Jakarta to see one new prime shopping mall this year

It will be located in the city’s central area.

Prime malls in Jakarta are expected to continue reshaping their tenant mix to cater to a greater number of F&B and entertainment tenants, said JLL in a report. However, future supply is projected to be limited. 

The upcoming completion of the new Agora Lifestyle Mall is highly anticipated in the central area of Jakarta, within the Thamrin Nine complex, and is scheduled to be delivered in mid-2024.

Here’s more from JLL:

We may see some minor, single-digit rent increments, although the dominance of large retail groups and the fact that currently active tenants are not necessarily the highest payers may limit rent growth despite high occupancy levels in the prime retail market. Landlords are likely to increase rents as they capitalise on the popularity of these sectors.

The F&B sector continues to be one of the main demand drivers

The F&B sector remains a significant driver of demand for space in these prime malls. The opening of the Coffee Shop and The Coach Restaurant in Grand Indonesia in early March marks an expansion for the luxury fashion brand into the food and beverage (F&B) industry.

Prime shopping malls have actively been changing their tenant mix to provide a diverse array of retail options. In 1Q24, there was a collaboration between Miniso, known for its pink theme, and Transmart, a local shopping centre in Indonesia.

No new prime malls completions in 1Q24

The vacancy rate remained stable at around 4%, with no new prime shopping mall openings. The limited availability of vacant space in desirable areas within these malls has resulted in a waiting list for tenants looking to establish or expand their presence in Jakarta.

With a lack of new supply, there may still be opportunities for smaller to medium-sized spaces, providing availability for businesses seeking to establish a presence. Developers remained focused on building malls on the outskirts of Jakarta.

Rents continue to rise steadily on a moderate, upward trajectory

Rents increased by 0.9% q-o-q, continuing its rise from the previous quarter. Annual single-digit increments occurred last year, and we anticipate a similar increase this year.

The rent that a particular retailer can negotiate depends on several factors, which include the quality of the mall, the floor and whether the tenant is affiliated with one of the large retailers. The upward trend in prime mall rents is expected to continue, mainly driven by a lack of supply.

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