APPD Market Report Article


September 4, 2023

Yunus Karim, Head of Research, Indonesia


IDR 82,631


Automotive and 3PL sectors remain the main demand driver

  • Net absorption in the first half of 2023 was around 90,000 sqm. The majority was seen coming from the Cikarang area, with third-party logistics (3PL) dominating the tenant’s mix, either renting or relocating to new warehouses that have just been completed and are offering high-quality facilities.
  • Several vacant spaces in modern logistics warehouses in Marunda that e-commerce companies previously occupied have started to be filled again by new tenants, one of which was from a retailer that already has a presence in Jakarta through its store branches in major malls around Greater Jakarta.

Nine new facilities complete, primarily located in Cikarang

  • Several projects totalling almost 210,000 sqm entered the market in the first half of 2023, including Cainiao’s first project in Indonesia, and ESR’s second project, both located in the Cikarang area.
  • With the addition of new supply, the vacancy rate edged up to 11.9% but is considered to be healthy and expected to remain the same towards the second half of 2023. Several negotiations were still ongoing between potential tenants and developers who have just completed their facilities in the first half of 2023.

Overall rent growth remains modest across all submarkets

  • Base net rents were relatively stable at 0.26% h-o-h growth and with an annual growth of 0.29% y-o-y. Developers competed to offer attractive payment terms and flexibility to fulfil their potential tenants’ requirements in competitive locations, such as the Cikarang area, which has continually received substantial new supply.
  • Commercial flexibility, which can be related to both payment terms and technical specifications offered by developers, incorporates unique selling points such as strategies to accommodate tenants seeking space for various functions, including additional office space and mezzanine areas.

Outlook: More new players to be seen in Greater Jakarta

  • Third-party logistics will likely remain the main demand driver for modern warehouse space, while some e-commerce companies have stopped their expansion plans and reduced leased spaces. Future foreign direct investment in the electric vehicle sector might positively impact the demand for warehouse spaces.
  • Some newcomers have started constructing their modern warehouse facilities while actively seeking opportunities to add to their portfolio, acquire land, or build new developments. With these upcoming new projects, the overall occupancy rate will likely decline in the next 12 months.

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

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