H1 retail growth slower
The Jakarta Post, Jakarta
Despite a sharp increase in the amount of square meters now available, the retail property market in Greater Jakarta showed slow growth during the first semester of 2005.
Property consultant company PT Procon Indah director Lini Djafar said there were over 50,000 square meters (sqm) of additional retail spaces in Greater Jakarta from January to June.
She said most of the spaces were located in Jakarta and the rest in the capital's outskirts of Depok, Bogor, Tangerang and Bekasi.
The company's Jakarta Quarterly Property Market Review, issued on Thursday, showed that new retail properties in the capital came from Plaza Senayan Arcadia, an extension of Plaza Senayan in Central Jakarta, which provided 5,500 sqm.
Tangerang, which has the most rapidly growing retail outlets, has two new strata-titled retail centers -- Plaza Sinar Merdeka and International Trade Center (ITC) in Bumi Serpong Damai (BSD) -- adding some 45,000 sqm of retail space in the area.
Lini said that leasing transactions during the first six months were relatively low with a limited number of retailers opening new outlets.
"Transactions during the period came mainly from major retailers with large space requirements such as Index (furniture shop) at Mal Artha Gading in North Jakarta, Carrefour in ITC BSD, and The Sands Executive Club at Mangga Dua Square in West Jakarta, which respectively had taken up more than 5,000 sqm of retail space," she said.
The overall occupancy rate of retail property in Greater Jakarta as of the end of June stood at 81.8 percent of the 2.62 million sqm available, leaving 477,900 sqm physically vacant.
Those figures resulted from a 1.05 percent increase in Jakarta and a 2 percent decrease on the outskirts.
"The occupancy level of retail market in Jakarta's outskirts decreased mainly because the completion of several new strata- titled centers which now have a low physical occupancy level," Lini explained.
The company's report also showed that average rental fees and service charges were relatively stable at US$26.4 per sqm per month as landlords postponed their plans to hike the fees due to tougher competition in the market.
Lini said the slow growth, however, should not necessarily mean negative growth in the future.
"Future availability of retail space in Greater Jakarta will continue to be dominated by strata-titled trade centers and the completion of these projects is likely to increase vacancy during the course of the year," she said.
The company projected an addition of 1.58 million sqm between the second semester of 2005 and early 2007. (006)