Due to the Covid-19 pandemic, the business of shopping centers in Indonesia are still in severe condition, and in 2021 even worse than last year. In 2020 shopping center managements still has reserve fund, so it is still able to survive with the fund. The fund depleted in 2020, and hence they practically do not have enough reserve fund anymore, or even suffering deficit.
The Indonesian Shopping Center Management Association (APPBI) stated that the rate of visits to shopping centers has increased gradually since the easing was imposed. However, the increase is still likely to be slow. The average rate of visits to shopping centers is currently still around the level of 20%-30% compared to normal conditions, before the Covid-19 pandemic. It is expected that the trend of increasing visits to shopping centers will continue to increase along with various easing imposed by the government.
When the covid-19 case again exploded and the emergency PPKM imposed, shopping centers and malls collapsed due to operational closures. The potential loss of revenue due to the closure is very large, estimated at Rp5 trillion per month. The value is the income received by the Shopping Centers, and not the value of the sale. When they are temporarily closed, the shopping center has the hassle of losing revenue of around Rp5 trillion every month. Of course, it still takes a long time to be able to achieve business conditions such as before the enactment of Emergency PPKM and PPKM based on Level. It is estimated that until the end of 2021 the business condition of the Shopping Center is still under pressure.
Overall, the prospects of the Shopping Center business going forward are still good. That is because Shopping Center is one of the community facilities to meet basic needs and living needs of the community. Retail business sector is also included in public consumption sector that still dominates the Indonesian economy. So that the domestic trade sector still plays a very important role in supporting Indonesia’s national economy.
Reflecting on the expansionary mall development plan currently carried out by property companies, he saw that shopping center efforts will gradually recover to normal by the time the national vaccination rate has reached the specified target. PPKM easing increases shopping center visits to 10% The construction of a Shopping Center takes at least 24 months, so if there are currently developer start building Shopping Centers then of course it is expected that 24 months from now the condition of the Covid-19 pandemic has been much handled and well controlled even maybe the pandemic is over.
Now is indeed the right time for developers to set up a new shopping center. Because currently all shopping centers, both malls and others in Indonesia, have been operational again. Although with various restrictions such as visitor capacity, the age of visitors and some business categories that are still not allowed to operate.
As of the end of 2019, there are 321 shopping centers of various classes and sizes operating throughout Indonesia. Of these, only a few luxurious shopping centers like Pacific Place, Plaza Senayan, Plaza Indonesia, and Senayan City, and all are in Jakarta. While other shopping centers fall into the category of upper, middle, and lower class. However, the largest and largest shopping center is in Surabaya, East Java, namely Pakuwon Mall Surabaya.