Lippo-Mapletree books better-than-expected H1 earnings

Lippo-Mapletree Indonesia Retail Trust (LMIR Trust) has posted first half earnings of S$39.3 million, 3 per cent higher than its own forecast. Revenue came in at S$53.8 million, which also exceeded projections.

Lippo-Mapletree said it is on track to pay out 5.84 cents per unit for the whole year, as earlier forecast. The trust said it is less affected by inflationary pressures because it targets the middle and upper-income markets.

Viven Sitiabudi, CEO of LMIR Trust, said: “When you are visiting some of the malls in Indonesia, you will not really feel that pressure. Our target market is middle to upper income… the people that will be really affected (by inflation) are more at the lower level.”

According to the Retailers Association in Indonesia, retailers continue to see double-digit growth and Lippo-Mapletree has noted that its rentals are still very stable.

“In our portfolio, we are still experiencing an increase of rental as per the projection, which is around 10 per cent per annum on reversion. So if it’s a three-year rent, we’re still able to command about a 30 per cent increase in the rent, so that’s still in line with what we’re saying in our prospectus,” Ms Sitiabudi said.

For the second quarter alone, earnings for LMIR Trust came in at S$15.9 million, 3 per cent higher than its forecast. This works out to a distribution of 1.50 cents per unit.

Revenue for the three months ended June was 15 per cent higher than projected, at S$24.5 million.

Lippo-Mapletree is starting to see contributions from its new acquisition, Sun Plaza, which has increased its IPO net lettable area by 20 per cent and has also diversified its property income.

Ms Sitiabudi said: “This is one of the best malls in Medan. The anchor tenant is very strong… we’ve identified certain areas that we can easily turn into a net leasable area to drive the rent up.

“And while Sogo has got a long lease, we’ve also been looking at their traffic and the sales in that particular area, and we believe that we will be able to talk to them and achieve a win-win situation.”

Lippo-Mapletree said the fundamentals of Indonesia’s retail sector remains strong and it is looking at acquiring more malls moving forward.

The trust is the first REIT that provides exposure to Indonesia’s retail sector. Its sponsor, Lippo Karawaci, is still continuously developing malls.

Source : Channel NewsAsia – 29 Jul 2008

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