colliers market report 2q 2013 - retail

RETAIL SECTORresearch & forecast report

www.colliers.com

2Q 2013 i the knowledge

Three shopping centers opened in DKI Jakarta during 2Q 2013 providing 107,100 sq m of retail space (Lotte Shopping Avenue, Cipinang Indah Mall and Pondok Indah Street Gallery) and two centers opened on the outskirt of DKI Jakarta area totaling 96,000 sq m (Summarecon Mall Bekasi and Mall Ciputra Citra Grand). In Jakarta, both occupancy and asking rental rates have been stable. Occupancy only dropped slightly to 87.3% while the average asking rental rate was at IDR469,818/sq m/month.

Supply jakarta

After having no retail supply during the previous quarter, three new retail centres opened in Jakarta during 2Q 2013. Pondok Indah Street Gallery, an extension project of Pondok Indah Mall 1, became the first operational mall in 2Q 2013. Another two retail centres that opened in June this year are Lotte Shopping Avenue and Cipinang Indah Mall. Lotte Shopping Avenue (abbreviated as LOVE) in the Ciputra World 1 Complex at Jalan Satrio provides the largest space in 2Q 2013. All three of these retail centres are offered for lease. The combined retail space from the new retail addition this quarter amounted to 107,100 sq m, bringing the cumulative supply in Jakarta to 4.25 million sq m in 2Q 2013. This figure suggests a growth in cumulative supply by 5.5% y-o-y. In fact, this is not going to be the last retail addition for 2013 as we anticipate 181,200 sq m of retail space to enter the market at the end of 2013, which will be contributed by two projects, i.e. Green Bay Pluit and St. Moritz.

For the last three years, East and South Jakarta together with the Central Business District have been the main contributors of retail space. South Jakarta has been supplying retail space since 2010 while no new retail space was available in the CBD and East Jakarta in 2011. From 2011 to 1H 2013 there was no new retail space available in North, West or Central Jakarta. Only in the second half of this year, will the North and West see new retail centres entering the market. Since 2009, when four strata-title centres came onto the market, there were no sizeable strata-title retail center in Jakarta. This has widened the gap between the amount of retail space for lease and strata-title retail space for sale. Up to end 2012, the retail centres for lease (generally called shopping malls) dominated with 66%. The domination of retail space for lease would continue in the future given that all upcoming shopping centres until 2016 will be for lease.

annual retail space supply in jakarta during 2013 - 2016

Colliers International Indonesia - Research

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new shopping centres pipeline in jakarta

shopping centres name location regionnla

(sq m)status

2013 The Baywalk @Green Bay Pluit Pluit North Jakarta 52,000 Under ConstructionSt. Moritz Puri Indah West Jakarta 129,200 Under Construction

2014Mal Puri Indah (extension) Puri Indah West Jakarta 3,000 Under ConstructionMal Kelapa Gading III (extension) Kelapa Gading North Jakarta 6,000 Under Construction

2015Pantai Indah Kapuk Mall Pantai Indah Kapuk North Jakarta 30,000 Under ConstructionCentral Park Mall (extension) S. Parman West Jakarta 40,000 Under ConstructionGrand Cipulir Cipulir South Jakarta 40,000 Under Planning

2016Shopping Mall @Pancoran Pancoran South Jakarta 8,000 Under ContructionMal Puri Indah 2 Puri Indah West Jakarta 75,000 Under PlanningHolland Village Mall Cempaka Putih Central Jakarta 50,000 Under PlanningMall @The City Center KH Mas Mansyur Central Jakarta 65,000 Under Planning


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annual retail space supply in bodetabek during 2013 - 2016


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Bogor Depok Tangerang Bekasi

Greater Jakarta include cities surrounding Jakarta, i.e. Bogor, Depok, Tangerang and Bekasi, commonly abbreviated as BoDeTaBek.

When comparing the retail supply structure of Jakarta and BoDeTaBek during 2013 - 2016, it

is revealed that BoDeTaBek or the Greater Jakarta area has more retail centre projects than Jakarta. However, since retail projects in Jakarta built during that period are generally bigger, Jakarta will have more retail spaces than the BoDeTaBek area.

colliers international | p. 2

jakarta | 2q 2013 | retail

During 2Q 2013, two shopping centres officially opened in the Bekasi region of Greater Jakarta. Despite located in the Cibubur area (known as the southern area of Jakarta), Mal Ciputra Citra Gran is geographically located in the Bekasi region. Mal Ciputra Citra Gran was small mall but was being revamped and extended to become a bigger mall offering a new tenancy mix and more attractive façade design. Another mall located in the city of Bekasi that opened this quarter is Summarecon Mall Bekasi. The total combined space from these two malls is 96,000 sq m, bringing the cumulative retail space supply in BoDeTaBek to 2.03 million sq m. Of this, Bekasi and Tangerang provide the most space in the Greater Jakarta area, at 35 and 37%, respectively. As mentioned in the previous report, all new shopping centres in 2013 will be in Bekasi. The total annual retail supply projection for this year

will be 210,285 sq m, the largest annual supply since 1990. From 2014 to 2016, Bekasi will continue to contribute new retail supply in the BoDeTaBek area, which includes Lippo Cikarang and AEON Mall Deltamas and Bekasi Trade Centre (part of an integrated development in East Bekasi called BTC City).

In Tangerang, after having no new retail space in 2013, there will be 164,300 sq m of new supply in 2014 which is the highest annual supply since 1990. No new retail centres are projected to enter the market in Tangerang in 2015 - 2016 so far. On the contrary, both Bogor and Depok will see a very limited number of retail projects between 2013 and 2016. Only in 2014 will these two regions have one project completed in each area.

new shopping centres pipeline in bodetabek

shopping centres name location regionnla

(sq m)status

2013Grand Metropolitan Mall Kalimalang Bekasi 47,285 Under ConstructionGrand Galaxy Mall Bekasi Bekasi 23,000 Under Construction

2014The Breeze Sinar Mas Land Serpong Tangerang 24,300 Under ConstructionBintaro Xchange (within Bintaro Lifestyle Centre) Bintaro Tangerang 45,000 Under ConstructionCinere Bellevue Suite (Urbana Cinere) Cinere Depok 28,000 Under ConstructionCibinong City Centre Cibinong Bogor 40,000 Under ConstructionLippo Cikarang Citywalk (phase II) Cikarang Bekasi 8,000 Under PlanningAEON Mall BSD City Serpong Tangerang 75,000 Under Planning

2015Deltamas Mall Deltamas Bekasi 40,000 Under PlanningCimone City Mall Cimone Tangerang 20,000 Under Planning

2016Bekasi Trade Center 2 Bekasi Bekasi 56,000 Under Planning


p. 3 | colliers international


Demand absorption in jakarta

In 2Q 2013, the occupancy level dropped somewhat to 87.3% from 88.9% last quarter. Tenant relocation or movement, particularly in old shopping centres, characterised the decline in occupancy. Apart from vacated space during the quarter, some shopping centres in Central and South Jakarta counterbalanced the situation by registering new leasing activities. For example, Mall Kota Kasablanka and Lippo Mall Kemang, both of these new malls only experienced less than 10% vacancy of the total available space. Another similar case is at Plaza Kalibata (previously known as Kalibata Mall) where some Food & Beverage retailers are new tenants which helped to raise the overall occupancy rate. In order to further boost the performance, Plaza Kalibata completed some renovation work and is allocating the remaining space for gadget and computer retailers. Other leasing activity was reported by Cilandak Town Square, which welcomed new local, tenants such as Mariki Raja Konro, Chicken and Egg, Pepper Lunch and Djournal Coffee.

In North Jakarta, Mall of Indonesia in the Kelapa Gading area has acquired some new tenants such as Rock Star Gym and Nano Reflexy and opened during the quarter. Likewise, in the same area, Mall Artha Gading has agreed to lease a sizeable vacant space to a non-retail tenant, which converted it into a function hall. This has helped fuel occupancy in Mall Artha Gading because, at the same time, several tenants like American Giant Mattress, Cassamoda and Amazon Soft Play also opened during the quarter.

Kuningan City, which has been in operation since 2011, has gathered a number of new tenants like the line-up of branded fashion retailers which have just opened stores, such as Lacoste, Guess, Versace Jeans, Wallis, Watch 2 Zone and luggage retailer, Samsonite. In addition to that, Hangaga, a restaurant originating in Korea, also occupies recently.

LOVE, which just recently opened this quarter, has introduced the first Uniqlo outlets in Indonesia. Some other new brands open in LOVE are H&M, Samwon Garden and Seri Salon from Korea, together with other branded retailers. The invasion of overseas branded retailers to the Indonesian market will continue in the future. Uniqlo, the Japan-based fashion retailer, is aiming to broaden their market share in Indonesia by having more stores in the Kelapa Gading and S. Parman areas. Swedish retailer, H&M, is also intending to open two stores in Jakarta at Gandaria City some time in 3Q 2013 and their largest flagship store will be at Grand Indonesia next year. The overall performance of shopping centres in East Jakarta is easily affected when a new shopping centre comes in because number of shopping centres in the area is the limited. The operation of Cipinang Indah Mall has affected the occupancy rate in East Jakarta, which decreased by 9% q-o-q. The number of committed tenants in Cipinang Indah Mall is high but big tenants like Ace Hardware, Electronic City and XXI have not officially opened during the quarter.

cumulative supply, demand and occupancy rates in jakarta


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In the BoDeTaBek area, the occupancy level was up moderately from 85.7% in 1Q 2013 to 85.9% in 2Q 2013 which suggests that the market has been relatively stable. The outgoing and incoming tenants during the period were in a state of equilibrium. Before officially re-opened this quarter, Mall Ciputra Citra Gran secured two anchor tenants, i.e. Hypermart and Matahari, which have been operating since late 2012. As of the second quarter, the mall only have limited vacant space to offer because most of the space has been committed to. Similarly, as a newly launched mall, Summarecon Mall Bekasi has secured some major tenants such as Star Department Store, XXI The Premiere, The Food Hall, Ace Hardware and Best Denki. Nevertheless, despite high pre-committed leasing, the physical occupancy in both malls was relatively low because not all of the tenants opened during the reviewed quarter. As a result, the average occupancy rates in Bekasi slipped around 5% QoQ. With other shopping centres like Bekasi

Square and Mega Bekasi maintaining their good performance, the occupancy in Bekasi is 79%. In Tangerang, two operating retail centres in Jalan Sudirman, i.e. Tangerang City and Mall Bale Kota, continued to show better performance. Mall Bale Kota acquired major brands like leading bookstore Gramedia, and Ace Hardware in complementing the existing big tenants like Matahari and Hypermart. In addition to that, cinema chains, like XXI, will also open after the Islamic holiday season in mid-August of this year. The performance of the Mall at Alam Sutera moved Tangerang’s occupancy level up by 4.4% to 83.6% QoQ.

The Depok and Bogor regions showed relatively flat occupancy performance QoQ. Only shopping centres in Depok, like Margo City and Depok Mall showed dynamic activity that lifted the overall occupancy level modestly to 88.2%. In Bogor, the occupancy level was steady at around 89%.

absorption in bodetabek

cumulative supply, demand and occupancy rates in bodetabek


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A number of new shopping centres have been entering the Jakarta market. However, this should not affect the performance of the retail market in Jakarta because most of the newly built and under-construction shopping centres have secured high pre-committed absorption. Two shopping centres are projected to operate later 2013, i.e. Green Bay Pluit and St. Moritz. Both have recorded pre-committed occupancy levels of above 80%. Furthermore, finding new retail space would be very difficult in 2014 because there will be limited new space from the extension of two projects in Kelapa Gading

and Puri Indah. As per 2Q 2013 alone, a number of F&B retailers have committed to occupy space in those locations. Of the total 288,300 sq m of retail space available in 2013, around 266,040 has been absorbed, making searching for retail space this year very difficult. It will become tougher next year when there will be only 9,000 sq m of new retail space. The same will occur in 2015, when retail supply in 2015 is considered limited.

pre-committed occupancy

p. 5 | colliers international


annual retail supply and amount of absorbed space as of 2q 2013 in jakarta

Colliers International Indonesia - Research0

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Absorbed Supplys q m

As reported earlier, two malls in BoDeTaBek, in Bekasi, namely Grand Metropolitan and Grand Galaxy will open later in 2013. Before they are in operation, these malls have secured several major tenants. Other future malls scheduled to be in operation in 2014, like Cinere Bellevue,

Bintaro Xchange, The Breeze, Cibinong City Center, Cimone City and AEON Mall, have secured several tenants. Cimone City Mall alone has confirmed that Lotte Mart will become the anchor tenant and occupy 8,000 sq m in the mall.

annual retail supply and amount of absorbed space as of 2q 2013 in bodetabek


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list of committed tenants

shopping centres nameyear

completioncommitted major tenants

jakartaKota Kasablanka 2012 SOGO, Ace Hardware, Cinema XXI, Electronic Solution, Kem Chiks, Carrefour, Informa, Toys

Kingdom, Muji Store, Marks & Spencer, Family KaraokeKemang Village 2012 SOGO, Debenhams, Zara, Next Boutique, Marks & Spencer, Hypermart, Ace Hardware,

Fitness First, Platinum, Cinema XXI, Chipmunks Playland and Cafe, Best DenkiCiputra World Jakarta 1 2013 Lotte Department Store, Ranch Market, Fitness First, Cinema XXI, Hero SupermarketSt Moritz 2013 Debenhams, Matahari, Hypermart, Electronic City, Cinema XXI, Ranch Market, Sea World

Indonesia, Parkson, Fitness Firstcontinued



shopping centres nameyear

completioncommitted major tenants

Cipinang Indah Mall 2013 Carrefour, Ace Hardware, Electronic City, Cinema XXIThe Baywalk @Green Bay Pluit 2013 Ace Hardware, Cinema XXI, Farmers Market, Electronic Solution, Informa, Time Zone, Toys

Kingdom, Home Solution,, GOld’s Gym

bodetabekMall at Alam Sutera 2012 SOGO, The Food Hall, FunWorld, Gramedia, Cinema XXI, Chipmunks Playland and Cafe,

Electronic Solution, Home Solution, GiantMall Balekota 2012 Hypermart, Electronic Solution, Ace Hardware, Gramedia, Informa, XXI, Matahari, Toys

Kingdom, AmazoneGrand Metropolitan 2013 Centro, Farmers Market, Toys Kingdom, FunWorldCiputra Mall CitraGran 2013 Matahari, Hypermart, Gramedia, Farmers Market, Best Denki, Time ZoneSummarecon Mall Bekasi 2013 Star Department Store, Cinema XXI The Premiere, The Food Hall, Ace Hardware, Best DenkiGrand Galaxy 2013 Blitz Megaplex, Farmers Market, LotusBekasi Junction 2013 Lotte Supermarket, 21 CineplexBintaro Xchange 2014 Farmers Market, Best Denki, RockStar Gym, Frigo Ice SkatingCibinong City Center 2014 Carrefour, FunWorldThe Breeze 2014 Gold’s Gym, Chipmunks PlaylandCimone City Mall 2014 Lotte MartCinere Bellevue 2014 Hypermart


During the quarter, the average asking rental rates in Jakarta only recorded a minor increase QoQ. The average rental rate was, on average, IDR469,818/sq m/month. Most shopping centres generally maintained the same rental rate as in the last quarter. Only in North Jakarta, three shopping centres, i.e. Mall Kelapa Gading, La Piazza and Mall of Indonesia, have adjusted the rent due to the adjustment in the pegged

rates and increasing occupancy. With the increase, the average asking rental rates in North Jakarta moved upward by 3.8% QoQ to IDR331,281/sq m/month. In BoDeTaBek, the average asking rental rates were relatively stable at IDR282,078/sq m/month in 2Q 2013.

average asking rental rates & Service Charge average asking rental rates in jakarta


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colliers international indonesia:

World Trade Centre 10th & 14th floorsJalan Jenderal Sudirman Kav. 29 - 31Jakarta 12920Indonesiatel 62 21 521 1400faX 62 21 521 1411

482 offices in 62 countries on 6 continentsUnited States: 140Canada: 40Latin America: 20Asia Pacific: 195EMEA: 85

• $2.0 billion in annual revenue 2012

• 1.1 billion square feet under management

• Over 13,500 professionals

Copyright 2012 Colliers International

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inac-curacies. Readers are encouraged to consult their pro-fessional advisors prior to acting on any of the material contained in this report.

www.colliers.com

Accelerating success.

Michael Broomell Managing Director

World Trade Centre 10th & 14th floorsJalan Jenderal Sudirman Kav. 29 - 31Jakarta 12920Indonesiatel 62 21 521 1400 ext 131faX 62 21 521 1411

Ferry SalantoAssociate Director, Research

World Trade Centre 10th & 14th floorsJalan Jenderal Sudirman Kav. 29 - 31Jakarta 12920Indonesiatel 62 21 521 1400 ext 134faX 62 21 521 1411Email: [email protected]

Meanwhile, since the new electricity tariff was introduced in early 2013, the average maintenance cost for retail space in Jakarta continued to increase, by 8.4% in 2Q 2013. This growth brought the maintenance cost to IDR87,655/sq m/month or 3.4% higher than

last quarter. Yet, there is no significant increase in the BoDeTaBek area. After an increase of 2.8% last quarter, the service tariff this quarter only moved slightly to IDR63,179/sq m/month.

average asking rental rates in bodetabek


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Outlook Jakarta with projected and limited retail supply in the years ahead would appeal retailers to move to greater Jakarta area as their next expansion target. Not only because of the limitation in the amount of shopping space but also because parts of Greater Jakarta, like Serpong or Alam Sutera, have grown as middle- to upper-class residential areas with good populations for retail development. We have seen that foreign retailers are planning to open new stores IKEA in Alam Sutera and AEON in BSD. Not only are retailers expanding, mall developers are also introducing new malls, like in Bintaro, Taman Galaxy, BSD and Lippo Cikarang.

In maximising the existing development, two trends are seen in the market. The existing shopping mall owners are expanding their developments by building small retail spaces for F&B retailers in the Kelapa Gading, Puri and Pondok Indah areas. They are also integrating the existing retail development into hotels, which can be seen at Puit Junction and Pusat Grosir Cililitan (PGC) with a new budget hotel; Mall Balekota with a 4-star hotel; Tangcity Mall; Sports Mall with the Santika Hotel; and Tebet Green with the Santika Hotel.


colliers market report 2q 2013 - retail

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