Demand: Indonesia is Seen As a Lucrative Market for International F&B Brands
The overall Jakarta retail market was relatively stable during the last quarter of 2021. Occupancy rate stood at 76.7%, increased slightly by 0.2% since in the last quarter. In the midst of the uncertain pandemic condition, Indonesia is still seen as a potential lucrative market to international f&b brands.
During the fourth quarter of 2021, two international f&b brands, Subway and Paris Baguette, have finally landed their footprint in Indonesia, with the opening of their first store in Cilandak Town Square and ASHTA District 8 respectively.
Following the requests from retailers to lift the social restrictions at shopping malls, Children’s play area in Jakarta retail centers were permitted to re-open from October 2021, with the application of strict health protocols, including limiting the overall number of visitors. The ease of the policy has had a positive impact on the Jakarta retail center’s ‘footfall’, which continues to increase following the decline of the daily new COVID-19 cases in Jakarta.
Pricing: Price Remained Unchanged Since the Onset of the Pandemic
Average rental and service charge levels remained unchanged since the first PSBB restrictions were imposed in Jakarta. Given the current unstable pandemic condition, no landlords denoted a plan to increase their rental rate within the short-term period.
On a case-bycase basis, some tenants in major retail centers who are doing well have been back to their normal rent, whilst those who are still striving to bear up the pandemic impact are still granted rental abatement or agreed payment deferment, but in a relatively less amount. This situation is expected to continue at least until the pandemic is considerably under control.
Debotabek Retail H2 2021
Supply: Opening of Two Retail Centers at the Beginning of H2 2021
At the beginning of H2 2021, the Debotabek area saw the addition of two new retail centers, namely the extension of Margo City in Depok and Citywalk Elvee in Tangerang. The completion of these two new retail centers brought the total supply of retail center space in Debotabek area to 2,684,300 sqm. After being hampered with the implementation of emergency public activity restrictions (PPKM Darurat) in July 2021, visitor traffic has significantly increased in malls across the Debotabek area in November until the end of the year, though it has not returned to the prepandemic level yet.
A few major retail centers which were previously scheduled for opening in 2021 are expected to be completed in the first half of 2022, including Paradise Walk Serpong, Greenwalk Mall Bekasi, Garden Grove Orange County, and Omotesando Bintaro. If these retail centers are completed within the expected time, the cumulative retail space in Debotabek area will reach 2,760,200 sqm by the end of 2022.
Demand: Fast Fashion Retailers as the Replacement of the Shuttered Anchor Tenants
The impact of the outbreak which led to the closure of Giant & Centro during the H1 2021 and the modest occupancy rates of newly completed retail centers in Debotabek area have brought down the average occupancy rate in Debotabek area to 75.9%, a decrease by 2.6% since in the last year. Regardless of the pandemic, fast fashion retailers, Uniqlo and Max Fashion, continue their expansion in Debotabek area with the opening of new stores in Bintaro Jaya Xchange, Botani Square Mall, Grand Metropolitan Mall, and Margocity.
Most of these new stores occupy the vast vacant spaces left by anchor tenants (e.g. department store / supermarket) which have to shut down their businesses during the pandemic.
