Shopping center boom continues

Shopping center boom continues

The Jakarta Post, Jakarta

At least seven new shopping centers plan to start operating in
the last quarter of the year throughout Greater Jakarta, adding
some 140,000 square meters of retail space in the area, a
property consultant said.

The shopping centers are ITC Kuningan, Plaza Ciputat, Senayan
Trade Center, Plaza Kelapa Gading, Kelapa Gading Mall III,
Cilandak Town Square and Citra Gran Mall, PriceWaterhousCoopers
(PwC) said in its latest property market analysis.

As of Sept. 30, total retail space in the Greater Jakarta
area, locally called Jabotabek, is more than 1.8 million square
meters, including 1,448,000 square meters in Jakarta proper and
370,000 square meters in the surrounding towns of Bogor,
Tangerang and Bekasi.

Of the total 1,448,000 square meters of space in Jakarta, 1.25
million square meters are leased spaces, while the remaining
198,000 square meters are strata title spaces, PwC said.

"More new centers are planned, mostly with long lease or
strata concepts, and some in mixed use developments such as
shophouses or apartment complexes.

"If all planned projects are realized, there will be at least
800,000 square meters of new shopping centers in Jabotabek
between late 2002 and 2005," PwC said.

Despite the lingering economic crisis, the retail sector has
been on the rise over the past several years on the back of the
public's strong consumption, which is also seen as the remaining
key driver of the country's economic growth amid declining
exports and investment.

The sector is the only one in the property market showing
progress amid the economic crisis as the office, apartment and
hotel sectors remain in the doldrums.

PwC noted that amid optimism over public consumption growth,
several hypermarket operators were set to expand their businesses
this quarter and next year.

French superstore chain Carrefour will open its tenth store in
ITC Kuningan this quarter, while Giant, which opened its first
store in Serpong in August this year, will open its second store
in Maspion Square Surabaya this quarter and its third store in
Mega Bekasi Hypermall by 2003. Giant is wholly owned by publicly-
listed PT Hero Supermarket.

PwC said occupancy rates remained stable in Jabotabek shopping
centers at 93.7 percent in the third quarter of the year,
compared to 93.6 percent in the second quarter.

In the office sector, several new buildings, including IKPT,
Graha Seti II and Ratu Prabu, will open in the last quarter of
the year in Jabotabek, adding more supplies to the already over-
supplied market.

In the apartment sector, which has also been dealing with
oversupply problems for years, a total of 115 new units entered
the market in the third quarter of the year with the opening of
Apartment Golf Pondok Indah 2.

In the hotel sector, the Jabotabek market saw the opening of
Danau Sunter Hotel in the third quarter and will see the opening
of several new hotels, including Hotel Maharani and the Hotel
President extension (Nikko Tower). These two hotels will add
approximately 282 rooms to the total which is currently 21,550
rooms.

PwC said the Bali bombing three weeks ago would certainly
affect the hotel sector, which, despite a rise in occupancy, saw
a decline in room rates in the third quarter.