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Mall tenants demand limited hike in rental costs
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A sales assistant awaits customers at Taman Anggrek Mall, West Jakarta. (JP/PJ Leo)
M
all tenants under the Indonesian Shopping Centers Tenants Association (Hippindo) have demanded a sober hike in rent and service charges at a maximum of 5 percent, similar to the inflation rate, amid slow sales due to the domestic economic slowdown.
“In the past three years, our sales grew only on the back of inflation and new stores opening and not on the basis of improved public spending. However, service charges climbed by 18 percent or more, and rental charges by more than 100 percent,” Hippindo chairman Budihardjo Iduansjah said during a press briefing on Tuesday.
Nielsen research firm projects fast moving consumer goods (FMCG) sales will grow only by 9 percent in 2016, lower than the 11.5 percent growth recorded in 2015.
“Our sales slowed down starting from 2014 onward and at the same time, malls started to increase their rates unreasonably. If this continues, it could prompt the closure of more retail outlets in malls and it would impact the industry as most of our products are locally made,” Budihardjo said.
The association discussed the matter with the Trade Ministry and Indonesian Shopping Center Association (APPBI) but had not made significant progress, he added.
Hippindo comprises 198 FMCG retailers, restaurants and entertainment venues with 50,000 outlets across the country, employing 3 million people. (ags)
