Jakarta retail occupancy rate remains stable as tenant retention challenges persist

The occupancy rate was at 74% as of Q2 2024.

Retailers and mall owners in Jakarta are leveraging the Ramadan and Eid al-Fitr holidays to significantly boost visitor numbers. According to Colliers, despite this positive trend in the mall visitation, the absence of new supply has yet to increase occupancy levels in Jakarta. 

“Some malls continue to struggle with competition and tenant retention. As a result, the average occupancy rate in Jakarta remained stable at 74% in Q2 2024, similar to Q1 2024. However, with the completion of new malls, occupancy rates are expected to slightly decrease by the end of 2024,” the report added.

Here’s more from Colliers:

In the Greater Jakarta area, the average occupancy rate was 68.8% in Q2 2024, a 1% increase from Q1 2024. With no new retail spaces completed, occupancy levels may continue to improve throughout the rest of 2024. Retailers are increasingly eager to introduce a broader range of products and innovate to align with customers preferences. They are more willing to seize opportunities and expand their presence. A competitive battle is emerging among supermarkets, which are now expected to offer fresh products and affordable cuisine. 

Several F&B retailers, particularly beverages, are expanding their presence as sweetened beverages gain popularity among younger consumers. F&B businesses are pursuing aggressive expansion strategies, opening multiple branches to capitalize on the burgeoning consumer market. 

The trend for popular desserts is anticipated to rise, further energizing the retail landscape. International brands such as Teazzi (Taiwan), Sweet7 (China), Tealive (Malaysia) and Shuyi Grass Jelly (Hong Kong) are increasingly focusing on Indonesia, recognizing its vast potential and growing middle class.

International brands are also opening new stores in Jakarta. For example, the popular South Korea activewear brand Alo Yoga has recently opened a store in a prestigious location. Looking ahead to the second half of 2024, the retail sector is poised for continued growth, driven by strategic initiatives and evolving consumer preferences. The retail landscape is set for a vibrant future with new brands entering the market.

New retail developments are experiencing encouraging levels of tenant commitment, with many projects securing significant tenant numbers before opening. This success is attributed to strategic location choices and innovative design concepts. Nevertheless, the market is rapidly evolving, and under construction malls face mounting pressure. 

To capitalize on current market interest and avoid potential setbacks, these malls may need to accelerate their timelines to meet market demand more quickly. Swift completion and opening are crucial to meeting market expectations and ensuring high tenant satisfaction from the outset.