Jakarta's Upscale Malls Flooded with Demand, Retailers Compete for Rental Space

The retail sector in Jakarta and its surrounding areas shows a stark contrast between different classes of shopping centres. Amid post-pandemic recovery efforts, upscale or premium malls are recording long queues of prospective tenants (waitlists). This phenomenon is boosting the confidence of mall owners to continue setting high rental rates despite the lingering threat of online shopping competition. In stark contrast, mid- to lower-tier malls have occupancy rates still stuck at 58% and have not fully recovered. Limited land availability in Jakarta is shifting the direction of new shopping centre developments towards the Bogor, Depok, Tangerang, and Bekasi areas (Bodetabek). By 2029, Jakarta is projected to receive only an additional supply of 63,000 square metres, while Bodetabek will see a higher figure of 91,000 square metres. Head of Research at Colliers Indonesia, Ferry Salanto, explained that the food and beverage sector is the most active tenant dominating current retail space demand. “Upscale malls are still hotly contested by retailers. Retailer expansions are now increasingly selective and strategic. They prioritise locations with high visitor traffic even if it means occupying smaller available spaces,” said Ferry, quoted by Kompas.com on Sunday (12/4/2026). To bridge the gap and maintain competitiveness, operators of mid- to lower-tier malls are taking radical steps. Total renovations, rebranding, and expanding rental areas to strengthen the tenant mix have become top priorities. Some malls are also starting to provide semi-open areas and lifestyle facilities such as sports centres and entertainment to draw in visitors. Ferry noted a change in retailers’ behaviour regarding contract durations. As a risk mitigation strategy, many new brands are opting for shorter lease periods, under three years. Brands from Japan, China, and Malaysia are entering the Indonesian market supported by data analytics. “They select locations with great precision according to their target markets. If a branch underperforms, they do not hesitate to close it and focus on maximising profits at strong-selling branches,” added Ferry. Mall operators are required to consistently deliver comprehensive tenant mixes to remain relevant to increasingly savvy consumers who are selective about their shopping destinations.