Indonesia’s retail property sector is undergoing fundamental transformation as consumer shopping behaviors continue to evolve in the digital age. ProSpace Indonesia’s Retail Real Estate Report reveals that 42% of shopping mall space has been reconfigured since 2022, reflecting changing tenant mix and space utilization strategies.
Food and beverage operators now occupy 27% of prime mall space, up from 18% in 2020, while entertainment and lifestyle services have expanded to 21% from 14%. Meanwhile, pure merchandise retail has declined to 47% of total space, with fashion retailers particularly reducing their physical footprints.
“Retail spaces are evolving from pure transaction environments to experience destinations where shopping is just one component of the value proposition,” explains Ratna Kusumawijaya, Retail Property Specialist at ProSpace. “The most successful malls have effectively become community hubs combining social, entertainment, and service elements.”
Health and wellness tenants represent the fastest-growing category, expanding by 78% in mall presence since 2022. This includes fitness centers, medical clinics, spa facilities, and nutrition-focused retailers. Meanwhile, pop-up retail concepts provide flexibility for both landlords and brands while creating novelty for consumers.
Technology integration has accelerated, with 67% of major malls implementing digital directories, loyalty programs, and parking management systems. Meanwhile, “phygital” retail concepts blending online and offline experiences gain traction among innovative brands.
Secondary and neighborhood malls show the most challenging performance metrics, with vacancy rates averaging 27% compared to 12% in prime malls. Repurposing strategies including conversion to mixed-use developments, offices, or logistics facilities are increasingly implemented for underperforming assets.
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