Singapore-based Lippo Malls Indonesia Retail Trust (LMIRT) has filed a follow-on equity offering with a plan to raise S$280 million. The proceeds from the rights issue will go towards financing the acquisition of the Lippo Mall Puri in Jakarta, which the company announced last week.
The trust will issue just under 4.7 billion rights units priced at S$0.06 each, offered to existing unitholders at 160 units per 100 units currently held in the trust. The S$0.06 price is at a discount of 47.8 percent to the closing price of S$0.115 on 17th September.
The total acquisition cost of the mall is expected to be in the region of $391 million payable in cash, according to a presentation released by LMIRT. The trust plans to top up the proceeds of the raise with around S$120 million in debt.
The mall is currently owned by a wholly-owned subsidiary of Lippo Karawaci, LMIRT’s sponsor. LMIRT sees the deal as an opportunity to acquire a strategic and iconic retail mall within a premium integrated development located within West Jakarta, an area it sees as having favourable demand and supply dynamics.
The property is located in the Puri Indah Central Business District and is one of the most well-known retail malls in West Jakarta. As of 2019, the property was welcoming 17 million visitors per year and had 333 tenants spread across a range of retail, dining, entertainment and leisure options.
COVID-19 saw visitor numbers severely impacted by the temporary closure of the property between 27th March and 15th June 2020, and as of 11th September shopper traffic had only recovered to approximately 45% of the levels seen prior to the pandemic outbreak.
However despite the continued imposition of social distancing restrictions and the continued closure of leisure-related retailers, LMIRT believes the mall will continue to maintain occupancy levels and draw tenants as the situation starts to improve and businesses recover.