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NWP Retail Buys Lippo Shopping Malls for $124 Million

Faris Mokhtar and Joyce Koh

(Bloomberg) -- NWP Retail, a shopping mall developer backed by Warburg Pincus LLC, will spend $123.5 million buying five Lippo shopping malls in Indonesia.

Two shopping malls will be acquired from the Indonesian units of Singapore-listed Lippo Malls Indonesia Retail Trust for $92 million while another three will be bought for $31.5 million from entities owned by PT Multipolar.

The acquisitions represent “a milestone in NWP Retail’s rapid expansion,” CEO Timothy Daly said in an emailed statement Tuesday. “It will strengthen the company’s presence across key markets in tier 1 and tier 2 cities in Indonesia.”

NWP Retail, a joint venture between Warburg Pincus and PT City Retail Developments, is seeking to capitalize on Indonesia’s burgeoning middle class, who as they accumulate wealth are spending more on consumer goods than ever before. The Southeast Asian nation’s economy is expected to expand about 5% in 2020, faster than neighboring Singapore and Malaysia.

Indonesia “lacks an adequate supply of modern and investment-grade retail stock, as well as national-level developers focused on producing such assets,” according to NWP Retail’s website. “At the same time, tenants at all levels continue to expand throughout the country, which leads to a gap in adequate retail supply.”

NWP Retail was established in 2015 and has a portfolio of over 40 projects spanning the islands of Java, Sumatra and Sulawesi.

February Raising

Two of the malls to be acquired -- Pejaten Village in Jakarta and Binjai Supermall in Binjai, a satellite city of Medan -- are owned by Lippo Malls Indonesia Retail Trust. It has 30 properties across Indonesia worth around S$1.8 billion ($1.3 billion), according to its website.

The remaining three shopping centers are owned by subsidiaries under Multipolar. They are Central Plaza in Bandar Lampung, Duta Plaza in Bali, and Cimanggis Square in Depok, a city in the greater Jakarta area.

Based on its 2018 annual report, Multipolar’s biggest shareholder is PT Inti Anugerah Pratama, which owns a 78% stake. Inti Anugerah Pratama is also a shareholder of PT Lippo Karawaci, the property arm of Indonesian conglomerate Lippo Group.

Daly said NWP Retail will continue to “seek high-potential, attractively priced retail acquisitions and development opportunities across key markets in Indonesia.”

The group raised almost $200 million in February from the Korean Teachers’ Credit Union, Citic Securities One-Belt-One-Road Fund and Warburg Pincus.

Warburg Pincus has also been investing in Asia’s expanding property sector, leading a consortium that bought a 20% stake in Vietnam mall operator Vincom Retail JSC in 2013. Vincom Retail was Vietnam’s biggest initial public offering in 2017, raising $700 million. That record was broken a year later when Vietnam Technological & Commercial Joint Stock Bank raised $922 million.

(Corrects shareholding structure in ninth paragraph.)

To contact the reporters on this story: Faris Mokhtar in Singapore at fmokhtar1@bloomberg.net;Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Joyce Koh

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