LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Retail Market OverviewAccording to BPS, private consumption in 2006 was estimated at Rp. 2,093 trillion, representing 62.7% oftotal GDP. Private consumption (current prices) growth over the past five years has averaged around 15%per annum, while GDP (current price) growth has averaged 10% per annum.Apart from increases in income, retail spending growth has also been boosted by a lifestyle shift towards ahigher level of consumerism. This is particularly the case in major cities such as Jakarta, Surabaya,Bandung, Medan, Makassar and Bali. Furthermore, the growing presence of international retail brands,the expansion of local retail franchises and higher loan disbursements to retail consumers have changedthe way people shop and consequently altered their spending pattern.Data from Bank Indonesia indicate that over the past 5-years (from 2001 to 2006), non-property loanshave increased at an average of approximately 29% per annum. Jakarta Province holds the largestproportion of such loans, accounting for 37% of the total.Based on ACNielsen’s surveys, household spending has increased by between 9% and 21% over the pastfive years in major Indonesia urban markets.Table 2.2.1 Household expenditure in Indonesia 2001-2006Average annual householdexpenditure (Rp.)Total householdexpenditure(Rp. billions)Cities 2001 2006 2001 2006Averagegrowth2001-2006Jakarta . . . . . . . . . . . . . . . . . . . . . . . . . . 10,722,000 17,898,000 19,277 35,273 12.8%Botabek . . . . . . . . . . . . . . . . . . . . . . . . . . 6,768,000 12,576,000 13,699 35,979 21.3%Bandung . . . . . . . . . . . . . . . . . . . . . . . . . 10,812,000 17,532,000 4,825 8,317 11.5%Surabaya . . . . . . . . . . . . . . . . . . . . . . . . . 10,614,000 15,864,000 7,575 11,619 8.9%Semarang . . . . . . . . . . . . . . . . . . . . . . . . 9,522,000 15,522,000 2,690 5,554 15.6%Medan . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,904,000 17,400,000 5,182 8,113 9.4%Source: ACNielsen SurveysThe following table provides the household expenditure of middle income group (Social EconomicSurvey B and C).Table 2.2.2 Household expenditure of the middle class in Indonesia 2001-2006Total householdexpenditure ofmiddle class(Rp. billions)Cities 2001 2006Averagegrowth2001-2006Jakarta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,561 17,276 10%Botabek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,493 25,817 28%Bandung. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,793 4,304 9%Surabaya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,295 6,293 8%Semarang. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758 3,691 16%Medan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,542 5,103 8%Source: ACNielsen SurveysHousehold expenditure of middle income group in the Botabek area, which includes Bogor, Depok,Tangerang and Bekasi, reached the highest average growth level at 28% per annum over the past fiveyears. This high growth was driven mainly by the increase in residential estate development in theperimeter suburbs of Jakarta which increased the number of middle class households in the area.Overall, real retail spending is expected to increase gradually over the next few years in urban areas, whilegrowth is likely to be slower in rural areas.F-24