[Kabar-indonesia] Jakarta's malls change shape

[Joyo at aol.com]

The Jakarta Post 
Saturday, August 5, 2006

Jakarta's malls change shape

Anissa S. Febrina, The Jakarta Post, Jakarta

A decade ago, the word "mall" conjured up an image of a boxy, air conditioned 
building filled with people staggering around with bags of shopping.

In the past five years such centers have flourished throughout Greater 
Jakarta, but now the city's residents are demanding more than just the same line-up 
of shops, cafes and a cinema.

The retail property market has been an economic engine in Jakarta, bringing 
the city back to life after the 1998 monetary crisis.

>From 1985 to 2000 a million square meters of shopping space was built in 
Jakarta. In the last six years, the same amount has been built again, and the city 
can expect to see another million square meters by 2008.

As Jakarta's middle class grows and the established upper class become more 
advanced consumers, the conventional "big-box" approach to malls will not be 
enough, a property consultant says.

"There has been a shift in the market's trends," said Wendy Haryanto, retail 
leasing associate director at property consultant Jones Lang LaSalle.

"Its changing face has something to do with how people's lifestyles have 
changed," she added.

With public space lacking in Jakarta, malls have replaced traditional "town 
centers" as locations for community interaction.

Furthermore, Wendy said, the changing functions of malls meant they were 
shifting from becoming all-providing mega-centers to more intimate, friendly 
activity centers. Neighborhood malls are sprouting in areas where land values are 
on the rise.

"There is also a change in the way they are designed, from a big solid box to 
a more spacious and inviting open air plaza," she said.

Several new lifestyle centers in Depok, South Jakarta and North Jakarta now 
provide open space for a range of functions, from musical performances to 
sports activities.

And as Jakartans become busier and busier, new shopping center projects are 
often being integrated with office and apartment buildings.

At some point in the near future, an air-conditioned building with an array 
of outlets and two anchor tenants will not be enough, property consultant 
Procon Indah's senior associate director, Rosaline Lie, said recently.

"Shopping center planners must become more creative in order to survive 
increasingly tighter competition," she said. "Malls must offer a distinct 
experience, more than just shopping."

Both property consultants said that with a large population and a 
still-growing middle class, retail property development in the country still has a bright 
future.

Consumption has become the main force behind Indonesia's economic growth over 
the last seven years, representing up to 70 percent of the country's gross 
domestic product.

Property analyst Panangian Simanugkalit said the property sub-sector promised 
a quick yield, especially for strata-title projects.

"Roughly calculated, a developer can reach the break even point by selling 
only 50 percent of its shopping center," he said.

But urban experts have said there needs to be an indirect cross subsidy from 
large businesses that benefits from such developments to micro-enterprises 
that cannot afford space in malls.

Tarumanegara University expert Jo Santoso said Jakarta already had a bylaw 
requiring mall developers to allocate space to micro-businesses.

"However, it has not been enforced properly and we need to see why it is not 
working," he said.

I-box

Greater Jakarta Retail Property Market Summary

Cumulative supply 3.38 million sqm

Average occupancy rate 78.3 percent
Vacant space 0.74 million sqm
Future additions (by 2007) 1.06 million sqm

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Source: Procon Indah

Comparison of regional retail property market

City Population Total Retail Retail Space

Stock Proportion

(in million) (in million sqm) (person/sqm)

---------------------------------------

Jakarta 7.5 2.4 3.1

Singapore 4.4 2.5 1.7

Bangkok 9.7 4.5 2.2

Manila 11.3 3.0 3.7

Hong Kong 7.0 9.5 0.7

Source: Jones Land LaSalle Research 

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Joyo Indonesia News Service
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