Major Japanese shopping mall developer AEON MALL, in cooperation with local company PT Sinar Mas Land will start building the company’s first mall in Indonesia in BSD City, Tangerang, in the middle of this year.
Sinar Mas Land and the Japanese company announced on Friday the establishment of their joint venture PT AMSL Indonesia that will build and operate the mall.
Michael Widjaja, CEO of Sinar Mas Land, said that the construction of the mall would mark the start of their long-term program to build 20 AEON malls in Indonesia’s growing suburban residential areas.
AEON itself runs more than 15,000 stores worldwide, and has entered the Southeast Asian region in Malaysia and the Philippines. The construction of the mall in BSD City will mark AEON’s debut in Indonesia’s retail industry.
Sinar Mas, on the other hand, has already developed 14 retail centers, including those with the International Trade Center (ITC) moniker, such as ITC Mangga Dua and ITC Roxy Mas.
“Development of this four-story suburban mall will start in mid-2013. The construction is scheduled for completion by the end of 2014,” he said, adding that the mall, with a floor space of 125,000 square meters, would sit on a site measuring 100,000 square meters.
Ishak Chandra, the managing director of Sinar Mas Land, said that the project was worth around US$200 million, with the chief contribution coming from AEON.
“This is because Sinar Mas Land owns 33 percent of the joint venture company. AEON has requested a majority 67 percent shareholding because they, after all, are the ones with the [mall] expertise,” he said.
He added that Sinar Mas Land would dig mainly into their internal cash reserves to finance the project.
Ishak said that the joint venture planned to build at least 20 AEON malls in Indonesia over eight years.
Meanwhile, Soichi Okazaki, CEO of AEON MALL, said that the malls would heavily target the suburban markets, which host a large population of young middle-income families.
“We are targeting these new families as our potential customer base,” he said.
BSD City itself has more than 150,000 residents living in 30,000 homes.
Okazaki added that the AEON MALL BSD City would be filled with 190 tenants, including the AEON-owned General Merchandise Store (GMS) which would sell items bearing the AEON house brand, Topvalu.
“The GSM will be based on the one-stop-shop concept,” he said, adding that shoppers could find items ranging from food to clothing in the store.
He further said that, besides the AEON mall in BSD City, the company also sought to construct another AEON mall, on a site twice as large as the flagship, in the Kota Deltamas township in Bekasi, West Java.
“The development of this mall is still in the planning phase. However, we aim to inaugurate the mall in 2015,” he said.
Ishak said that Sinar Mas Land and AEON would continue seeking opportunities to construct more AEON malls, especially those in cities, townships and land belonging to the developer.
The developer has an approximately 10,000-hectare land bank, around 60 percent of which is located in Serpong and Bekasi.
“However, both Sinar Mas Land and AEON are open to working with other parties who happen to own the land on which we are interested in building an AEON mall,” he said.
He added that the construction of the malls, whose floor space would available for lease, would help the developer grow its portion of recurring income, which currently contributed approximately 20 percent to its annual revenues.
“In the next five years, we want to increase this portion of recurring income to 30 percent,” he said.
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