NOTES TO THE FINANCIAL STATEMENTS
(CONT’D)
31 DECEMBER 2015
30.
OPERATING LEASE INCOME COMMITMENTS – AS LESSOR
At the end of reporting year the total future minimum lease receivables committed under non-cancellable
operating leases are as follows:
Group
2015
2014
$’000
$’000
Not later than one year
106,931
95,421
Later than one year and not later than five years
216,835
203,932
More than five years
154,633
123,509
Rental income for the year (Note 4)
141,347
115,096
The Trust has no operating lease payment 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 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 entered 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.
Upon completion of the acquisition of Lippo Plaza Batu, the Group entered into 4 Master Lease Agreements,
pursuant to which casual leasing, car park, certain specialty retail spaces and the rooftop space of Lippo Plaza
Batu were leased to the Vendor Lessees for guaranteed rental receivables, in accordance with the terms and
conditions of the Master Lease Agreements. The Master Lease Agreements are valid for a period of 3 years with
no option to renew.
Upon completion of the acquisition of Palembang Icon, the Group entered into 5 Master Lease Agreements,
pursuant to which casual leasing, car park, a major retail unit space, certain specialty retail spaces and a Sports
Centre of Palembang Icon were leased to the Vendor Lessees for guaranteed rental receivables, in accordance
with the terms and conditions of the Master Lease Agreements. The Master Lease Agreements are valid for a
period of 3 years with no option to renew. The Master Lease Agreement for the Sports Centre will run for the
remaining period of the BOT agreement which expires on 30 April 2040.
ANNUAL REPORT 2015
133
