Trade center property industry going fine

Suhandi, Jakarta

In the past two years we have almost always read advertisements offering or announcing the construction of shopping centers, particularly trade centers, in the mass media. These centers are located not only in Jakarta and on its periphery but also in other major cities in Indonesia.

This present condition is much different from the situation that prevailed when the monetary crisis hit Indonesia in 1997/1998. Although the exchange rate of rupiah against the US dollar is still relatively low, the value has been stable enough in the past year.

It must be admitted, however, that aside from this encouraging aspect, there is also quite an alarming phenomenon. Just go to a number of trade centers, including newly opened ones, and you will find them empty of visitors as many of the kiosks or stalls there are still unoccupied.

There is a tendency now among property developers to mobilize funds for the construction of a trade center through installment payments from buyers in a bi to avoid from raising a large amount of bank loans.

The monetary crisis was a bad experience for many property developers. As a result of this crisis, many developers in the upper ranks went bankrupt as they failed to repay their debts when the exchange rate of rupiah against the United States dollar dropped to its lowest rate.

In addition to capital, in my opinion, you must pay attention to four crucial things when building a trade center. First, location and accessibility. Second, careful and well-thought-out planning. Third, marketing strategy and fourth, developers' commitment and consistency.

It has always been said that the most important thing to consider in the property business is location. This is not wrong, of course, but it must include good accessibility. A good and strategic location may not have good accessibility. A number of malls and trade centers in Jakarta are located in strategic places but accessibility to this place is poor because of, for example, a serious traffic jam or traffic restriction. In this context, it is unwise for one developer to simply follow another developer that has had great success with their trade center in a particular area.

Careful and well-though-out planning must take several factors into account. The first factor is how to determine the target market in terms of the prospective buyers and prospective visitors. At this junction, a special survey must be conducted about the scope of the location, the size and characteristics of the demand, the purchasing power, the lifestyle and other factors. A noted property observer has told me "if you know there are a lot of ants in one place, put some sugar there." This means that it is very crucial to have a good knowledge of your target market.

The second factor is the concept and the design. As competition in this particular business is getting keener, it is vital to ensure that your concept and design are specific and unique. Besides, this concept must be clear and offer a high sales value and prospect for the consumers targeted. When you draw up your concept and design you must observe the tenancy mix and the tenancy zoning, which, in a trade center, is based on groups of businesses. The presence of anchor tenants, well-known tenants occupying a relatively big space, plays an important role as a traffic puller. In connection with the tenancy mix and the tenancy zoning, many developers have popularized the term of "one-stop shopping" to lure the target market.

The next factors relate to comfort security and complete auxiliary facilities, among others a spacious exhibition area and parking lot. These factors are inseparable from the fact that our community's lifestyle shown a higher standard today. Marketing

Whether a mall or a trade center will be successful at selling is determined not only when it is planned or when it is under construction but also when it is marketed.

A marketing strategy is said to fail if many buyers resell or rent their kiosks to other parties. When marketing a trade center, you must therefore select your prospective buyers.

In this context your selection will be related not only to their business areas but to how many units they will buy. If a buyer purchases a great number of kiosks but does not have a clear concept about how to use these kiosks, the image of the mall or trade center will be harmed when it is opened. Many malls and trade centers are in this situation because many kiosks owners offer their kiosks for sale or rent.

Another marketing strategy to take into account is the quality of your promotion. Is your promotion right for the target market? Is it carried out in the right frequency and through the right media? There are many other promotional aspects that must be observed.

Sales methods and tricks will also determine whether a mall or a trade center will be a success story. Sales tricks in which prizes and discounts are given are too common. You need fresh sales tricks to lure people to buy.

A method of payment is also now quite a decisive factor to determine whether someone will buy a kiosk in a mall or a trade center. The trend now is to sell your space under a strata-title system. This system is secure for both the developers and the buyers.

It is a developer's job to convince a buyer not only just to buy a kiosk to re-sell or rent it but also to start his or her own business in accordance with the trade zoning already determined.

In terms of payment, a specific strategy must be devised so that this will not be burdensome to either the buyer or the developer. A bank loan system is still a favorite for buyers aside from the cash system. Even under a cash system, you can choose whether to pay the whole price cash or to pay in several installments.

After all, the commitment and consistency of the developer will also have a say in determining the success of a mall or a trade center. A developer, for example, must maintain the original concept of their mall or trade center. In some cases, some developers have to change the concept or design of their mall or trade center just because they want to reach their target. In the long run, this will harm its image.

From what I have described above, I can draw a conclusion that the mall and trade center industry is yet to reach its saturation point. What we are witnessing today is that a mall or a trade center is put up on the wrong location or is marketed under the wrong strategy. We cannot just generalize about what is happening in the mall or trade center property industry. It would be wiser if we reviewed the situation case by case. -- The writer is the marketing division head of PT Jakarta Kemayoran Properti