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.