Troubled retail REIT Lippo Malls Indonesia Retail Trust (LMIRT) has received the nod to continue operations at its asset known as Cibubur Junction.

The co-operation agreement was reached with Jakarta’s land-use regulator, Perusahaan Umum Daerah Pembangunan Sarana Jaya, said the REIT on 31 January.

Under the agreement, Cibubur Junction’s right to operate has been extended to July 2045.

Cibubur Junction is a shopping centre with five levels, a partial roof top level, one basement level and a carpark.

It is located strategically in the middle of Cibubur, which is one of the most affluent and upmarket residential areas in Jakarta.

The mall is situated 5 kilometres south of Jakarta’s Jagorawi toll road and is easily accessible and visible from the main road.

Total value of the agreement is approximately INR254 billion (SGD21.6 million).

The REIT’s sponsor PT Lippo Karawaci Tbk has provided assistance to LMIRT in the process of obtaining the extension and will receive SGD0.26 million from the REIT.

LMIRT has 10 assets that are based on the agreement-based scheme, two of which are expiring within the next five years.

The REIT has indicated an intent to process the extension or renewal of such tenures as they approach their respective expiry dates, subject to acceptable commercial terms and approvals from the owners of these properties.

LMIRT was last done on the Singapore Exchange at SGD0.017 with nil distributions given the suspension of payouts.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.