APPD Market Report Article


February 28, 2022


IDR 6,541,154


F&B demand remains strong; fast fashion is also expanding

  • The high level of demand was primarily driven by the opening of AEON’s latest offering at the Southgate development located in South Jakarta. This project entered the market with healthy pre-commitment levels. F&B was still the main driver of demand, followed by fast fashion (including H&M and Uniqlo); both expanded into the newly completed AEON Mall.
  • For most of 4Q21, malls were allowed to accommodate 100% of their total capacity but were under strict health protocols, including the requirement that visitors were vaccinated. Dining-in at restaurants was permitted at 75% capacity with customers allowed 60 minutes to eat. Gyms were given a 75% capacity restriction, while cinemas had a 70% capacity restriction.

AEON Mall Tanjung Barat adds 42,000 sqm to the total retail stock

  • The completion of AEON Mall Tanjung Barat in the south of the city added 42,000 sqm to the supply-constrained retail market in 4Q21. This project is part of AEON’s aggressive expansion plans for Greater Jakarta and beyond over the next few years.
  • Despite the new completion, the vacancy rate remained healthy − in the single digits. An unofficial moratorium on stand-alone retail development has been in place in Jakarta since 2011. As such, prime retail supply in Jakarta has been limited in recent years and the only new completions have been retail components of mixed-use projects.

Rents start to stabilise in 2021

  • Rents in Jakarta’s prime malls stabilised over the year with a positive growth of 0.7% y-o-y, after compressing last year due to the pandemic. Prime mall rents are likely to increase going forward when the situation improves as they are also driven by limited supply in the upcoming years.
  • Some landlords started to bring their rental rates back to normal since the government had eased the restrictions for most of 4Q21.

Outlook: Rents are expected to recover in 2022

  • While AEON Mall Tanjung Barat was completed in 4Q21, Senayan Park is slated for completion in 2022 after being pushed back from this year. The project is structurally complete but has yet to hold an official grand opening due to the pandemic.
  • Restrictions have been loosened due to the improving pandemic situation, as the vaccine has been well distributed; if this situation continues, prime mall rents will likely recover in 2022.

Note: Jakarta Retail refers to Jakarta's overall prime retail market.

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