INDONESIAN conglomerate Lippo Group plans to list two or three real estate investment trusts (Reits) worth about $4US billion ($5S.8 billion) in Singapore within the next two to three years, its president Stephen Riady said yesterday.
He spoke after the launch of Lippo’s Lippo-Mapletree Indonesia Retail Trust (LMIR Trust), the second the group has sponsored after First Reit, which has a portfolio of hospital assets. Mr Riady was upbeat, saying: ‘I believe Asia is in a long-term bull market, and this will be for at least the next 10 years’.
He said that the new Reits would most likely centre on hotels, offices and shopping malls. It was unlikely Lippo would list a residential Reit as earnings from such assets would be more volatile.
Mr Riady said Lippo had not been affected by the scrapping of the property deferred payment scheme. None of its three residential projects to date - including Newton One - had offered the scheme, yet all had sold well.
Next month, Lippo’s Sentosa Cove development, Marina Collection, will be launched. Buyers will be given free membership in the One Degree 15 club.
The newly launched LMIR Trust, priced at the lower end of the indicative range at 80 cents, will raise around $516 million.
Recent market turbulence has seen Japan’s Asia Pacific Land Trust’s issue being postponed and Saizen Reit’s price falling 14 per cent on its debut last Friday.
Still, LMIR Trust is upbeat, saying it has secured global and local institutional investors. The projected yield is about 7.3 per cent for next year - higher than the average of 5.1 per cent for other Reits in Singapore - and the distribution per unit is 5.84 cents.
The trust’s seven malls are in Greater Jakarta and in nearby Bandung. The tenants include Indonesian department store Matahari and Giant supermarket.
Ms Viven Sitiabudi, the chief executive of the trust manager, said investors are keen on Indonesia’s retail sector ‘given the country’s robust economic fundamentals, underpinned by a growing and affluent urban middle-class population’.
LMIR Trust’s offer will close on Thursday and trading will start next Monday.
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