Surabaya's retail property market oversupplied<\/p>\n
JAKARTA (JP): The property market in the retail sector in
\nSurabaya, Indonesia's second largest city in East Java, is
\noversupplied as a result of overbuilding during the economic boom
\nin the mid-1980s and poor shopping center management.<\/p>\n
\"The situation is aggravated by the propensity of wealthy
\nSurabayans to shop in Jakarta and in other Asian capitals. So we
\ndon't anticipate an upturn in retail demand in the immediate
\nfuture,\" said Trevor Peach, the managing director of PT Colliers
\nJardine Indonesia, in a six-month Asia-Pacific property report
\nsent to The Jakarta Post over the weekend.<\/p>\n
Peach said the current retail stock in the central business
\ndistrict is about 110,500 square meters spanning six shopping
\ncenters, two of which -- Tunjungan Plaza I and Tunjungan Plaza II
\nat the heart of Surabaya -- are very successful.<\/p>\n
\"They enjoy occupancies of between 95 and 100 percent and
\ncommand annual rents from US$348 to $444 per square meter,\" he
\nsaid, adding that other shopping centers are poorly managed with
\nonly 40 or 50 percent occupied.<\/p>\n
Colliers Jardine is a leading multinational property
\nconsultant which has 29 offices in 11 countries, particularly in
\nthe Asia-Pacific region.<\/p>\n
For comparison, Colliers Jardine reported that the occupancy
\nfor prime retail facilities in Jakarta's central business
\ndistrict has remained steady at 98 percent, while the annual rate
\nof rents is between $420 and $720 per square meter.<\/p>\n
Supporting Peach's prediction, an executive of PT Procon Indah
\n-- another leading property consultant, -- earlier said that the
\nretail business in Jakarta is growing steadily following the
\ngrowing buying power of middle-class people.<\/p>\n
A number of retail places will soon be completed in Jakarta,
\nwhich include Sunter Mall and Metro Sunter Plaza, both in North
\nJakarta, as well as the expansion of Arion Plaza in East Jakarta.<\/p>\n
Peach said that developers are currently constructing a number
\nof high-rise buildings in Surabaya, which include Tunjungan Plaza
\nIII and some suburban centers in east and west Surabaya.<\/p>\n
Industrial sector<\/p>\n
Unlike the retail sector, the demand for industrial places in
\nSurabaya is expected to grow between six and seven percent over
\nthe next year, Peach said.<\/p>\n
\"Demand is shifting northward in anticipation of the December
\n1994 completion of the Gresik toll road, with at least five more
\nindustrial estates planned for adjacent areas,\" he said.<\/p>\n
Colliers Jardine revealed that the majority of the factories,
\nhowever, are located outside industrial estates due to lower land
\ncosts.<\/p>\n
In the industrial estate of PT Surabaya Industrial Estate
\nRungkut, which is almost totally filled, land prices are $100 per
\nsquare meter.<\/p>\n
Peach said other industrial estates are only one-tenth
\noccupied.<\/p>\n
Industrial estate developers in Surabaya have repeatedly
\ncalled on industrialists to build their factories inside
\nindustrial estates but this request has been largely ignored.<\/p>\n
In a related development, Collier Jardine noted that Coca Cola
\nhad recently bought 9,600 square meters of land near the Tanjung
\nPerak port area at $70 per square meter.<\/p>\n
It said the plot will be Surabaya's first combined office-cum-
\ndistribution warehouse complex.<\/p>\n
Fast food<\/p>\n
Collier Jardine also said that fast food franchises are
\nshowing tremendous growth potential, with a range of
\ninternational chains positioning themselves to cater for
\nJakarta's changing lifestyle.<\/p>\n
\"Pizza Hut plans to spend $9.5 million over the next two years
\non 20 new restaurants, while Domino's Pizza has signed an
\nagreement with a Jakarta-based firm for 40 franchise outlets,\"
\nPeach said.<\/p>\n
He said that PT Sejahtera Pioneerindo, the license holder of
\nCalifornia Fried Chicken which has already managed 124 outlets
\nthroughout the country, plans to have 40 more outlets in Jakarta,
\nBandung and Medan.<\/p>\n
As the result of the booming fast food industry, Peach said
\nthat Collier Jardine expects the capital values of prime central
\nbusiness districts in Jakarta to increase slightly from $2,200-
\n$2,900 to $2,300-$3,000 a square meter by June 1995. (09)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/surabayas-retail-property-market-oversupplied-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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