Transformation of Retail Space Function: Jakarta’s Shopping Center in A Decade

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Abstract Summary
Jakarta is one of metropolitan known for its tremendous number of shopping centers. As of 2018, there are 80 shopping centers in Jakarta with a total retail space of 4,650,000 sqm. However, the growth of shopping center development in Jakarta has been stagnant since October 2011 when the then Governor of Jakarta issued a moratorium to limit development of shopping centre in Jakarta. This moratorium, in the form of Governor Instruction, is for new shopping centers development permit issuance, particularly those who have more than 5,000 sqm leasable area. It was introduced out of concern that the city had been overpopulated with malls, an issue that directly contributed to the city’s notorious traffic congestion. Meanwhile, shopping centers whose license already issued before the moratorium was gazetted would not be affected and their development could still be continued. The moratorium has been resulting drastic changes of retail supply in Jakarta. It causes supply growth to slow down as shopping mall development permits have begun to thin out. Jakarta’s annual supply seeing a decreasing trend since 2013 and will continue to see limited supply until 2020. The limited supply of shopping center and commercial space somehow resulting in development and space function changes. We will see shopping centers gradually losing tenants before they change their retail space function. Nielsen's 2017 data shows a change in the consumption patterns of Indonesian, especially the middle class, which indirectly affects the transformation of shopping centers in major cities in Indonesia, especially Jakarta. The Central Statistics Agency’s (BPS) stated there has been a shift in spending from non-leisure to leisure, according to data that household spending for restaurants and hotels reached 5.52% of income in the third quarter of 2017, higher than years before. The rapid growth of e-commerce also may or may not influence shopping centers development, considering e-commerce creates a digital shopping space that undermines the performance of retailers such as department stores. Hence, it is necessary to figure out a new space strategy to create better performance for retailers inside shopping centers. This paper shows the chronology and transformation of shopping centers development in the last decade and how future development will affect commercial space in Jakarta.
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Tarumanagara University
Indonesian Association of Urban and Regional Planners (IAP)