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LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
30. OPERATING LEASE INCOME COMMITMENTS – AS LESSEE
At the end of reporting year the total of future minimum lease receivables committed under non-cancellable operating
leases are as follows:
Group
2014
2013
$’000
$’000
Not later than one year
95,421
73,861
Later than one year and not later than five years
203,932
143,920
More than five years
123,509
104,783
Rental income for the year (Note 4)
115,096
122,663
The Trust has no operating lease income commitments at the end of the reporting year.
The Group has entered into commercial property leases for retail malls and spaces. The lease rental income terms
are negotiated for an average term of five to ten years for anchor tenants and an average of three to five years for
speciality tenants. These leases are cancellable with conditions and rentals are subject to an escalation clause but the
amount of the rent increase is not to exceed to a certain percentage.
On 18 October 2007, each of the Indonesian subsidiaries that are owners of retail spaces (“Retail Spaces Property
Companies”) (as landlord) and the Master Lessee (as tenant) entered into a Master Lease Agreement, pursuant to
which the retail spaces were leased to the Master Lessee in accordance with the terms and conditions of the Master
Lease Agreements. The term of each of the Master Lease Agreements is for 10 years with an option for the Master
Lessee to renew for a further term of 10 years based on substantially the same terms and conditions, except for
renewal rent. The renewal rent for the further term shall be at the then prevailing market rent, as may be agreed by
the relevant landlord and the Master Lessee in good faith. If there is no agreement by the relevant landlord and the
Master Lessee on such prevailing market rent, the relevant landlord and the Master Lessee may refer the determination
of the prevailing market rent to an independent property valuer or valuers.
Upon the completion of the acquisition of Lippo Mall Kemang, the Group would enter into 3 Master Lease Agreements,
pursuant to which certain retail spaces of Lippo Mall Kemang were leased to the Sponsor Lessees for guaranteed
rental receivable, in accordance with the terms and conditions of the Master Lease Agreements. The Master Lease
Agreements were valid for a period of 3 years with an option for the Sponsor Lessees to renew for a further term of
2 years based on substantially the same terms and conditions.
31. OTHER MATTERS
(i)
Right of First Refusal (“ROFR”)
On 14 August 2007, an agreement was entered into between the Trustee and the Sponsor pursuant to which
the Sponsor granted the Trust, for so long as (a) LMIRT Management Ltd remains the Manager of the Trust; and
(b) the Sponsor and/or any of its related corporations, alone or in aggregate, remains a controlling shareholder
of the Manager; a ROFR over any retail properties located in Indonesia (each such property to be known as a
“Relevant Asset”): (i) which the Sponsor or any of its subsidiaries (each a “Sponsor Entity”) proposes to sell or
transfer (whether such Relevant Asset is wholly-owned or partly-owned by the Sponsor Entity and excluding
any sale of Relevant Asset by a Sponsor Entity to any related corporation of such Sponsor Entity pursuant to
a reconstruction, amalgamation, restructuring, merger or any analogous event) to an unrelated third party; or
(ii) for which a proposed offer for sale or transfer of such Relevant Asset has been made to a Sponsor Entity.
At statements of financial position date, the scope of the ROFR encompasses two Indonesia properties, namely
Kuta Beach Mall and Puri “Paragon City”. Some of these properties are currently under development by the
Sponsor and/or its subsidiaries.
Notes to the Financial Statements
(Cont’d)
31 December 2014
