LIPPO Malls Indonesia Retail Trust (LMIR Trust) on Saturday entered into conditional sale and purchase agreements for the acquisitions of Lippo Plaza Batu and Palembang Icon for the purchase consideration of 265 billion rupiah (S$26.8 million) and 790 billion rupiah respectively.
The total purchase consideration, including professional and other fees and expenses of approximately S$4 million in connection with the acquisitions, is estimated to be approximately S$110.8 million.
Through its wholly owned subsidiary PT Palladium Megah Lestari, LMIR Trust has signed the agreement with PT Sukses Indah Kencana (LPB Vendor) in relation to the acquisition of one "Right to Build" title in Lippo Plaza Batu, a retail mall located in Batu City, Indonesia.
Lippo Plaza Batu is a three-level mall with a net lettable area of 12,324 square metres. There will be an additional 6,500 square metres of net lettable area to be built on the roof level as part of the ongoing asset enhancement works.
Meanwhile, LMIR Trust has entered into the agreements with PT Alamanda Graha Utama and PT Karya Dinamika Sukses (the PICON Vendors) for the acquisition of all the shares of PT Griya Inti Sejahtera Insani, which in turn owns Palembang Icon through its wholly owned subsidiary PICON1 Holdings.
Palembang Icon is a five-level retail mall and a sports centre with a net lettable area of 35,797 square metres, and located in the city of Palembang, South Sumatera, Indonesia.
Both LPB Vendor and the PICON Vendors are indirect subsidiaries of PT Metrolis Propertindo Utama, an Indonesia-incorporated company which is primarily involved in the development and ownership of investment properties.
The acquisitions represent an opportunity for LMIR Trust to acquire income-producing quality properties below their independent valuations, and are in line with the manager's acquisition growth strategy of owning retail and/or retail-related properties to optimise unitholders' returns, as well as providing potential capital appreciation and long-term growth, LMIRT Management, manager of LMIR Trust, said in a statement on Monday morning.
The independent valuation of LPB and PICON as at March 30, 2015, conducted by KJPP Willson dan Rekan, an affiliate of Knight Frank, are 289.9 billion rupiah and 830.9 billion rupiah respectively. 847.1 billion rupiah of the total acquisition cost will be paid in cash on the date of completion of the respective acquisitions, and the remaining 246.8 billion will be satisfied by way of the issuance of consideration units within 20 business days from the date of completion of the respective acquisitions.
The cash portion of the total acquisition cost is expected to be financed via a mixture of internal cash and proceeds from the issuance of bonds.
The counter last closed trading unchanged at 36.5 Singapore cents last Friday.