3 new shopping centers set to open soon

3 new shopping centers set to open soon

Sari P. Setiogi, The Jakarta Post, Jakarta

Three more large shopping centers are scheduled to open in
Jakarta in the last quarter this year, providing more options for
consumers.

Plaza Semanggi in South Jakarta, Plaza Indonesia Entertainment
Center in Central Jakarta and the Korea World Center in Pulo Mas,
East Jakarta will all open within the next couple of months.

Property consultant Procon said in its latest report that
those three malls would add another 70,000 square meters to the
total of 1.6 million square meters of space now available in
shopping centers in Jakarta.

The domestic retail market is the only sector in the country
that has continued to flourish despite the economic crisis. While
other sectors, including office space, industrial parks,
apartments and hotels are mostly in the doldrums, the retail
sector is booming due to strong consumption, which is seen as the
key driver of the country's economy.

Economic growth is predicted at between 3.5 percent to 3.7
percent this year, slightly higher than the 3.4 percent growth of
last year.

Procon's Local Director Lini Djafar, however, noted that
occupancy rates in the retail sector dropped by 1.79 percent in
the third quarter of the year, compared to the previous quarter.
A total of 199,695 square meters of space remains unoccupied.

"Most of the units have been sold to buyers, but some have not
yet occupied the units. The owners sometimes keep them unoccupied
as many of them are not even in the retail business. They just
buy up the units for capital gain," she said.

Investing in the property sector has become an attractive
option for investors as Bank Indonesia's benchmark interest rate
continues to decline and banks have also cut their rates for
investment loans.

Separately, Senior Manager of Procon's Marketing and
Communication's division, M. Dharmesti Sindhunatha, said the drop
in the occupancy rate did not indicate a weakening demand in the
sector.

She said demand actually remained stable, but the entry of new
spaces into the market in the third quarter of the year have led
to the decrease in the occupancy rate.

In the third quarter of the year, three new shopping centers
started operating in Jakarta: the Sports Mall and Kelapa Gading
Trade Center, both in Kelapa Gading, North Jakarta and the WTC
Mangga Dua in West Jakarta.