Research & Forecast Report Jakarta I Retail Accelerating success. “Limited new retail supply in DKI Jakarta brought the After the start of operations of Baywalk Mall, which is located occupancy rate up 2% to 89.3%. In contrast, the greater within the Green Bay Pluit Complex, Jakarta saw little new retail Jakarta area outside DKI Jakarta registered a slight decline space provided from the extension projects at Mall Puri Indah in occupancy to 82% due to the opening of two new retail (around 3,000 sq m) and Mall Kelapa Gading (around 6,000 sq centers. In the meantime, the average asking base rental m). These extended spaces are designed as F&B areas. With rate in Jakarta climbed by 3.3% q-o-q to IDR491,675 / sq m the small addition, the Jakarta retail cumulative supply moved / month. Similarly in the greater Jakarta area, the average upward to 4.32 million sq m as of 1Q 2014. Of this, 2.86 million sq asking base rent moved to IDR302,618 / sq m / month, m or 66.3% was marketed for lease. representing a 9.2% increase compared to last quarter.” Historically, after growing by 10% and bringing huge supply to - Ferry Salanto, Associate Director | Research the market in 2009, the annual growth of supply of retail space in Jakarta began weakening. From 2010 to 2013, the average growth was only 3.6% per year. In 2014, the growth of supply for shopping centres in Jakarta will continue declining. Although St RETAIL SECTOR Moritz is a huge mall expected to enter the market, overall, the total additional supply is only 138,200 sq m. Comparing year-on- Supply year (YoY), the cumulative supply will only grow by 3.2%. Based on construction progress, seemingly St Moritz will be Jakarta ready in late 2014. Two shopping centres belonging to Agung Podomoro Land (APL), Central Park Extension and Shopping Jakarta Retail Cumulative Supply Mall at Pancoran are also pursuing progress to reach their Based on Marketing Scheme completion. Those shopping centres, together with Pantai Indah Kapuk Mall and Pulo Gadung extension, are expected to enter 3,500,000 the market in 2015. 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2014YTD for Lease for Sale Source: Colliers International Indonesia - Research Again, a moratorium issue is expected to direct future shopping Jakarta Retail Future Supply - Based on Region centre developments to other areas besides Central and South Jakarta including the Central Business District (CBD). Development of shopping centres within townships continue. West Jakarta AEON Mall Indonesia has become one of the developers trying to take advantage of this opportunity. Last year, AEON East Jakarta confirmed the development of their second mall in Indonesia. This mall, which will be located within Jakarta Garden City in East Jakarta, is scheduled to begin operations in early 2016 North Jakarta and provide approximately 90,000 sq m of leasable area. With additional retail space from AEON Mall Jakarta Garden South Jakarta City, the total supply for future shopping centres in Jakarta is projected to be 462,200 sq m from 2014 to 2016. These projected numbers will also bring the cumulative supply for Central Jakarta shopping centres in Jakarta close to 5 million sq m in 2016. CBD Additionally, in North Jakarta, which is actually known as a trading area, a big developer (Agung Sedayu) will also develop 0 50,000 100,000 150,000 200,000 250,000 300,000 a shopping centre in Pantai Indah Kapuk. Attracting a number of visitors from the surrounding areas is expected to become the 2014F 2015F 2016F way to avoid competition with other existing shopping centres, Source: Colliers International Indonesia - Research especially those located around Pluit. New Supply Pipeline in Jakarta SHOPPING CENTERS LOCATION REGION NLA (SQ M) STATUS 2014 St. Moritz Puri Indah West Jakarta 129,200 Under Construction 2015 Central Park Mall Extension Slipi West Jakarta 40,000 Under Construction Pantai Indah Kapuk Mall Pantai Indah Kapuk North Jakarta 30,000 Under Construction Shopping Mall @Pancoran Pancoran South Jakarta 8,000 Under Construction Pulo Gadung Trade Center extension Pulo Gadung East Jakarta 10,000 In Planning 2016 Mal Puri Indah 2 Puri Indah West Jakarta 75,000 In Planning Holland Village Mall Cempaka Putih Central Jakarta 40,000 In Planning Grand Cipulir Cipulir South Jakarta 40,000 In Planning AEON Mall Garden City Cakung East Jakarta 90,000 In Planning Source: Colliers International Indonesia - Research 2 Research & Forecast Report | 1Q 2014 | Retail | Colliers International Greater Jakarta Area (BoDeTaBek - Despite continuing, the growth of supply in BoDeTaBek during 2014 is forecast to be lower than the previous year. After BXc Bogor, Depok, Tangerang, Bekasi) Mall, the market expects to see two shopping centres that will Greater Jakarta Retail Cumulative Supply begin operations during 2014, i.e. AEON Mall BSD City and Cinere Bellevue Suites Mall. Based on Marketing Scheme AEON Mall BSD City, a joint venture project between Sinarmas 4,000,000 Land and AEON Mall, is expected to begin operations by the end of 2014. Seemingly, this mall be completed by its projected date. 3,500,000 As an indication, the mall’s construction that started at the end 3,000,000 of 2013 still shows progress in line with the initial plan. 2,500,000 AEON MALL Indonesia is projected to be the most active mall developer in BoDeTaBek from 2014 to 2017. In addition to BSD 2,000,000 and Deltamas (Bekasi), AEON Mall is also planning to develop 1,500,000 another shopping centre in Cibinong (Bogor). 1,000,000 Greater Jakarta Retail Cumulative Supply 500,000 Based on Regions 0 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F Bekasi 2014YTD for Lease for Sale Source: Colliers International Indonesia - Research Tangerang A new shopping centre, Bintaro Jaya Xchange Mall, began operations in Tangerang in 1Q 2014. The mall, which is known as BXc Mall, combines the family and lifestyle mall concept. This Depok mall is part of a mixed-use project that in addition to the lifestyle centre mall, also provides an office tower, apartments and convention hall on 25 ha of land. Located on the side of Bintaro – Pondok Indah toll road, this mall brought 45,000 sq m of new Bogor supply into the market and brought the cumulative supply to 2.24 million sq m in BoDeTaBek. 0 50,000 100,000 150,000 200,000 250,000 300,000 As reported earlier, huge supply entered the Outside Jakarta 2014F 2015F 2016F 2017F market and recorded significant growth of 13.9% YoY in 2013. Source: Colliers International Indonesia - Research New Supply Pipeline in Greater Jakarta SHOPPING CENTERS LOCATION REGION NLA (SQ M) STATUS 2014 Cinere Bellevue Suites Mall Cinere Depok 28,000 Under Construction AEON Mall BSD City Serpong Tangerang 75,000 Under Construction 2015 AEON Mall Deltamas Deltamas Bekasi 21,000 In Planning Cimandala City Mall Cimandala Bogor 60,000 In Planning Plaza Indonesia Jababeka Bekasi 20,000 In Planning continued 3 Research & Forecast Report | 1Q 2014 | Retail | Colliers International SHOPPING CENTERS LOCATION REGION NLA (SQ M) STATUS continuation 2016 Bekasi Trade Center 2 Bulak Kapal Bekasi 56,000 Under Planning Living World Jababeka Jababeka Cikarang 18,000 Under Planning Grand Dadap Mall Dadap Tangerang 20,000 Under Construction AEON Mall Bogor Cibinong Bogor 20,000 Under Planning Source: Colliers International Indonesia - Research Comparison of Annual Retail Supply in Jakarta and Annual Supply, Demand and Occupancy BoDeTaBek During 2008 - 2017 in 2008 - 2014 YTD 500,000 100% 600,000 95% 500,000 400,000 400,000 90% 300,000 300,000 85% 200,000 200,000 80% 100,000 100,000 75% 0 0 70% 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2014YTD 2014YTD Jakarta BoDeTaBek Annual Supply Annual Demand Occupancy Source: Colliers International Indonesia - Research Source: Colliers International Indonesia - Research The occupancy rate for lower-class shopping centres (middle Demand and middle-low) was relatively stable at 86 - 87%. Shopping centres in North Jakarta and the central business district (CBD) recorded the highest growth of 3% QoQ. In the Jakarta CBD, entering its second year of operation, Lotte Shopping Sluggish growth of retail supply began to have a positive effect on Avenue made a significant improvement by having the least demand in Jakarta. The occupancy rate in Jakarta rose by almost number of stores remaining that have not opened. As mentioned 2% QoQ. The growth of occupancy was the highest since 2012 above, this mall became a major generator to lift the average and delivered an average occupancy rate of 89.3% for shopping occupancy rate for shopping centres within the CBD to 92.6% as centres in Jakarta in 1Q 2014. of 1Q 2014. This average occupancy rate rose by 3.5% QoQ. The occupancy rate of upper-class malls recorded the highest The average occupancy rate for shopping centres in North growth of 1.8% QoQ. Lotte Shopping Avenue, which has been Jakarta was also growing. Although this area achieved the lowest in operation since last year, became the main generator to rate compared to others, performance of shopping centres in maintain the occupancy rate for this group of shopping centres North Jakarta grew by 2.8% QoQ and brought the occupancy to that remained above 90%. Some stores are preparing to open at 84.5 % as of 1Q 2014. the mall, which is continuing to improve access for visitors. Performance of new shopping centres also caused the average The performance of upper-class malls has surpassed 90% for occupancy in East Jakarta to rise.