Dim forecast for retail-space market

JAKARTA (JP): Jakarta's retail-space market faces a dim outlook with demand and occupancy projected to continue to decline in 1999, property consultants have said.

PT Procon Indah/Jones Lang Wootton predicts in the latest edition of its biweekly property report there would be a further 8,000 square meters decline in cumulative demand by the end of 1999, which would cause the average vacancies to increase to 22 percent from 20 percent at the end of 1998.

"Higher vacancy will put greater pressure on landlords to reduce rents further in order to maintain occupancy," the report said.

The report, which reviewed conditions in the retail-space market in the last quarter of 1998, said that average rents in the primary and secondary suburban shopping areas during the period remained stable at US$48.8 and $35 per square meters per month, respectively.

Construction of retail projects would also continue to slow down, the report estimated, saying that projects are unlikely to recommence in the next two to three years, given the continued deterioration in the economy.

New retail space being completed continues to decrease in square meters from 219,000 in 1996, 152,000 in 1997 to only 77,200 in 1998.

Total cumulative supply of retail-space in Jakarta was recorded at 1.07 million square meters by the end of 1998, according to the report.

Shopping center visitors increased last Christmas, New Year and Ramadhan, but retailers recorded a significant decline in sales turnover - about 30 percent compared to previous years, it said.

Several retail center managers changed tenant mix, the report said, citing the opening of the audio center on the ground floor of Plaza Indonesia and the extension of the food court area in Mal Pondok Indah. "(In addition) more restaurants and food outlets (are planned) for several centers in coming months," the report said. (02)