Colliers Quarterly 311216 JAKARTA & GREATER JAKARTA RETAIL Accelerating success. Retail Sector Ferry Salanto Senior Associate Director Research In general, the performance retail market is relatively stagnant with limited demand. Occupancy continued to decline in the short-term due to the influx of new shopping centres. The F&B retailers continued to underpin the major demand for retail space. Rental rates is projected to grow marginally. A slightly upward adjustment will occur at the upper class shopping centres. Going forward, the occupancy rate is forecasted to gradually improve given a limited additional supply over the next few years. Forecast at a glance Supply Cumulative supply grew 2% YTD and stood at 4.54 million in. Retail space in continues to be limited until the end of 217. The growth in supply was also lower in the BoDeTaBek area, which will see a future supply larger than that in. Cumulative supply remained at 2.4 million. Demand A relatively stable occupancy of above 8% was generally underpinned by the work of F&B tenants both in and BoDeTaBek. Newly operating malls seemed to continue to secure spaces between 5, and 8, in size when they first started operating. Occupancy The overall occupancy decreased 1.1% QoQ to 84.9%. Limited future supply and a high number of committed tenants in newly operating malls give a fair forecast that occupancy would stabilise by the end of 216. Supply As of Q3 216, the soft opening of PIK (Pantai Indah Kapuk) Avenue Mall and Neo SOHO Mall brought the cumulative supply to 4.54 million, showing a modest growth YoY. Including Bassura City Mall, has provided three new shopping centres in 216 YTD. is still expecting the small retail centre, Shopping Mall at Pancoran, South, to begin operation at the remainder of 216. Most future shopping centres are currently in the planning stages. We only recorded two shopping centres being constructed at the moment. They are Aeon Mall Garden City and Neo Harco Plaza. Several developers have also announced their future projects, such as Intiland (Kebon Melati Superblock), Agung Sedayu (Menara ), Grand Dhika Daan Mogot (Adhi Karya) and Daan Mogot City (China Harbour). All these future projects are expected to start construction in 217. Cumulative Supply of Retail Space in 5,, 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Existing Supply Annual Supply Supply YTD Future Supply 216F 217F 218F 219F Rent Average asking rent is projected to increase because some middle-upper class shopping centres are reviewing their current asking rents in preparing for further adjustments. With the expected market improvement, several landlords are reviewing to relayout tenancy mix in order to attract more people and charge higher rents.
Annual Retail Supply in 2, 15, 1, Whilst retail space supply in the CBD area and Central did not progress, other areas have been actively supplying additional spaces since. Upon opening PIK Avenue Mall, the total supply in North remained as the highest as of Q3 216. East is still the lowest area with shopping centre population or only recording around 3% of the total supply in North. Going forward, Central, West and East are expected to become major contributors of the future supply until 22. 5, Cumulative Supply Based on Area in West Cumulative Supply Based on Marketing Scheme in Annual Supply Supply YTD Under Construction In Planning 3,5, 3,, 2,5, 2,, 216F 217F 218F 219F East North South Central CBD 2, 4, 6, 8, 1,, Cumulative Supply 216YTD Future Supply in 216F - 219F 1,5, 1,, 5, For Lease For Sale 216F 217F 218F 219F Greater The cumulative supply remained at 2.4 million and grew very moderately YoY. Two retail centres are pursuing completion work to achieve their target opening at the end of 216. Despite anticipating a modest growth in supply in 217, BoDe- TaBek will see around 74, of new retail space until 219. Apart from the 216-217 supply, most of the upcoming shopping centre projects in BoDeTaBek are in the planning stages, and only 46% of the total future supply is under construction as of Q3 216. About 68% of the total retail spaces or around 3.1 million are offered for lease. There are 88 existing shopping centres for lease in. Meanwhile, the total existing number of stratatitle shopping centres (known as trade centres) was recorded at 1.44 million as of Q3 216. For the last couple of years, trade centre development has become less popular, since some of these projects are not performing well. 2 Colliers Quarterly 311216 & Greater Retail Colliers International
Cumulative Supply in Greater (BoDeTaBek) 3,, Cumulative Supply Based on Area in Greater (BoDeTaBek) 2,5, Bekasi 2,, 1,5, Tangerang 1,, Depok 5, Bogor Existing Supply Annual Supply Supply YTD Future Supply The BoDeTaBek area is expecting to see larger future supply (almost 6, ) in 218-219. These include two future projects by Aeon in Sentul and Deltamas, Plaza Indonesia Jababeka and a huge project by Lippo Group in Karawaci. Most future shopping centres will provide spaces over 5,, which will contribute 6% of the total supply in BoDeTaBek in 218-219. Annual Retail Supply in Greater (BoDeTaBek) 35, 3, 216F 217F 218F 219F 3, 6, 9, 1,2, Cumulative Supply 216YTD Future Supply in 216-219F As of Q3 216, strata-title retail spaces for sale made up only 32% of the total supply, but BoDeTaBek will still see future strata-title shopping centres. Bekasi Trade Centre 2 and Vivo Sentul Trade Mall (within Cimandala City) will provide 69, additional retail space for sale in 216-219. Cumulative Supply Based on Marketing Scheme in Greater (BoDeTaBek) 2,5, 2,, 25, 2, 1,5, 15, 1, 1,, 5, 5, 216F 217F 218F 219F For Lease For Sale 216F 217F 218F 219F Annual Supply Supply YTD Under Construction In Planning Most future retail space in greater area will be contributed by Bekasi region, contributing 43% of the total future supply from 216 to 219. There will be eight new shopping centres in Bekasi during that period. 3 Colliers Quarterly 311216 & Greater Retail Colliers International
New Supply Pipeline shopping centre location region nla () developer development Status jakarta 216 Shopping Mall @ Pancoran Pancoran South 8, Agung Podomoro Under Construction 217 New Harco Plaza Glodok West 6, Agung Podomoro Under Construction 218 Aeon Mall Garden City Cakung East 71, Aeon Under Construction Mall @ Green Pramuka City Pramuka North 3, Duta Paramindo Sejahtera In Planning Mal Puri Indah 2 Puri Indah West 5, Antilope Madju Puri Indah In Planning Shopping Mall at Podomoro Park Buaran East 4, Agung Podomoro In Planning 219 Grand Metro Cipulir Cipulir South 3, Priamanaya In Planning Pondok Indah Mall 3 Pondok Indah South 6, Metropolitan Kentjana In Planning bodetabek 216 Bekasi Trade Center 2 Bulak Kapal Bekasi 56, Gapura Prima Under Construction Q Big BSD City Tangerang 69, Sinarmas Land Under Construction 217 Grand Dhika City Mall Bekasi Bekasi 24, Adhi Persada Realty Under Construction 218 Vivo Sentul Lifestyle Cibinong Bogor 2, Megapolitan Under Construction Vivo Sentul Trademall Cibinong Bogor 13, Megapolitan Under Construction Plaza Indonesia Jababeka Jababeka Bekasi 55,685 Plaza Indonesia & Graha Buana Cikarang Under Construction AEON Mall Sentul Sentul Bogor 1, Aeon Under Construction AEON Mall Deltamas Deltamas Bekasi 9, Aeon In Planning Living World Jababeka Jababeka Bekasi 18, Kawan Lama In Planning 219 AEON Mall Bogor Cibinong Bogor 2, Aeon In Planning Hollywood Central Cikarang Bekasi 25, Graha Buana Cikarang In Planning Embarcadero Bintaro Tangerang 3, Lippo Karawaci In Planning Kota Harapan Indah Bekasi Bekasi 51, Hasana Damai Putera In planning Lippo Grand Mall Karawaci Tangerang 12, Lippo Karawaci In planning Mall at Pesona Square Juanda Depok 3, Menara Depok Asri In Planning Shopping Mall at Kota Wisata Cibubur Bekasi 45, Sinarmas Land In Planning Shopping Mall at Green Lake Cimanggis Depok 2, Cempaka Group In Planning 4 Colliers Quarterly 311216 & Greater Retail Colliers International
Absorption YTD Comparison: Number of Vacant Spaces Based on Mall Grade 18, Occupancy Rates 1% 15, 9% 12, 8% 7% 9, 6% 5% 6, 4% 3% 3, 2% 1% % Upper Classes Middle Classes Middle-Lower Classes 216YTD 216YTD CBD Outside the CBD Some major tenants recently opened their stores in the two new shopping centres in, namely Central Department Stores (at Neo SOHO Mall within Podomoro City) and H&M and Uniqlo (at PIK Avenue Mall). These two malls provide around 7, of new retail space, and so far contributed to the decline in occupancy to 84.9%, or slipped moderately from the previous quarter. Although the projected occupancy will continue to decrease, the absorption is expected to be slightly higher by the end of 216. Without calculating the absorption from newly operating malls, the spaces absorbed were recorded at 15, in 216 YTD, higher than the entire year of. Middle and upper class shopping centres contributed to the total absorption YTD. Newly opened shopping centres also secured a high-commitment occupancy level since they started operating. Each of the four shopping centres that began operation in and 216 recorded a committed occupancy level of above 5%. One of the future shopping malls in 216 has secured tenants, particularly from the food and beverages industry, even before they opened. Based on mall grade, the average occupancy rates were relatively flat for all classes. Occupancy rates were maintained at 86% and 77% at the middle and middle-lower class shopping centres. Conversely, upper class shopping centres showed a decreasing trend in occupancy rates QoQ. A number of committed tenants have not yet opened their stores at the newly operating malls and brought the occupancy rates to 87.5%, falling by 3.4% QoQ. Based on area, occupancy grew marginally and stood at 92% in the CBD. Most upper class shopping centres maintained their occupancy rates to stabilise above 9%, over the last five years. Meanwhile, the occupancy rate was recorded at 82.3% outside the CBD and decreased almost 2% QoQ. Occupancy in South (excluding CBD), East and North was above 8%. West recorded 77.3% occupancy and showed a declining trend YTD. Whilst being the lowest, Central s occupancy was relatively flat YTD, currently at 73.2%. YTD Comparison: Number of Vacant Spaces Based on Area 15, 12, 9, 6, 3, CBD Central South North 216YTD East West 5 Colliers Quarterly 311216 & Greater Retail Colliers International
Greater Occupancy Rates 1% 9% 8% 7% 6% 5% 4% 3% 2% 1%. Newly operating shopping centres also brought the average occupancy rates to increase in Tangerang and Bekasi, although gradually. More than 1, of future additional supply will likely bring the occupancy rate to decline by the end of 216. Nevertheless, some committed anchor tenants have been secured currently, and it is expected to bring the projected occupancy to stabilise at above 8%. YTD Comparison: Number of Vacant Spaces Based on Region 125, 1, % 216YTD Bogor Depok Tangerang Bekasi All Area 75, 5, Most regions showed increasing trend and maintained occupancy at between 8% and 9% since. Currently in Bogor, however, occupancy slipped to 78.6% due to additional supply in the previous quarter. The overall average occupancy showed a soft growth in BoDeTaBek YoY, from 83% to 84%. Other regions in the greater area registered occupancy level at between 83% and 87%, with Depok reaching the highest. Thanks to food and beverage tenants, occupancy accelerated in a Depok shopping centre that opened in 25, Bogor Depok Tangerang Bekasi 216YTD New Tenants at Some Shopping Centres in Shopping Centre area new tenant Lippo Mall Kemang South Matahari Committed Tenants at New and Future Shopping Centres in Shopping Centre area tenant name Shopping Mall Pancoran South Excelso, Nanny s Pavilion, Starbucks, Coffee Bean, Baskin Robins, Chatime, Wendys, Solaria Neo Soho Mall West Central Dept Store, Kid Station, Electronic Solution, Pedro, The Body Shop, Clarks, Staccato, Polo Ralph Lauren, Samsonite, Wrangler, Wood, Cotton On, Mango, Nine West, Charles & Keith, Armani Jeans, Furla, Ta Wan, Pizza Hut, Pepper Lunch, Muji, Pedro, Kidz Station, Electronic Solution, Cotton On PIK Avenue Mall North Uniqlo, The Food Hall, XXI, Ace Hardware, Gold s Gym, Informa, H&M, Optik Melawai, Sports Station, Giordano, Levi s Store, Timberland, Pizza Hut, Starbucks, Excelso, Kidz Station Bassura City Mall East XXI, Lion Superindo, Optik Melawai, Sports Station, The Body Shop, Starbucks, Imperial Kitchen, Wood 6 Colliers Quarterly 311216 & Greater Retail Colliers International
Average Rental Rates Average Asking Rents in IDR9, Average Asking Rents Based on Mall Grades IDR9, IDR75, IDR6, IDR75, IDR45, IDR6, IDR3, IDR45, IDR15, IDR3, IDR15, 216YTD Upper Classes Middle Classes Middle-Lower Classes CBD Outside CBD 216YTD Asking Rents Based on Area IDR3,, In, the average asking rent rose 4.2% YTD and was recorded at IDR566,87//month. The average rent in the CBD was registered at IDR855,965//month, a 3.2% increase from. Contributed by two newly operating shopping centres, the average asking rent increased 6% YTD to IDR468,994/ /month outside the CBD. The growth of asking rents outside the CBD area may be higher, but they were recorded to still be below the average market tariffs in. Asking rent in South recorded the highest at IDR532,735 amongst other regions in, whilst Central registered the lowest average rent at IDR316,246//month. In West, North and East, asking rents were offered at an average of between IDR327, and IDR512,//month. As of Q3 216, only less than 1 shopping centres offered rents above market tariffs. All of them are upper class shopping centres, and they bring the average asking rent to IDR798,656/sq m/month, down on last year s 3%. Asking rents at two newly operating upper class shopping centres were lower than the already existing ones. Rental performances at middle and middle-lower class shopping centres have seen a steady increase, recording asking rents at IDR423,124 and IDR281,56// month, respectively. Both increased around 6% YTD. IDR2,5, IDR2,, IDR1,5, IDR1,, IDR5, CBD Greater Central South North East West Despite the upward trend, the average growth has been slow for the last two years. Asking rents only grew 3.4% YTD to IDR356,175//month. On average, shopping malls in Tangerang have a relatively expensive rental tariff, with the highest average asking rents at IDR38,795//month as of Q3 216. Bogor and Bekasi recorded average asking rents of IDR372,674 and IDR355,623//month, respectively. Meanwhile, the average asking rent in Depok remained the lowest at IDR253,489//month 7 Colliers Quarterly 311216 & Greater Retail Colliers International
Average Asking Rents in BoDeTaBek IDR4, IDR35, IDR3, IDR25, IDR2, IDR15, IDR1, IDR5, of middle-lower class shopping centres was at IDR11,385/sq m/month. Overall, the average service charges for all shopping centres in stood at IDR126,297//month as of Q3 216. Average Service Charges in IDR18, IDR15, IDR12, IDR9, IDR6, 216YTD IDR3, The Range of Asking Rents in BoDeTaBek IDR1,, 216YTD CBD Outside the CBD IDR8, Service Charge Based on Area IDR3, IDR6, IDR25, IDR4, IDR2, IDR2, IDR15, Bogor Depok Tangerang Bekasi IDR1, IDR5, Service Charges CBD Central South North East West Service charge in moved regularly around 1% YoY since. Average service charge surprisingly increased to IDR142,6//month, due to the adjustment made at middle class shopping centres, showing the highest increase of 17.2%. The increase created a narrower gap between middle and upper class shopping centres. As of Q3 216, some upper class shopping centres adjusted their service charge by 1% up to 2%, bringing their average service charge to IDR151,184//month. Meanwhile, the average service charge In the CBD, there is a big gap between the minimum and maximum service charges, with an average service charge at IDR154,733//month. The growth of service charges in the CBD was lower than that outside the CBD. As of Q3 216, service charge rose to IDR117,3//month outside the CBD, growing significantly at 13.6% YTD. West, North and South (excluding CBD) maintained their service charges at between IDR1, and IDR14,//month. The average for East and Central (excluding CBD) was below IDR1,//month, at least since. 8 Colliers Quarterly 311216 & Greater Retail Colliers International
Greater Most of the BoDeTaBek region maintained a service charge growth at between 3% and 7%, except Depok, which had a more substantial growth than other regions, up by 15% YTD. The range of service charges were recorded at between IDR35, and IDR15,//month, with overall adjustment up by 6% YTD, bringing the average cost to IDR9,494//month. As of Q3 216, 14 shopping centres registered service charges above IDR1,/, or double those in. Service Charges in BoDeTaBek IDR1, IDR9, IDR8, Service Charge Based on Region IDR16, IDR14, IDR12, IDR1, IDR8, IDR6, IDR4, IDR2, IDR7, IDR6, Bogor Depok Tangerang Bekasi IDR5, IDR4, IDR3, IDR2, IDR1, Concluding Thought The rise of ecommerce was a legitimate threat, and traditional malls are dying. The malls that succeed in the future will offer unique attractions and entertainment. 216YTD Exchange rate is forecasted at IDR13,3 to IDR14, against the US dollar. This could influence retailers to order and trade goods, and then push to maintain stable asking rents in the future. A slightly increasing asking rent will likely be generated by upper class shopping centres. The projected occupancy is expected to improve, by projecting a limited additional supply by the end of 216 to 217. For more information: Ferry Salanto Senior Asociate Director Research +62 21 343 6888 ferry.salanto@colliers.com Contributors: Eko Arfianto Manager Research Copyright 216 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.