3PLs continue to drive demand, and activities from e-commerce and last mile are also seen

• 3PLs were known to be actively extending their spaces. Additionally, e-commerce firms and last-mile delivery providers were also observed expanding in parallel with their dynamic business strategies.
• Net absorption reached more than 31,000 sqm in H1 2024, limited by new supply. While new warehouses typically boasted enhanced specifications, existing projects with vacant spaces made efforts to attract new tenants by upgrading their building quality.

Tangerang sees new supply after an extended period of silence

• Four buildings were completed in H1 2024, adding over 58,000 sqm in total. These included the two warehouses of Maheswara Green Logistics, an expansion of an existing warehouse in Bekasi, and a new warehouse in Tangerang.
• Another five projects are expected to complete. Despite this year’s anticipated new supply being lower than the previous record-breaking year, the limited supply of approximately 168,000 sqm is expected to drive the vacancy rate down to below 10%.

Landlords offer flexible leasing and payment terms to grab tenants

• The typical lease period ranges from 1 to 5 years, with annual or semi-annual payment terms. However, e-commerce and last mile delivery services preferred shorter lease terms.
• Competitive rents were observed in Cikarang. Meanwhile, new projects in locations closer to the city centre could offer relatively higher asking prices than those located within industrial estates.

Outlook: New developments to emerge in untapped locations

• The new tenant industry, such as electric vehicles, remains concentrated in the Cikarang and Karawang areas due to their established manufacturing ecosystems and the presence of their supporting component providers.
• Alongside the renowned eastern part of Jakarta, other subdistricts with favourable locations are now in the spotlight. These emerging locations present distinct landscapes and challenges, making them attractive prospects for the logistics market.