Jakarta’s retail market now favours landlords as mall activity recovers
Some landlords are evaluating tenancy mixes to optimise all available spaces.
As of Q3 in 2023, Colliers says average rental rates in Jakarta remained stable, with no new malls completing construction, registering at IDR563,428 and IDR382,764, respectively. The completion of the remaining shopping malls currently under construction may alter base rental rates by the end of 2023.
Here’s more from Colliers:
With the resurgence of mall activity, landlords have once again assumed a position of strength in negotiations, given that mall traffic has returned to expected levels. Mall owners are prioritising the observation of the latest trends and the pursuit of international brand expansion to infuse fresh vitality into their malls. Nevertheless, negotiations must be conducted cautiously to ensure agreements are reached and vacant spaces are filled.
Some landlords are also re-evaluating their tenancy mixes to optimise the allocation of available spaces. The conventional concept of large retailers, like hypermarkets and department stores, is gradually evolving and becoming less favoured. This shift presents an opportunity to introduce more speciality stores, thereby maximising rental income. Additionally, optimising locations can be achieved by attracting tenants that do not require large spaces, which can contribute significantly to the income of mall owners.
Service charges have also remained steady in both Jakarta and Greater Jakarta, registering figures of IDR153,519 and IDR118,992, respectively. To curtail operational expenses, some landlords are introducing novel amenities into their malls, such as electric vehicle charging stations. The significant rise in the number of EV users in the Jakarta and greater areas has prompted landlords to accommodate these facilities to support this growing demographic.