Moratorium on new malls leads to retail space shortage in Indonesia
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The retail space market in Jakarta anticipates limited future supply due to a moratorium policy for new mall development, a global property consultant company Savills PCI Research said in a report released on Wednesday.
The capital city put in place the mall development moratorium in late 2011 under then governor Fauzi Bowo, after the city experienced a boom in mall construction, triggering concerns that it may lead to deteriorating quality of life, through greater traffic jams and less public space.
In September 2013, Fauzi’s successor Joko Widodo extended the moratorium, but the current governor, Basuki Tjahaja Purnama, has not outright banned mall developments, saying as long as the new development does not exacerbate traffic congestion, he will allow it to go ahead.
Questions & Answers
Q.What concerns led to the decision to implement a moratorium on new mall construction?
What concerns led to the decision to implement a moratorium on new mall construction?
The boom in mall construction triggered concerns that it could lead to a deteriorating quality of life in Jakarta. Specific issues mentioned were greater traffic jams and a reduction in public space.
Q.What is the current stance of Governor Basuki Tjahaja Purnama regarding new mall developments?
What is the current stance of Governor Basuki Tjahaja Purnama regarding new mall developments?
The current governor has not outright banned new mall developments. He will allow them to proceed as long as the new construction does not worsen traffic congestion in the city.
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