COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Eko Arfianto
Senior Manager | Research | Jakarta
+6221 3043 6726
Eko.Arfianto@colliers.com LEISURE AND ENTERTAINMENT RETAILERS TO LEAD
DEMAND IN 2019

2018–21
Summary & Q4 2018 Full Year 2019 Annual Average
Recommendations > We expect the F&B, sports, fashion, 0.3% 0.9% 1.3%
entertainment and household appliance
Retail demand is increasingly
segments will continue to generate demand
coming from millennia's, Demand for retail space, at least until the end of 25,205sq m 122,039sq m 84,869sq m
according to the Indonesian 2019.
Shopping Centre Management
Association. This huge potential > We forecast around 600,000 sq m of new 0.6% 3.8% 2.1%
market is a chief opportunity for retail space in JaBoDeTaBek through 2021,
retailers, and both landlords and pushing total supply to 7.8 million sq m by
the end of 2021. This is a 8.2% increase, 40,000sq m 276,000sq m 158,690sq m
retailers must adapt to the Supply
characteristics that attract this compared with the current supply.
market segment including using Annual Average
social media to introduce QOQ / YOY / Growth 2018–21 /
products. End Q4 End 2019 End 2021

To catch up with this dynamic

market, landlords need to > We estimate JaBoDeTaBek’s vacancy rate to 0.2% 2.3% 0.6%
downsize their underperforming register around 18.8% from 2019 to 2020. A
large addition of retail spaces will push the
anchor tenants and shift their Vacancy 16.9% 19.2% 18.5%
vacancy rate to around 19.5% in 2021.
tenant balance to focus on selling
fashion products and cosmetics. > We expect rents in Jakarta and the greater
Jakarta area will grow slowly in the next -0.3% 0.8% 1.1%
Additionally, we recommend
three years. Rent is estimated to grow by
adding more specialty stores and
around 2% in 2021, compared with that in IDR500,428 IDR504,439 IDR509,453
F&B as favorable additions to Rent 2018.
draw more people into malls.
Source: Colliers International. Note: JaBoDeTaBek refers to the greater Jakarta area; rents are per square meter per month; USD1 to IDR14,481 as of end-Q4 2018;
1 sq m = 10.76 sq ft
COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

RETAILERS ARE STILL EXPANDING Vacancy rate in Jakarta and the Greater Jakarta area

In our view, the weakening offline stores’ sales volume was mainly due to 30%
the slow-moving economy and changes in lifestyle. Nowadays, the amount
25%
of savings is increasing and consumers are more focused on buying for their
primary needs. We still believe there will be many people visiting the malls 20%
in the coming years and the mall concept will still be relevant in the future,
particularly for most Jakartan’s who perceive shopping malls as leisure 15%
destinations.
10%
Malls may evolve and change their function from just a place for shopping,
5%
to also a meeting point for business activities. Visitors will still look for
different experiences when coming to the mall, and therefore malls that are 0%
innovative and dynamic will always be interesting.

2020E
2019E

2021E
2010

2011

2012

2013

2014

2015

2016

2017

Indonesia’s long-term economic projection along with the massive
population have lured the attention of some local and foreign retailers to
continue expanding in Indonesia. For example, attracted to the high market
potential, Decathlon Sports Indonesia, a French retailer, plans to open 100
outlets through 2027. Decathlon Indonesia, working with several local
companies to produce local products, also offers the concept of meeting
venues for sporting-related activities by providing outlets that are adjacent
to sports field.
Meanwhile, PT Miniso Lifestyle Trading Indonesia (Miniso) has become the
most expansive retailer in Indonesia. Since it arrived in December 2016,
Miniso has opened around 140 outlets through 2017. Afterwards, Miniso
aims to open again 100 stores in Indonesia. Also expanding, Hennes &
Mauritz AB (H&M) inaugurated its 30th store, coinciding with the fifth
anniversary of its presence in Indonesia.
Although some retailers actively expand, some are concerned about the
weakening rupiah and the effect of a revised tax on imported commodities.
Quoting a survey conducted by Bank Indonesia, retailers expect a build-up of
inflationary pressures, as indicated by an increase in the Price Expectation
Index in the first months of 2019. This situation may lower the revenue of
retailers, which could push landlords to be more negotiable on rent.
Recently, landlords began to provide several incentives such as revenue-
sharing, free rent periods and longer grace periods, especially for newly
operating shopping centres.
2
2018
Jakarta Greater Jakarta
Source: Colliers International
Jakarta
Compared to 2017, occupancy was relatively stable in Jakarta throughout
2018. Some store closures pushed the occupancy rate in H2 2018 down 0.3
pps to 83.6%. Considering the supply projection in 2019, we expect average
occupancy in Jakarta to decline to around 82%. We expect the vacancy rate
will go up by 3 pps to register at 20% in 2019 before dropping to 16% in
2021.
Greater Jakarta
In Q4 2018, occupancy dropped modestly by less than 1 pps to 82.5%. As
Pesona Square shopping mall came online, the overall occupancy rate
declined because the mall is not yet fully operational, with some tenants still
fitting-out. With about 130,000 sq meters of space in the pipeline, we
expect the occupancy rate in the greater Jakarta area to drop by 1.5% in
2019.
COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Jakarta and the Greater Jakarta area’s cumulative supply MEAGRE SUPPLY IN 2018 WITH
6,000,000
5,000,000
FLAT OCCUPANCY COSTS
4,000,000 Supply
3,000,000 Jakarta saw no new supply in 2018, thus the total retail space remains at
4.65 million sq meters. There are seven shopping centres planned from 2019
2,000,000 to 2021, and at least five of those are already under construction as of Q4
1,000,000 2018. In 2019, three of the future malls will be ready for operation.

0 In Jabodetabek, we expect total supply to reach 2.75 million sq m in the next

three years from the completion of four projects with a total of 160,000 sq

2013

2014
2010

2011

2012

2015

2016

2017

2018

2019E

2020E

2021E
meters space. Pesona Square shopping mall in Depok was the only new
supply in 2018. With an NLA of around 40,000 sq m, this increased supply by
Jakarta Existing Supply Jakarta Annual Supply 1.6%, bringing the cumulative supply to 2.59 million sq m. We expect a few
Greater Jakarta Existing Supply Greater Jakarta Annual Supply projects to be completed in 2019, but this will decline in 2020, and we
expect no new supply in 2021. We expect the limited future supply to help
Source: Colliers International
maintain occupancy performance.

The average rent and service charge (per sq m/month) in Jakarta and Occupancy Costs
the Greater Jakarta area Average rent in Jakarta was IDR617,920 in Q4 2018 and only grew by 1.2%
YOY, lower than the annual growth of over 4% recorded from 2012 to 2017.
IDR700,000 The market is not poised to see large increases in rents, and we forecast
IDR600,000 rents to grow moderately to IDR625,076 in 2019. Landlords of new shopping
IDR500,000 centres are more focused on improving occupancy to gain more committed
IDR400,000 tenants, particularly in the first three to five years of operation.
IDR300,000 The first three quarters in 2018 were marked with relatively unchanged
IDR200,000 rental tariff. When the newly operating shopping centres came on stream in
Q4 2018, it offered fairly lower tariff than the average market, and thus the
IDR100,000
overall rent in greater Jakarta was corrected by 0.9%, bringing the average
IDR0 to IDR382,936. Going forward, rent in 2019 will be generally stable and only
2019E

2020E

2021E
2010

2011

2012

2013

2014

2015

2016

2017

2018

up by 2%.
The maintenance tariff was relatively flat in the first semester, but in Q4
Jakarta Rent Greater Jakarta Rent 2018 was IDR107,957, an increase of 6.3% YOY. The minimum wage
Jakarta Service Charge Greater Jakarta Service Charge
regulation might increase by around 8% in 2019, which could be the basis to
increase the tariff by 4% next year.
Source: Colliers International
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COLLIERS QUARTERLY RETAIL | JABODETABEK
JABODETABEK || RESEARCH
RESEARCH || Q4
Q4 2018
2018 || 99 JANUARY
JANUARY 2019
2019

APPENDIX

New Pipeline

Shopping center Location Region NLA (sq m) Developer Development Status

Jakarta

2019
Wahana Sentra Sejati
New Harco Plaza Glodok West Jakarta 60,000 Under construction
(Agung Podomoro Land)
Mal Taman Anggrek
S. Parman West Jakarta 30,000 Mulia Indoland Under construction
(Extension Project)
Holland Village Mall Cempaka Putih Central Jakarta 56,000 Lippo Karawaci Tbk Under construction

2020
AEON Mall Tanjung Barat
Lenteng Agung South Jakarta 39,200 Sinarmas Land & Aeon Under construction
(within Southgate)

2021

Menara Jakarta Shopping Mall Kemayoran Central Jakarta 151,560 Agung Sedayu Permai Under Construction

Pondok Indah Mall 3 Pondok Indah South Jakarta 70,000 PT Metropolitan Kentjana In Planning

Daan Mogot City Daan Mogot West Jakarta 28,000 China Harbor In Planning

continued

4
COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Space occupied
Shopping Center Tenant Industry Area City Opening time
(sq m)
continued

Revo Town Ace Hardware Home Furnishing 2,000 Bekasi Bekasi H2 2018

Grand Galaxy H&M Fashion 2,000 Bekasi Bekasi H2 2018

CBD,
Plaza Indonesia H&M Fashion 4,100 Central Jakarta H2 2018
Thamrin
Pesona Square H&M Fashion 2,000 Depok Depok H2 2018

Pesona Square Uniqlo Fashion 2,500 Depok Depok H2 2018

CBD,
Senayan City Uniqlo Fashion 2,500 Central Jakarta H2 2018
Senayan
Summarecon Mal
Marks & Spencer Fashion 650 Serpong Tangerang 2019
Serpong 1
West
Mal Taman Anggrek ZARA Fashion 500 Slipi 2019
Jakarta
Transpark Cibubur H&M Fashion 4,100 Cibubur Depok 2020
Source: Colliers International

5
COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Occupancy Occupancy rates in Greater Jakarta by region

Occupancy rates in Jakarta by mall grade 2017 Q3 2018 2018 QOQ YOY

2017 Q3 2018 2018 QOQ YOY Bogor 83.6% 84.9% 82.3% -2.6% -1.3%

Premium 94.6% 91.3% 91.3% 0.0% -3.3% Depok 88.9% 87.4% 78.2% -9.2% -10.7%

Middle Upper 88.8% 89.8% 89.8% 0.0% 1.0% Tangerang 81.3% 82.8% 79.7% -3.1% -1.6%

Middle 82.8% 81.8% 81.8% 0.3% -0.7% Bekasi 79.7% 81.6% 77.7% -3.9% -2.0%

Middle Lower 74.5% 75.8% 75.8% -0.2% 1.1% Source: Colliers International

Source: Colliers International Rents

Occupancy rates in Jakarta by sub-market Average rents in Jakarta by mall grade (in IDR/sq m/month)

2017 Q3 2018 2018 QOQ YOY 2017 Q3 2018 2018 QOQ YOY

CBD 86.9% 85.2% 85.1% -0.1% -1.8% Premium 1,416,404 1,416,404 1,416,404 0.0% 0.0%

South Jakarta* 87.3% 87.0% 86.8% -0.2% -0.5% Middle-Up 769,807 783,127 783,127 0.0% 1.7%

Central Jakarta* 68.8% 68.9% 68.4% -0.5% -0.4% Middle 453,979 462,826 462,826 0.0% 1.9%

North Jakarta 86.7% 87.9% 87.1% -0.8% 0.4% Middle Low 282,755 282,755 282,755 0.0% 0.0%
Source: Colliers International
West Jakarta 81% 80.9% 80.8% -0.1% -0.2%

East Jakarta 76.2% 78.1% 79.9% 1.8% 3.7%

Source: Colliers International

*excluding CBD

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COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Average rents in Jakarta by sub-market (in IDR/sq m/month) Service charge

Average service charge in Jakarta by mall grade (in IDR/sq m/month)
2017 Q3 2018 2018 QOQ YOY

2017 Q3 2018 2018 QOQ YOY

CBD 891,726 891,726 891,726 0.0% 0.0%

South Jakarta* 624,305 641,346 641,346 0.0% 2.7% Premium 203,826 206,393 206,393 0.0% 1.3%

Central Jakarta* 367,026 386,955 386,955 0.0% 5.4% Middle-Up 152,910 155,106 160,483 3.5% 5.0%

North Jakarta 478,692 478,692 478,692 0.0% 0.0% Middle 121,973 123,242 126,281 2.5% 3.5%

West Jakarta 599,451 599,451 599,451 0.0% 0.0% Middle Low 87,667 87,667 88,264 0.7% 0.7%
Source: Colliers International
East Jakarta 373,926 373,926 373,926 0.0% 0.0%
Source: Colliers International Average service charge in Jakarta by sub-market (in IDR/sq m/month)
*excluding CBD

Average rents in Greater Jakarta by region (in IDR/sq m/month) 2017 Q3 2018 2018 QOQ YOY

2017 Q3 2018 2018 QOQ YOY CBD 163,062 166,278 166,711 0.3% 2.2%

South Jakarta* 135,333 137,017 141,186 3.0% 4.3%

Bogor 345,338 345,338 345,338 0.0% 0.0%
Central Jakarta* 115,726 117,495 120,519 2.6% 4.1%
Depok 351,106 351,106 330,453 -5.9% -5.9%
North Jakarta 124,946 125,134 126,686 1.2% 1.4%
Tangerang 420,442 422,374 422,374 0.0% 0.5%
West Jakarta 124,184 125,097 135,063 8.0% 8.8%
Bekasi 373,829 373,829 373,829 0.0% 0.0%
Source: Colliers International East Jakarta 112,245 112,245 120,485 7.3% 7.3%
Source: Colliers International
*excluding CBD

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COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Average service charge in Greater Jakarta by region

(in IDR/sq m/month)

2017 Q3 2018 2018 QOQ YOY

Bogor 106,117 119,593 122,163 2.1% 15.1%

Depok 95,841 89,009 90,518 1.7% 5.6%

Tangerang 99,669 102,852 107,856 4.9% 8.2%

Bekasi 108,428 109,338 110,950 1.5% 2.3%

Source: Colliers International

Some selections of Committed Tenants at Shopping Centre in Jakarta and Greater Jakarta Area
Space occupied
Shopping Center Tenant Industry Area City Opening time
(sq m)
Epicentrum Walk Informa Home Furnishing 2,400 CBD, Rasuna Said South Jakarta H1 2018

Epicentrum Walk Ace Hardware Home Furnishing 2,000 CBD, Rasuna Said South Jakarta H1 2018

Senayan City Stradivarius Fashion 600 CBD, Senayan Central Jakarta H1 2018

Senayan City ZARA Fashion 4,000 CBD, Senayan Central Jakarta H1 2018

Cinere Bellevue JYSK Home Furnishing 2,000 Cinere Depok H2 2018

Supermal Karawaci Uniqlo Fashion 900 Karawaci Tangerang H2 2018

Central Park ZARA Fashion 600 Slipi West Jakarta H2 2018

Plaza Senayan ZARA Fashion 1,500 CBD, Senayan Central Jakarta H2 2018

Sunter Mall The Foodhall Supermarket 800 Sunter North Jakarta H2 2018

continued

8
COLLIERS QUARTERLY RETAIL | JABODETABEK | RESEARCH | Q4 2018 | 9 JANUARY 2019

Space occupied
Shopping Center Tenant Industry Area City Opening time
(sq m)
continued

Revo Town Ace Hardware Home Furnishing 2,000 Bekasi Bekasi H2 2018

Grand Galaxy H&M Fashion 2,000 Bekasi Bekasi H2 2018

CBD,
Plaza Indonesia H&M Fashion 4,100 Central Jakarta H2 2018
Thamrin
Pesona Square H&M Fashion 2,000 Depok Depok H2 2018

Pesona Square Uniqlo Fashion 2,500 Depok Depok H2 2018

CBD,
Senayan City Uniqlo Fashion 2,500 Central Jakarta H2 2018
Senayan
Summarecon Mal
Marks & Spencer Fashion 650 Serpong Tangerang 2019
Serpong 1
West
Mal Taman Anggrek ZARA Fashion 500 Slipi 2019
Jakarta
Transpark Cibubur H&M Fashion 4,100 Cibubur Depok 2020
Source: Colliers International

9
Primary Authors: For further information, please contact:
Eko Arfianto Ferry Salanto
Senior Manager | Research | Indonesia Senior Associate Director| Research | Indonesia
+62 21 3043 6726 +62 21 3043 6730
Eko.arfianto@colliers.com Ferry.salanto@colliers.com

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