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Jakarta Post

East Jakarta craves its share of mall action

President Joko “Jokowi” Widodo In 2013, while still governor of the capital, touted Jakarta as the city with the highest number of malls in the world

Agnes Anya (The Jakarta Post)
Jakarta
Mon, March 27, 2017

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East Jakarta craves its share of mall action

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resident Joko “Jokowi” Widodo In 2013, while still governor of the capital, touted Jakarta as the city with the highest number of malls in the world.

Although there is no official data to confirm this dubious accolade, a 2014 report from real-estate service company Cushman & Wakefield showed that Jakarta had more than 170 malls, and thus it was included on a list of the world’s biggest cities with a significant number of shopping centers.

Irked by the seemingly uncontrolled mushrooming of shopping malls in Jakarta, Jokowi said previous city administrations had focused too much on misguided economic development, which he claimed had encouraged people to live a hedonistic lifestyle.

Nevertheless, a penchant for the hedonistic lifestyle seems to be firmly ingrained in Jakarta citizens as they crave ever more luxurious shopping malls to satisfy their materialistic cravings, with more and more malls set to open in Greater Jakarta in the near future.

According to a recent report by property consultant Colliers International, the region will have 15 new shopping malls between 2017 and 2019, with six of them due to open this year.

The new shopping malls will add to Jakarta’s existing retail space of 4.24 million square meters, equal to 514 football fields.

While there has been a significant decline in requests for mall construction permits in the capital in the last two years, probably as a result of market saturation, there is one part of town where the demand for new shopping malls is still high: East Jakarta.

The municipality can look forward to welcoming Japan-based retail shopping center AEON Mall and Sweden-based furniture store IKEA, according to Jakarta’s one-stop integrated service head, Edy Junaedi. “The developer had asked for an operational permit for AEON, but it has just informed us about IKEA. It has yet to ask for anything with regard to IKEA,” he added.

AEON Mall is currently under construction and is expected to open in either September or October this year. Another retail center called Titanium Square is also expected to open in East Jakarta this year.

AEON Mall, IKEA and Titanium Square are just for starters, as most of the planned malls are to be built in East Jakarta, where there are still relatively few mid-range and high-end shopping centers, according to Edy.

Currently, East Jakarta has 17 shopping malls, with only one, Cipinang Indah Mall, regarded as high-end. By comparison, South Jakarta is home to 30 malls.

Therefore, there is a great deal of untapped market potential for developers to cater to the rising middle class with its increasing purchasing power in East Jakarta.

“East Jakarta’s access [to malls] is less than other municipalities. Meanwhile, other municipalities are already swamped with many malls. Hence, for some years, many developers have been interested in [building malls in] East Jakarta,” said the chairwoman of the Jakarta branch of the Indonesian Shopping Center Association (APPBI), Ellen Hidayat.

In 2016, inactive Jakarta Governor Basuki “Ahok” Tjahaja Purnama said his administration would not issue permits for the construction of new malls in Central Jakarta, presumably as the area was considered already too crowded with malls.

However, he stressed that developers were still allowed to build new malls in East Jakarta, as long as they followed the rules.

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