Lippo Malls Achieves 19.2% Rise in DPU

lippo malls trust Lippo Malls Indonesia Retail Trust (SGX: D5IU), or LMIRT, saw its gross revenue increase 13.6% to S$39.0 million in the third quarter of 2013 (3Q 2013) as compared to 3Q 2012.

The revenue increase was mainly because of “the contributions from the six new malls acquired in 4Q 2012 and the positive rental reversions within the existing malls, despite the depreciation of IDR in the past quarter”.

The net property income, which was at S$37.1 million and distributable income, which was at S$19.1 million, rose 12.2% and 20.7% respectively in 3Q 2013.

Shareholders should be cheering the news that distribution per unit (DPU) shot up 19.2% to 0.87 Singapore cents in 3Q 2013 from 0.73 Singapore cents in 3Q 2012.

As of 30th September 2013, the total outstanding debt was S$472.5 million. The gearing level was at 28.2%. The weighted average maturity of debt facilities was around 2.0 years. No refinancing will be required until June 2014. The occupancy rate stood at 95.1%. The net asset value was at S$0.4528.

LMIRT’s sponsor, Lippo Karawaci (LK), has provided LMIRT with a “right of first refusal over its portfolio of 15 malls to be built across Indonesia in the next three years”. That means that the sponsor has presented the opportunity to LMIRT to buy the malls before anyone else can.

LK, one of the largest listed property developers and mall operators in Indonesia, has links to other companies listed in the Singapore Exchange as well. LK is also the sponsor of First REIT (SGX: AW9U), Singapore’s first healthcare real estate investment trust. Another company, Overseas Union Enterprise Limited (SGX: LJ3), which owns brand-name hotels such as Mandarin Orchard Singapore, Crowne Plaza Changi Airport Singapore and Marina Mandarin Singapore, among others, is linked to Lippo Group, the parent of Lippo Karawaci. OUE is 68% owned by Lippo Limited, part of the Lippo Group.

The shares of LMIRT closed at S$0.445 on Wednesday. The price-to-book ratio is at 0.98 and the dividend yield is at 7.7%, taking into account the latest declared DPU and the DPU for the previous three quarters.

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