Tuesday, 29 January, 2008 | 15:54 WIB
TEMPO Interactive, Jakarta: The growth of property in the retail sector this year is predicted to reach its peak, or highest demand. After the 1998 economic crisis, this sector grew ahead of other sectors.
Property consultant, PT Property Advisory Indonesia (Provis), Arif Rahardjo, said that the sluggish retail growth is caused by the price of rent and the Rupiah’s weakening exchange rate against the United States Dollar. “Apparently developers began to be careful in raising their rent,” he said in Jakarta yesterday (28/1).
The reason is, he said, competition in the retail sector appears to be tighter compared to previous years. Therefore the concept that developers made for retail projects will be important to attract rentals.
In the next two years, Provis predicted that Jakarta’s retail property sector will still be dominated by one-stop-retail. The retail concept which will be a trend is for food products and entertainment. Provis also predicted there will be facility-supporting retail development.
Arif explained that the retail occupation rate has not gone down drastically. The retail sector will surpass its peak if the total of leased rooms and occupation rate decreases. “It hasn’t dropped drastically,” he said.
Retail property absorption in last year’s fourth quarter was recorded to be 67,400 square meters. “This is the highest absorption rate in 2007,” said Arif.
Provis’ Managing Director / Senior Consultant, David Cheadle, said Indonesian property growth will not be affected by the economic condition in the US. “Nor will the property in Japan, China and Korea,” he said.
However, David is certain that the retail property condition in Indonesia is still good. “Healthy but slow,” he said.