Occupancy rate of shopping centers down
Sari P. Setiogi, The Jakarta Post, Jakarta
The occupancy rate for shopping centers in the Greater Jakarta area declined in the forth quarter of 2002, as the market showed some signs of oversupply, consultancy firm PricewaterhouseCoopers (PwC) said on Thursday.
The decline might also signal that consumer spending, which has been the main engine of economic growth over the past several years, is slowing, it said.
"The occupancy rate declined by 1.4 percentage points to 92.2 percent, although the retail sector itself was still the strongest sector last year," PwC's vice president director for the property group, Dian Pradipta, said.
She predicted the declining trend would persist in the coming years as more new retail space came onto the market despite the apparent oversupply, and as the prolonged economic crisis and inflation further dragged down consumer spending.
"We predict the market will be oversupplied in the next one or two years, while the occupancy rate will drop below 75 percent," Dian said.
PwC's retail property manager, Sari Wulaningsih, said the favorite shopping centers remained those located the capital's prime areas, such as Plaza Senayan, Plaza Indonesia and Pondok Indah Mall.
"The occupancy rates for these locations reached almost 100 percent. Maybe because the consumer spending of those who go (to these shopping centers) has not been very much affected by the prolonged crisis or inflation," she said.
Sari said the supply of new retail space between 2003 and 2005 would reach 800,000 square meters, 80 percent of which would either be sold under a strata-title scheme or leased on a long- term basis.
In 2003 alone, about 300,000 square meters of new shopping centers will be offered on the market, she said.
"One of them, which was just launched early this year, is the Senayan Trade Center. There will also be the World Trade Center, Mangga Dua, Plaza Kelapa Gading I, Plaza Ciputat, Plaza Eka Loka Sari and most likely Plaza Indonesia III," said Sari.
Sari said projects that offered space on the basis of long- term leases had better prospects than strata-title projects.
"Occupancy rates for shopping centers for lease will remain high, while strong take up of the new strata projects may be lacking, since many of the buyers are only investors and not end- users," Sari said.
The existing shopping centers in Greater Jakarta have a combined space of about 1.556 million square meter. About 1.35 million square meters are leased, while 216,000 square meters are strata-titled, she said.
In the forth quarter of 2002, three new shopping centers entered the market: Cilandak Town Square (South Jakarta), Kelapa Gading Mall III (North Jakarta) and ITC Kuningan (South Jakarta).