Lippo Malls Indonesia Retail Trust (LMIRT) has, through its trustee Perpetual (Asia), entered into a master property management agreement with its manager and PT Lippo Malls Indonesia (LMI) to appoint LMI as property manager of the REIT’s properties in Indonesia.
The agreement is for a term of 22 months starting from Nov 14. LMI is the same property manager for LMIRT’s properties under the current agreement, which will expire on Nov 13.
The entry into the new agreement will ensure continuity in the management of the retail malls, says LMIRT’s manager. The property manager has also displayed a track record of keeping the occupancy of the properties at healthy and stable levels and has maintained consistently high levels of tenant retention rates. The continued appointment will benefit LMIRT, the manager explains.
Under the new master agreement, LMI will be entitled to 2.0% per annum of the gross revenue of the REIT’s malls except Java Supermall Units.
It will also be entitled to 2.0% per annum of the net property income (NPI) for the REIT’s malls after accounting for the 2.0% fee of the gross revenue of the relevant retail mall.
Finally, LMI will be entitled to 0.5% per annum of the NPI for the relevant retail mall in lieu of leasing commissions that LMI is otherwise entitled to.
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As Java Supermall Units will not require building management, maintenance, other property related services, information technology support and project management services, LMI is entitled to a different set of payments such as 2.0% per annum of the property’s NPI and 0.5% per annum of the property’s NPI in lieu of leasing commissions.
Under the new master agreement, LMI’s project management fees will remain unchanged. They are: 3.0% of the construction costs where costs exceed $100,000 but not $5.0 million or the equivalent value in the relevant foreign currency.
The fees also include 2.0% of the construction costs exceed $5.0 million but do not cross the $40.0 million mark, as well as a mutually-agreed fee should costs exceed $40.0 million.
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There will be no other material changes in the new agreement.
The agreement constitutes as an interested person transaction under the Singapore Exchange S68 ’s (SGX) listing rules as LMIRT’s sponsor, PT Lippo Karawaci Tbk, has a deemed interest of 47.45% of the units in LMIRT and 100% shares in the REIT’s manager.
Units in LMIRT closed 0.3 cents lower or 13.04% down at 2 cents on Nov 10.
