Dim forecast for retail-space market

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)