Jakarta to have more retail space by end of year
Anissa S. Febrina, The Jakarta Post/Jakarta
With several large retail construction projects nearing completion, Jakarta will see more shopping spaces by the end of 2005, a property consultant says.
According to a report by Coldwell Banker Commercial (CBC), there will be more than 300,000 square meters (sqm) of new leasable retail spaces after five new malls in the capital are finished.
The five new areas are Senayan Park Center and Sudirman Place in South Jakarta, Kelapa Gading Square and Taman Palem Mall in North Jakarta and Grand Indonesia in Central Jakarta.
The Grand Indonesia mall is being built on the former site of the Inna Wisata Hotel, while the historic Hotel Indonesia is under renovation and will become a boutique hotel owned by PT Cipta Karya Bumi Indah, a subsidiary of the country's third- largest cigarette maker, PT Djarum.
In this year's third quarter alone, there were 138,925 sqm of leasable retail space delivered to the market with an occupancy rate of 97.5 percent for well-located space and 90.8 percent for those in secondary locations.
CBC estimated that during the next three years, there would be 1.4 million sqm of stock for leasable retail space.
Meanwhile, for the strata-titled sub sector, there would be a new supply of 412,500 sqm by the end of this year.
The new supply would come from the completion of Taman Palem Mall and Mega Glodok in North Jakarta, Lindeteves Trade Center and Gajah Mada Square in Kota, West Jakarta, as well as Pasar Cibubur and Cibubur Point in East Jakarta.
With the recent economic downturn, characterized by soaring inflation of 15.56 percent for the past 10 months -- occupancy rate in this sub-sector is estimated to decline.
Last week, the Indonesian Retail Merchants Association (Aprindo) reported that small and medium retailers were hit hard as prices of electricity went up.
This was a contrast from the bullish trend CBC reported in this year's third quarter, when some 163,890 sqm of strata-titled retail accommodation was sold, an increase of more than three times on the second quarter.
During the July-September period, a new supply of 187,667 sqm of strata-titled retail space entered the market, contributed by the Tanah Abang Blok A project and nearby Jakarta City Center in Central Jakarta, as well as Cibubur Junction Mall in East Jakarta.
Several property players earlier reported an increase in selling prices of between 10 and 20 percent due to the average 129 percent hike in fuel prices.
"Absorption of retail space will always depend on the location. Those in well-located areas will continue to enjoy stable growth while those in secondary locations, especially for strata-title retail space, might experience a decline," property analyst Panangian Simanungkalit said.