX proceeds (165% Placement ~SGD85m in subscription rate) gross proceeds 2007 2011 2012 2013 2014 2015 Dec 2011: July 2012: Sep 2011: Draw down of Nov 2012: Completed Dec 2014: Secured SGD 147.5m Completed Oct 2013: Jan 2014: issue of Draw down of SGD190m new loan issue of Completed issue Repayment of SGD200m 3 yr SGD 155m loan facility (including SGD75m 5 yr of SGD150m 3 yr the SGD147.5m and SGD50m 5 secured bank from 4 successful unsecured unsecured bond term loan yr unsecured loan banks refinancing of bond bonds SGD125m loan) Equity Capital Debt Capital 11 LMIRT – Growth Milestones Value of AUM (IDR bn) 18,000 16,000 3,641 14,000 2,749 12,000 2,878 2,933 LMK 10,000 2,653 PS, PSX, Tamini, KJI, PJV, BSM 2,769 2,507 2,446 PV and PMF 8,000 1,470 1,613 1,680 SUN Plaza 1,268 1,371 1,175 6,000 1,083 IPO Malls 4,000 6,897 5,902 6,368 6,527 6,575 6,558 4,860 5,320 2,000 - 2007 2008 2009 2010 2011 2012 2013 2014 Assets Under Management No of properties 2008 2009 2010 2011 2012 2013 2014 Beginning of the year 14 15 15 15 17 23 23 End of the year 15 15 15 17 23 23 24 12 Strong NPI Growth and Financial Position LMIRT has demonstrated robust growth and sustainable profit margins Historical Gross Revenue vs. NPI 180,000 152,599 150,374 160,000 136,985 136,108 140,000 129,370 116,080 120,000 101,761 99,583 101,734 100,000 85,758 71,443 Gross Revenue (SGD'000) 80,000 71,777 (SGD million) (SGD 61,278 65,931 60,000 NPI After Tax (SGD'000) 40,000 20,000 - Period from 2009 2010 2011 2012 2013 2014 IPO to 2008 Debt and Gearing Cost of Debt and DPU Yield 700 120% 12 Due to issuance of 100% 600 SGD325m bonds for 100% 10 11 9.2 500 acquisitions 74% 8.4 80% 8 8.1 68% 68% 6 7.8 400 55% 7.6 60% 6 6.7 300 622.5 630 6.1 5.6 5.1 5.13 472.5 475 40% 4 200 100 20% 2 125 147.5 0 0% 0 2010 2011 2012 2013 2014 Q1 2015 2010 2011 2012 2013 2014 Q1 2015 Debt Unencumbered assets % Average cost of debts DPU Yield Source: Company announcement 13 Q1 2015 Financial Results – P&L (in Rp mn) 1Q 2015 1Q 2014 Variance (%) (IDR million) (IDR million) Gross Rent 324,554 258,568 25.5% Rental Guarantee Income - 3,678 NA Other Income 6,854 7,189 -4.7% Net Parking Income 47,147 23,873 97.5% Rental of electrical, mechanical and mall operating equipment 8,819 11,200 -21.3% Total revenue 387,373 304,508 27.2% Property Management Fee (8,969) (6,994) -28.2% Property Management Expenses (11,496) (9,672) -18.9% (20,465) (16,666) -22.8% Net Property Income 366,908 287,842 27.5% 14 Q1 2015 Financial Results – P&L (in S$ mn) 1Q 2015 1Q 2014 Variance (%) (S$'000) (S$'000) Gross Rent 34,521 27,911 23.7% Rental Guarantee Income - 397 NA Other Income 729 776 -6.1% Net Parking Income 5,015 2,577 94.6% Rental of electrical, mechanical and mall operating equipment 938 1,209 -22.4% Total revenue 41,203 32,870 25.4% Property Management Fee (954) (755) -26.4% Property Management Expenses (1,223) (1,044) -17.1% (2,177) (1,799) -21.0% Net Property Income 39,026 31,071 25.6% Distributable Income 21,501 16,741 28.4% Distributation Per Units (cents) 1 0.79 0.68 16.2% 2 Annualized Distribution Yield (%) 9.2% Notes: 1.