LMIRT inks 254 billion rupiah deal to continue operating Jakarta mall till 2045
LIPPO Malls Indonesia Retail Trust (LMIRT) has inked a cooperation agreement valued at 254 billion rupiah (S$21.6 million) for the real estate investment trust’s (Reit) subsidiary to extend its right to operate Cibubur Junction until Jul 29, 2045.
Located in East Jakarta, Indonesia, Cibubur Junction is a five-storey shopping centre with a basement level and a car park.
As at end-2023, the asset had an indicative market value of about 65.7 billion rupiah. This value stands at 416.5 billion rupiah after factoring in the extension of the cooperation agreement, said the manager on Wednesday (Jan 31).
LMIRT’s manager on Jan 4, 2024, reported a 7.7 per cent decline in the Reit’s indicative portfolio value as at end-2023 compared with the carrying value at the end of the first nine months of FY2023.
It estimated that the decline would have been 5.5 per cent had this new indicative market value, inclusive of the cooperation agreement, taken effect before the end of the financial year ended Dec 31, 2023.
The total value of its new cooperation agreement includes an aggregate consideration of 80 billion rupiah to be paid in cash, along with a minimum of 168 billion rupiah for renovation expenditures to be conducted and funded by the Reit during its management period.
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Another six billion rupiah in value has been set aside to lease a dedicated area within Cibubur Junction for public services.
As LMIRT’s sponsor Lippo Karawaci helped to obtain the extension for the Reit – a process which commenced in January 2020 – it will also pay the real estate group a fee of about 3.1 billion rupiah.
Out of the 10 assets under LMIRT on an agreement-based scheme, two are expiring within the next five years.
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LMIRT’s manager said it intends to process the extension or renewal of such tenures as they approach their expiry dates, subject to “acceptable commercial terms” and approvals from the owners of these properties.
Units of LMIRT closed at S$0.017, up 6.3 per cent or S$0.001, on Wednesday, after the announcement.
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