Warburg Pincus-backed NWP buys 5 Lippo malls for US$124m

[SINGAPORE] NWP Retail, a shopping mall developer backed by Warburg Pincus LLC, will spend US$123.5 million buying five Lippo shopping malls in Indonesia.

Two shopping malls will be acquired from the Indonesian units of Singapore-listed Lippo Malls Indonesia Retail Trust (LMIRT) for US$92 million while another three will be bought for US$31.5 million from entities owned by PT Multipolar.

The acquisitions represent "a milestone in NWP Retail's rapid expansion", CEO Timothy Daly said in an emailed statement Tuesday. "It will strengthen the company's presence across key markets in tier 1 and tier 2 cities in Indonesia."

NWP Retail, a joint venture between Warburg Pincus and PT City Retail Developments, is seeking to capitalise on Indonesia's burgeoning middle class, who as they accumulate wealth are spending more on consumer goods than ever before. The South-east Asian nation's economy is expected to expand about 5 per cent in 2020, faster than neighboring Singapore and Malaysia.

Indonesia "lacks an adequate supply of modern and investment-grade retail stock, as well as national-level developers focused on producing such assets", according to NWP Retail's website. "At the same time, tenants at all levels continue to expand throughout the country, which leads to a gap in adequate retail supply."

NWP Retail was established in 2015 and has a portfolio of over 40 projects spanning the islands of Java, Sumatra and Sulawesi.

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Two of the malls to be acquired - Pejaten Village in Jakarta and Binjai Supermall in Binjai, a satellite city of Medan - are owned by Lippo Malls Indonesia Retail Trust (LMIRT). It has 30 properties across Indonesia worth around S$1.8 billion, according to its website.

The remaining three shopping centers are owned by subsidiaries under Multipolar. They are Central Plaza in Bandar Lampung, Duta Plaza in Bali, and Cimanggis Square in Depok, a city in the greater Jakarta area.

Based on its 2018 annual report, Multipolar's biggest shareholder is PT Inti Anugerah Pratama, which owns a 78 per cent stake. Inti Anugerah Pratama in turn is a shareholder of PT Lippo Karawaci, the property arm of Indonesian conglomerate Lippo Group.

Daly said NWP Retail will continue to "seek high-potential, attractively priced retail acquisitions and development opportunities across key markets in Indonesia."

The group raised almost US$200 million in February from the Korean Teachers' Credit Union, Citic Securities One-Belt-One-Road Fund and Warburg Pincus.

Warburg Pincus has also been investing in Asia's expanding property sector, leading a consortium that bought a 20 per cent stake in Vietnam mall operator Vincom Retail JSC in 2013. Vincom Retail was Vietnam's biggest initial public offering in 2017, raising US$700 million. That record was broken a year later when Vietnam Technological & Commercial Joint Stock Bank raised US$922 million.

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