The Jakarta Post
Currently Jakarta has more than 170 malls, providing consumers with shopping venue options but at the same time causing worsening traffic congestion.
Cushman &Wakefield, the world's largest privately held commercial real estate services company, disclosed in its Global Cities Retail Guide 2013/2014 report that Jakarta has seen 17 percent growth of retail space, almost reaching 4 million square meters (sq m).
With over 170 malls, Jakarta is included on the list of the world's biggest cities with many shopping centers.
Meanwhile, Lamudi, a news portal for property, said in a press release that each mall showcased its own uniqueness to lure visitors. For example, Grand Indonesia boasted the largest movie screen in the country whereas Mall Kelapa Gading had the largest IMAX Theater and Catwalk in the country
Lamudi Indonesia managing director Karan Khetanthe said increasing per capita income, the rising middle class and increasing purchasing power were factors behind the jump in demand for retail space in Jakarta.
'If you visit every shopping center in Jakarta, you will feel the 'economic excitement' in Indonesia. The mushrooming of high-end labels plus a range of shops and restaurants that offer local and foreign products have prompted consumers' interest in 'retail therapy',' he noted.
According to Indonesian Shopping Centers Association (APPBI) head Handaka Santosa, despite the high requirements set by the local government for getting retail space, many retailers still strove to meet the requirements for their business expansion, especially to cater to the market.
'Inflationary pressure does not hamper buying power among the upper class. Thanks to economic growth, they enjoy increasing income. The upper class has shifted in terms of expenditure, from basic needs to lifestyle products and services,' he told kompas.com.
The average woman in Jakarta spends about three hours on every visit to a mall.
The study said that CBD Jakarta had the biggest portion of retail supply, with 44 percent, followed by South Jakarta with 21 percent, North Jakarta with 20 percent and West Jakarta with 17 percent.
With the rising number of retailers, consumers have more options and they do not have to spend much time traveling between malls as they are located close to each other. On average, there are four shopping centers within four kilometers.
At Kebon Kacang, located in Central Jakarta, shoppers can find Plaza Indonesia, Grand Indonesia, and Thamrin City. While at Senayan, in South Jakarta, they can find FX Plaza, Senayan Trade Center, Plaza Senayan and Senayan City.
Between those two clusters is the Satrio corridor, where people can shop at Lotte Shopping Avenue, Mal Ambassador, ITC Kuningan, Kuningan City, and Kota Kasablanka.
While many malls in Jakarta please shoppers as they have more options, many have expressed concern over the issue, with worsening traffic congestion being one of the reasons.
According to Jakarta Development Planning Agency head Sarwo Handayani, the moratorium, introduced in October 2011 by former Jakarta governor Fauzi Bowo, will be addressed in a formal gubernatorial decree.
'There will be no new permit to develop other new shopping centers,' Acting Jakarta governor Basuki 'Ahok' Tjahaja Purnama said in May this year, when he was deputy governor. He confirmed that since 2012, the Jakarta government had not allowed any new establishments in the center of the city.
With Jakarta becoming crowded with malls, several major developers have eyed cities outside the capital for their retail space projects. Surabaya is a targeted retail space and several retail projects are now under construction.
Tunjungan Plaza V, Marvel City (E Square), Lippo Mall Gubeng and Supermal Pakuwon 2 will be in full operation by 2016.
Meanwhile, other nine shopping centers are set to be constructed between 2015 and 2017. They include Hampton Square, Praxis, The Frontage, Maspion Square 2, Tunjungan Plaza VI, Mal Pasar Atum 2, One Galaxy Mall, Ciputra World Surabaya 2, and Puncak CBD Jajar.
Colliers International Indonesia associate director Ferry Salannto confirmed that the growth of shopping centers in Surabaya was prompted by the massive expansion of retailers.
'Many retail business owners are coming to Surabaya due to local residents' rising purchasing power,' he said.
'The Kawan Lama Group has seen the opportunity. It has aggressively expanded its retail business by opening some of its chain stores in malls in West Surabaya. Ace Hardware, Toys Kingdom and Informa have opened their stores almost at the same time,' Ferry said.
Occupying almost 6,000 sq m in Surabaya, Ace Hardware is the 100th and the second biggest Ace store in Indonesia.
Informa is intent on catering to the middle class with high income, especially from residents in West Surabaya.
Lotte Group is another aggressive retailer, followed by Electronic Solution and Blitz Megaplex. Together, Lotte Group and Electronic Solution will occupy 8,000 sq m of space in Marvell City. The coming Blitz Megaplex will be its first establishment in Surabaya. (Eddy Kasdiono)
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