Indonesia's largest economic powerhouse is Jakarta. Priding itself on being the nation's main commercial, political and business hub Jakarta maintains a GDP growth rate similar to and oftentimes exceeding Indonesia's.

Savills Asian Cities Report At a glance:

• Annual GRDP growth rate for FY 2017 - 6.22%
• Average rent reduced by 3% from last years average
• Approx 450,000 sq.m. of new supply expected to enter market between 2018-2021
• Average rent for December 2017 approx. IDR 356,000 sq.m. per month
• Rents in all grades and segments of malls ranged between IDR217,000 to IDR823,000

Jakarta's annual GRDP growth rate for FY2017 stood at 6.22%, outperforming Indonesia’s which stood at 5.07%. Its consumer confidence index in February 2018 also improved to 126.7, compared with 124.0 in February 2017. Infrastructure development and a conducive business and investment climate all contributed to the city’s economic growth. In response to rising vacancies, Jakarta's rent prices saw light decreases.  

Since the 1970s, Jakarta's number of shopping centres has continued to increase, despite growth slowing due to permit securing complexities. Demand for retail space in Jakarta reached its peak between 2010 and 2013 where net take-up surpassed new supply. Since 2014, the pattern has reversed. In response to rising vacancies and a slow retail market, rents in Jakarta decreased slightly. Average rent reduced by 3% from last year’s average. The survival of the retail market depends on its consumers and retailers need to identify and adapt to customer preferences. Around 450,000sq.m. of new supply will enter the retail market between 2018 and 2021. 

Rosaline Lie, Retail Head from Savills Indonesia told WILLIAMS MEDIA "Jakarta as the launch pad for Indonesia's burgeoning middle class has many attractions for international brand retailers. As such, the currently modest rental trends will provide a window of opportunity for new players to enter Southeast Asia's biggest consumer market."

Rents

Responding to rising vacancies and a slow retail market, rents in Jakarta decreased slightly. Average rent in December 2017 was about IDR356,000sq.m. per month – a 3% reduction from last year’s average.

Looking closely at each segment, rents in all grades, except high-end malls, declined. Rent per square metre per month in the middle-low segment was down the most to IDR217,000 whereas rents in middle-up malls slipped to IDR294,000.

Rents in upper-grade centres slid a little to IDR517,000, while high-end malls maintained stable rents at IDR823,000. 

Click here to view Savills Asian Cities Report Jakarta Retail 1H 2018.

For more information or to discuss the report email Craig Williams via the contact details listed below. 

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