Shares & Derivatives
Lippo-Mapletree Indonesia Retail Trust IPO.
By Kleer  •  November 15, 2007
By: Kleer Closing date of application: 15 November 2007 Commencement of trading: 19 November 2007 Lippo-Mapletree Indonesia Retail Trust (LMIR) is established with the principal objective of investing in a diversified portfolio of income producing real estate in Indonesia that is used for retail or retail related purposes. It will have an initial portfolio of 7 retail mall properties and 7 retail spaces located in other retail malls currently valued at approx. S$1 billion, with an occupancy rate of 91.6%. The properties consist of:
  1. Gaja Madah Plaza, Cibubur Junction, and The Plaza Semanggi located in Jakarta.
  2. Mall Lippo Cikarang and Ekalokasari Plaza located in Greater Jakarta.
  3. Bandung Indah Plaza and Istana Plaza located in Bandung.
Sponsor Background: LMIR is indirectly 60% owned by its sponsor, The Lippo Group, and 40% owned by The Mapletree Group. The Lippo Group is an internationally recognised corporation and is the largest listed property company in Indonesia by market capitalisation. It has a recognised track record and dominant position within the retail and retail property industry in Indonesia, with the ability to identify and enhance under-valued retail properties and leverage its extensive retail network. The Mapletree Group is a leading real estate company in Singapore, and has an asset base of approximately S$4.5 billion (as at 30 June 2007) comprising office, logistics, industrial, residential and retail/lifestyle properties. Aftering its listing gthe Lippo Group and Mapletree Group will each own 21.7% and 12% of LMIR. Expansion plans: Lippo has granted LMIR first right of refusal over any indonesian retail properties so long as it remains the manager of the trust. At present, there are 5 retail malls currently under development that fall under this agreement. LMIR has also entered into non-binding MOUs to acquire 3 other malls by end 2008. Key Risk Factor: The first Indonesian REIT to list on SGX was First REIT, and its price has remained somewhat lacklustre due to investor concerns over the unstable political, social, and natural conditions in Indonesia. Fears of a potential riot or earthquake affecting its retail malls are unfortunately of a higher possibility than in most other parts of the world. Financial figures Intended IPO price range: $0.80 No. of shares available for public offer: 20m No. of shares available for cornerstone investors: 127.3m No. of shares available for placement offer: approx. 625.5m Total post invitation share capital: approx. 848.3mm Projected Yield & Dividend distribution policy: The projected yield is 5.84% for FY2008, and 6.27% for FY2009. Dividends will be paid on a quarterly basis, and the first dividend will be paid on or before 30 May 2008. Summary: The recently listed Saizen REIT opened -15% below its IPO price and has remained at that level since, thus rubbishing the belief that ALL IPOs can be flipped for a quick buck. Hence, I would advise punters and speculators to stay away from this listing, and to only apply if you want this to form a long term holding in a REIT portfolio. Even then, I don't think the yield is particularly fantastic and would prefer to wait for a better price. Probability of getting allotted for the IPO - GOOD I have only included the key points of the prospectus. Certain information have been omitted in order to keep my write-up short, but you can find the entire prospectus here.
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By Kleer
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