Developers are continuing to build more retail spaces in Jakarta, although the vacancy rate is increasing on the back of poor sales performance.
The property consultancy Savills Indonesia. estimated that 321,086 square meters of new retail spaces would be developed in Jakarta in 2019-2021, of which 54 percent would target the upper class market segment and 46 percent would target the upper middle class segment.
It also projected that South Jakarta would see the largest development of new retail spaces at 44 percent, followed by Central Jakarta (28 percent) and West Jakarta (20 percent), while East Jakarta would not see any new retail spaces during the same period.
This year alone would see 105,810 sqm of new retail spaces: 54,287 sqm for the upper class segment and 51,523 sqm for the upper middle class segment.
Savills provided a breakdown of its 2019 projection for new retail spaces as 45,710 sqm in South Jakarta, 38,300 sqm in West Jakarta and 21,800 sqm in Central Jakarta; again with no new retail spaces in East Jakarta.
The projection indicated that 2020 would see the development of 164,276 sqm of new retail spaces: 119,000 sqm for the upper class segment and 45,276 sqm for the upper middle class.
“Additional retail spaces of 97,000 square meters will be seen in South Jakarta, and 67,276 square meters in Central Jakarta,” Savills Indonesia research director Anton Sitorus said on Sunday, as quoted by kompas.com.
In 2021, it projected that the capital would see 51,000 sqm of new retail spaces in the middle class segment in North Jakarta (25,000 sqm) and West Jakarta (26,000 sqm).
Meanwhile, Savills estimated that the vacancy rate had increased to 12.1 percent in 2018 from 11.9 percent in 2017, with a 19.7 percent vacancy rate in the middle class segment in 2018. The vacancy rate in the upper class segment showed a year-on-year increase from 6.4 percent in 2017 to 9 percent in 2018.
Anton believed that the economic downturn was behind the increase in the vacancy rate of retail spaces in Jakarta.