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)