3 New Malls to Open in Jakarta as Retail Sector Recovers Post-Pandemic

New Malls to Open in Jakarta as Retail Sector Recovers Post-Pandemic (photo: Boudhayan Bardhan - Unsplash)

Three new malls or shopping centers in Jakarta are set to open this year, reflecting the recovery of occupancy rates in the retail sector driven by the lifting of the PPKM measures at the end of 2022.

According to a report from Knight Frank, the report states that the occupancy rate in the retail space in the second half of 2022 rose slightly to 78.8%, up from 78.52% in the previous semester.

Sindiani Adinata, the Director of Strategic Consultancy at Knight Frank Indonesia, stated that the retail sector is one of the most promising sub-sectors in the property market as it experiences a fast bounce-back after the pandemic.

“The level of activity in most malls and shopping centers in Jakarta increased sharply after the PPKM was lifted. This is driving the retail market to catch up with the lagging performance of previous years,” said Sindiani.

However, the report also highlights that not all types of retail have experienced the same positive signal, with occupancy rates and supply still higher for lease-type retail compared to strata-title retail.

Lease-type retail has an average occupancy rate of 82.26% from a total existing supply of 3,248,712 square meters, while there are still 576,284 square meters of empty space.

In contrast, the average occupancy rate for strata-title retail is 72.13% from a total supply of 1,675,199 square meters, with 1,043,242 square meters of empty space.

The report also notes that there are three new retail projects in Jakarta that will operate in 2023, bringing the total mall supply to 4,923,911 square meters.

In addition, there will be six more mall projects with a total supply of 292,109 square meters until 2025. These new malls include Retail Podium Thamrin Nine, Holland Village Mall, and Pusat Grosir Senen Jaya.

While some food and beverage (F&B) retail tenants have closed their businesses, Senior Research Advisor at Knight Frank Indonesia, Syarifah Syaukat, explains that this will not significantly affect retail occupancy rates this year.

“This will not have a significant impact as there is still strong absorption of retail space by other potential tenants from the fashion, electronic, e-commerce, groceries, sport apparel, and games or kids playgrounds sectors,” said Syaukat.

The report also states that concerns about a decline in consumer visits to retail spaces have not been proven.

Some tenants, such as footwear, fashion, and cosmetics products, are even expected to have strong growth.

The latest Jakarta Property Highlight report also reveals that the average rent and service charge prices in the second semester of 2022 increased by approximately 1.24% to Rp751,351 per square meter.