Presidential candidates to improve Indonesia transport

Both Prabowo Subianto and Joko Widodo of the Indonesian presidential election have pledged to spend big on transport links including roads, railways and ports – Benefiting retailers who struggle to reach customers within remote regions of the island nation. Whilst consumer companies within the fourth most populous country of the world, trailed builders as the benchmark stock index elevated by 18% this year, the Indonesia Food and Beverage Producers Association claim sales could be as much as 50% higher, if only access to rural areas were improved.

Aberdeen Asset Management, which oversees approximately $541billion, view consumer companies in Indonesia as a way of indirectly playing the infrastructure. This is as they claim any pro-infrastructure policy would make the economy more competitive, benefiting consumers.

London based research firm, Kantar Worldpanel forecasts Indonesia to gain 80 million new consumers over the upcoming 15 years. This is as Indonesia’s economy is forecasted to grow by 5.7% each year through 2016.

Latest property market news - Lippo group

On Wednesday, Lippo Group broke ground with a mixed-use shopping mall in Kupang, East Nusa Tenggara, in its latest endeavour to develop beyond Java.

The director revealed Lippo Mall Kupang will be built across four hectares, costing approximately Rp600billion ($51million).

The 40,000 square metre shopping mall will quarter Matahari Department Store, Hypermart, as well as the Lippo Group’s movie theater chain, Cinemaxx.

The Kupang mall is amongst the Lippo Group’s major plan to tap into the property market of East Nusa Tenggara.

The group is currently also building a branch of its private hospital chain - Siloam Hospitals – nearby the Lippo Mall Kupang, expected to open in October. It will cover an area of approximately two hectares with 320 rooms alongside 250 catering for patients.

Furthermore, the Jakarta based group will also construct a Lippo Group office, upon an area of approximately two hectares, on the site.

Last year, Lippo inducted the Kupang branch of its hypermarket chain, Hypermart, through Matahari Putra Prima — its lifestyle retail unit.

Beyond Kupang, the property conglomerate is also presently undertaking several projects within areas outside Java - Including Makassar, Padang, South Sulawesi and West Sumatra.

Metland developing three new commercial and residential projects this year

Beautiful Botanical Gardens in Bogor, near where the first mall of Cileungsi will be built

Property developer, Metland (officially Metropolitan Land), are to commence construction of three new commercial and residential projects throughout Indonesia this year.

Announced at the company’s press release, one of the projects prepared is to be a commercial and apartment complex within West Jakarta, marketed as Metland West City. It is due to launch by the end of 2014. Following the company’s yearly shareholder’s meeting in the Jakarta capital on Monday, the investment value of Metland West City is still to be determined.

Metland West City will be developed across 60hectares, with around half to be allotted to commercial development.

The latest developments in Indonesia

Property developer, The Blacksteel Group, has announced plans to construct projects worth $300million in various Indonesian cities until 2018. The Lippo Group stated the company will concentrate on developing property within remote areas.

One project is the development of Lombok City Center (LCC), a mall in Mataram, the capital of the island. Funds of the project are from a variety of sources combined from money from investor’s, internal cash and bank loans and money from investors. The LCC is expected to be completed by 2016 with investment for the project estimated at approximately Rp1trillion ($86million). The Lippo group claim LCC will boost the image of West Nusa Tenggara to transform to a modern province providing bright investment prospects.

Furthermore, LCC is assumed to open employment opportunities in the region, aid in propelling consumer purchasing power and boost the regional economy. Representatives from Lippo have also claimed Blacksteel intends to develop property projects in areas that big developers have not yet engaged with; concentrating on second and third tier Indonesian cities. This is with Blacksteel plans to construct 17 malls over the next five years.

Higher wages together with steady economic growth over recent years has given greater purchasing power to consumers of Indonesia’s Eastern provinces.

The company is currently developing the Ambon City Center (Maluku province) and Ponorogo City Center (East Java) malls.

Blacksteel is independent of the Lippo Group.

Cushman and Wakefield's worldwide retail report - Brought to you first by Commercial People

A global retail report from Cushman and Wakefield today, showed global trends continue to stay positive for shopping centre development. Crucial additions to supply are expected between now and 2016 within major emerging markets such as Brazil, China, India, Indonesia and Russia.

Signaling well for the property industry are the remarkable increase in ultra-high net worth individuals worldwide and improving global economic fundamentals, plus stronger consumer confidence. Global GDP is assumed to grow at a 3.4% rate, the highest since 2011. Household spending will contribute significantly to GDP gains, lead by spending in the U.S., E.U. and China. China is still assumed to record a global best at a 4.5% rise in consumer spending during this year, which will rise further to 5.1% next year.

Indonesia's Matahari Department Store gains profit rise of half

One of Indonesia’s major department store operators, the Matahari Department Store, has revealed their profit has risen by half during the first quarter of higher sales, owing to higher spending amongst middle income households.

This is as net income between January and March rose to Rp123.1billion ($11million) - an increase from Rp82.2billion during the same quarter last year. Same store sales (which have been established for at least a year), rose by 9.3%.

The Matahari Department Store claims they continue to be positive across trading for the rest year, as they experience continuing strength in top line growth motivated by the increased disposable income in their targeted customer group.

Matahari owns 125 stores across 61 cities of Indonesia.

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