Jakarta to have more retail space by end of year

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.