SINGAPORE (Oct 16): Lippo Malls Indonesia Retail Trust (LMIRT) is acquiring two malls from its sponsor for $110 million.

In the first acquisiton, LMIRT and First Real Estate Investment Trust (First REIT) are jointly acquiring an integrated development in Jogjakarta for a consideration of Rp 834.6 billion ($88.1 million).

The Jogyakarta property comprises a hospital component known as Siloam Hospitals Yogyakarta (SHYG) and a retail mall component known as Lippo Plaza Jogjakarta (LPJ).

The considerations attributable to SHYG and LPJ are $27 million and $61.1 million respectively. Including value-added tax and acquisition fees to be paid in LMIRT units, the cost attributable to LMIRT is $68.4 million.

Under the terms of the acquisition and JV, First REIT will only have exposure to all the economic rights and obligations in respect of the hospital while LMIR Trust will only have exposure to all the economic rights and obligations in respect to the mall.

“The city has attracted large numbers of students from all over Indonesia. Jogjakarta also attracts plenty of foreign visitors, majority of whom are foreign students that usually stay to learn Bahasa or Javanese culture,” says LMIRT’s manager.

“LPJ is one of the newest malls in Jogjakarta and adjoins SHYG. LPJ is expected to serve the people of Yogyakarta and those from the surrounding areas,” it adds.

Meanwhile, LMIRT has also entered into an agreement to acquire Kediri Town Square, a two-storey retail mall, in East Java.

“KTS is a lifestyle mall strategically located in Kediri city, East Java, which is well-connected to other parts of East Java and has direct trains to major cities such as Surabaya,” says LMIRT’s manager.

The consideration for the acquisition is Rp 345 billion ($37 million) but the total acquisition cost is expected to reach $41.1 million after VAT and acquisition fees which will be paid in units of the trust.

OCBC says the plan to purchase 2 malls should slightly add to LMIRT's bottom line.

Lippo Malls, which will finance via bond sales or other debt, will also see its portfolio expand to 30 properties worth about $2.7 billion, the bank adds.

Units of LMIRT are trading at 43.5 cents.