Trade center property industry going fine

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