More malls open in Jakarta, Botabek

At least three shopping malls in Jakarta and surrounding areas of Bogor, Tangerang and Bekasi (Botabek) began operating during the third quarter of this year.

The new malls include ITC Fatmawati in South Jakarta, Mal Ramayana in Celeduk, and the first flour of Plaza Pondok Gede, both in Botabek area.

The supply of freehold shopping space increased to 153,000 sq meters during the third quarter from 140,000 sq meters thanks to the opening of ITC Fatmawati, according to the latest report issued by property consultants PricewaterhouseCoopers.

Leased space at shopping malls in Jakarta remained at approximately 1.2 million sq meters, since Glodok Plaza postponed its re-opening from the third to the fourth quarter.

In Botabek area, the opening of Mal Ramayana and the first floor of Plaza Pondok Gede added around 15,000 sq meters to Botabek's total stock of 340,000 sq meters.

ITC Cempaka Mas, Harco Mas Mangga Dua and ITC Kuningan, which are now under construction, are all freehold projects. They are financed by pre-sales and installment payments.

Of similar kiosk-type shopping malls, Plaza Ciputat, MTC Mangga Besar, ITC Mangga Dua Square and WTC Mangga Dua were launched during the third quarter. Some have not yet started construction and so are likely to enter the market only after 2002.

Several long-term leasehold shopping malls were also launched during the period. They include Senayan Mangga Dua in Taman Ria, Plaza Kelapa Gading I and Plaza Semanggi. The developments have limited leasehold terms of between 20 years and 25 years, and units are sold on a coterminous leasehold basis.

According to PricewaterhouseCoopers, development and launching of new leased shopping centers during the third quarter included Town Square (measuring about 30,000 sq meter) in South Jakarta, Citra Grand Mal Cibubur (17,000 sq meter) in the eastern part of Jakarta.

A new lease project, Kelapa Gading Mall III (about 40,000 sq meters) will start construction in the forth quarter.

The marketing of two shopping centers Mal Daan Mogot and Plaza Kebayoran, which were damaged during the bloody riots in May, 1998, has started.

At least four shopping centers with approximately 65,000 sq meters are expected to operate next quarter. They include Glodok Plaza, Pasar Glodok -- which have been refurbished as electronics and computer centers -- Wisma Maspion, a new lease center in an office building and Pasaraya Building III, which will operate with a cinema, food & beverage facilities, spa and health club.

The construction activity of the shopping centers during the third quarter is still dominated by freehold developments and the rebuilding of damaged centers.

Several leased shopping centers have begun development, with confirmed pre-commitments by anchor tenants. New shopping centers will give special attention to lifestyle image. Entertainment, leisure and food & beverage concept will be emphasized, as shopping is increasingly becoming a significant part of family recreation and leisure.

Rental rates in shopping malls in Jakarta and Botabek continued to increase in the third quarter despite relatively stagnant demand.

The average rent for typical floors in some centers in Jakarta increased by 15 percent to US$40 per square meter per month from $35 in the second quarter.

The average rent in the Botabek area remained at about $25 per sq meter. The largest increase was in Grade A shopping malls such as Mal Pondok Indah and Mal Taman Anggrek.

The exchange rate for rents across Jakarta rose by between Rp 200 to Rp 1,000 per U.S. dollar, making the actual increase in rents paid by tenants reach 40 percent.

Pricewaterhouse said that the average fixed exchange rate for shopping malls in the Botabek area rose by between 5 percent and 9 percent to between Rp 4,100 and Rp 5,550 per U.S. dollar during the July to Sept period.

Following utility tariff increases, Jakarta's service charges increased slightly to $8.6 from $8.5 per sq meter per month, in the Botabek area it rose to $7.4 per sq meter per month from $7 per sq meter per month.

Meanwhile, the occupancy rate showed a decline to an average of 92.9 percent during the three-month period for shopping malls in Jakarta and the Botabek area.

In Jakarta's shopping mall, the occupancy rate decreased from 95.5 percent to 93.8 percent, while in the Botabek area, the rate remained at 90 percent.

Grade A occupancy substantially decreased to 94.3 percent from almost 99 percent, mainly due to the closure of an anchor tenant in Kelapa Gading mall. Grade B occupancy also dropped to 96.1 percent from 97.2 percent in the previous quarter.

Pricewaterhouse Coopers said that for grade C and D, occupancy remained at approximately 91 percent and 92 percent, respectively.

New tenants during the third quarter were mostly computer, electronics, cellular phone outlets, restaurants and clothes boutiques.

-- Hendarsyah Tarmizi