How can Jakarta retail landlords maintain profitability and tenant satisfaction?

Retail rents are expected to remain stable till the end of the year.

In a recent report, Colliers said given the steady foot traffic, retail landlords in Jakarta have maintained a consistent rental rate of IDR563,506 for Q3 2024, unchanged from the previous quarter. 

“This trend is expected to persist through the remainder of 2024. The anticipated completion of a new mall in Jakarta has yet to exert any significant impact on overall rental rates,” the report added.

Here’s more from Colliers: 

In Greater Jakarta, the average rental rate was recorded at IDR389,027 in Q3 2024, reflecting stability from Q2 2024. Keeping rental rates competitive remains a key strategy for landlords as they aim to attract and retain high-profile tenants. Interestingly, the ability to sustain rental rates amidst varying economic conditions highlights landlords’ confidence in the enduring appeal of these retail spaces.

Landlords may make minimal rental rate adjustments to remain competitive, positioning themselves to attract tenants and boost occupancy in the evolving market. While the reasons for rental rate increases vary among landlords, the overarching drivers include the need for capital improvements and a surge in inquiries from prospective tenants in high-performing malls. To maintain profitability and tenant satisfaction, landlords should carefully balance these factors, opting for moderate rate adjustments to retain key tenants while preserving a competitive edge.

In terms of service charges, Jakarta recorded a relatively stable increase, reaching IDR 153,862 in Q3 2024. Meanwhile, in Greater Jakarta, the service charge remained stable at IDR 127,100, unchanged from the previous quarter. Service charges at certain malls are expected to be adjusted next year to align with operational requirements and ensure efficiency.

As fluctuations in operational expenses arise, landlords are expected to maintain, if not improve, service quality to provide tenants with optimal comfort and operational efficiency. This commitment to high standards is crucial for fostering an inviting environment that attracts and retains prominent tenants. 

A deep understanding of service charges enables landlords and tenants to collaborate more effectively, creating a mutually beneficial relationship that supports growth and innovation within the dynamic retail environment. Such synergy not only boosts tenant satisfaction but also bolsters the mall’s competitive positioning in an ever-evolving market.