Retail market spurs property recovery

Retail market spurs property recovery

JAKARTA (JP): The retail market, led by supermarkets,
hypermarkets and department stores, spurred a recovery in
Jakarta's property sector this year, according to leading
property consultant Procon Indah/Jones Lang LaSalle.

Due to Indonesia's 4 percent economic growth this year, the
occupancy rate of the capital's available retail space reached 92
percent in the third quarter of 2000, well up on the 88 percent
at the end of 1999, the company said on Tuesday, quoting its
newly released Property Outlook report for 2001.

The occupancy rate reached 95 percent in the Central Business
District (CBD), said Mina Ondang, Procon Indah/Jones Lang LaSalle
senior manager.

The district houses Jakarta's prime business sites. Referred
to as the "Golden Triangle", it is delineated by Jl. Thamrin and
Jl. Sudirman to the west, Jl. Gatot Subroto to the South and Jl.
Rasuna Said to the east.

The office and apartment sectors made a strong performance
during the year while recovery in condominium, industrial and
residential sectors was somewhat slower, according to the report.

Mina, who also heads the company's research division, said the
recovery in the retail sector this year continued the trend that
was started in the third quarter of 1999.

The report said some major local and foreign retailers would
expand their businesses in Jakarta next year in line with the
expected economic recovery in Indonesia, and therefore with an
increased spending power of the public.

Many supermarket, hypermarket and department store retailers
will add new outlets in the shopping centers. Some might be
forced to move into space in independent buildings because of
limited availability in shopping centers, it said.

In the office sector, rental rates did not rise significantly
this year in spite of a positive increase in demand, Mina said.

The occupancy rates for the office sector reached 76 percent
in the third quarter of 2000, compared to 74.5 percent at the end
of 1999, according to the report.

Procon Indah/Jones Lang LaSalle said the market for office
space would be absorbed mostly by consumer goods-related
businesses, export-oriented trading or manufacturing companies,
financial services and telecommunications and information
technology companies.

The rental apartment sector has indicated some recovery,
evidenced by an anticipated influx of expatriates into Indonesia
since the fourth quarter of 1999 as a result of better political
stability and more active growth in the manufacturing industry,
the report said.

Expatriates accounted for most of the 57 percent occupation
rate of rental apartments in Jakarta in the third quarter of
2000.

The report said recovery in the condominium, industrial and
residential sectors had been quite slow this year.

Procon Indah/Jones Lang LaSalle said the property sector was
expected to continue to recover in 2001, although much depends on
the rate of Indonesia's economic growth and the political
situation.

"With the government targeting an economic growth rate of
between 4.5 percent and 5 percent in the next year, we hope the
property market will be much better from now on," Mina said. (03)