APPD Market Report Article

Greater Jakarta

August 26, 2022

Yunus Karim, Head of Research, Jakarta

1.2%

IDR 82,102

Rents
Rising

Overall net absorption remains positive

  • Greater Jakarta recorded relatively lower net absorption due to a limited amount of new supply. Demand has been heavily centred in Jakarta, Bekasi and Cikarang, due to accessibility and proximity to the city centre.
  • In addition to demand from third-party logistics (3PLs) and e-commerce tenants, enquiries have also come from the automotive sector, FMCG, pharmaceuticals, expanding e-commerce from fresh food/grocery delivery service providers, and new e-commerce players looking for warehouse space with a relatively large yard lot.

Only one new project enters the market

  • GLC Karawang 2 (Phase 1) in Karawang entered the market in 1H22, with a floor area of 22,845 sqm, adding around 20% to the supply in Karawang. Most of the Greater Jakarta modern warehouse supply remains concentrated in Bekasi-Cikarang and Jakarta areas.
  • Some newcomers have started to develop their modern warehouse facilities in the Cikarang area, while other developers and investors remain actively looking for opportunities.

Overall rents maintain modest growth

  • Overall rent growth remained slow compared to 2H21 but continued to record positive gains. Rent growth was modest given the competitive landscape and the expected delivery of new supply to the market that is mostly located in Bekasi and Cikarang.
  • Similar annual rent growth in Greater Jakarta may be expected in the upcoming few years, especially in areas with massive amounts of new supply, since developers are offering competitive prices in order to attract tenants.

Outlook: New completions to drive occupier demand

  • Despite around 180,000 sqm of supply expected by year-end, the overall occupancy rate is likely to remain healthy as properties in certain areas are reported to have limited space available for lease.
  • 3PLs and e-commerce businesses are driving the rise in occupier demand for warehouse space in the long term, backed by enhanced infrastructure support from the government.

Note: Greater Jakarta Logistics & Industrial refers to the Greater Jakarta prime logistics market.

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