Shopping center boom continues despite economy
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.