Analysis: Lippo Malls Indonesia Retail Trust faces questions over debt

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Lippo Malls Indonesia Retail Trust announced on 13 November that it has obtained an SGD80 million unsecured uncommitted revolving credit facility from CIMB Bank Berhad through its trustee, HSBC Institutional Trust Services.

According to the REIT, the funds will be used towards future acquisitions, refinancing of maturing debts, as well as for working capital requirements.

“We are pleased to have obtained this SGD80 million facility from CIMB which is in line with our medium term strategy to unencumber all our assets, said Chan Lie Leng, CEO of the REIT’s manager.

“The support from CIMB manifests its confidence in [the REIT]and we value its continued support”, she added.

Announcement of this facility comes in the wake of revelations in October 2017 that the REIT is planning to acquire two malls in Indonesia, which are namely Lippo Plaza Jogja and Kediri Town Square, from sponsor Lippo Karawaci for SGD98.1 million.

The completion of these acquisitions will boost the REIT’s portfolio to 30 properties and an asset size of over SGD2 billion.

However investors looking to acquire units of Lippo Malls Indonesia Retail Trust may need to be aware of two credit-related factors that loom on the horizon.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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