APPD Market Report Article

Jakarta

November 28, 2022

Yunus Karim, Head of Research, Jakarta

-9.7%

IDR 2,554,350

Rents
Falling

Vacancy rate increases slightly due to new supply

  • A positive net demand was recorded at around 11,000 sqm. The largest take-ups were identified as coming from financial institutions and government-related sectors.
  • Aside from the aforementioned sectors, around 15% of the take-up in the CBD area was recorded as coming from several technology-based companies. In addition, energy-related sectors have also been actively looking for spaces.

First new building enters stock after a year with no new supply

  • One building, Rajawali Place with a total area of 47,439 sqm, was added to stock in 3Q22. It is the first newly completed building after a whole year with no new supply. This addition has boosted total stock for the Grade A office market in the CBD area to around 3,480,000 sqm.
  • Mori Building, Thamrin Nine Tower 1 (Autograph), and Thamrin Nine Tower 2 (Luminary) are three projects expected to complete by end-2022. While the Mori Building, at around 90,000 sqm, is located in the Sudirman area, the Thamrin Nine Towers, at around 134,000 sqm, are located in the Thamrin area. The completion of those three projects is expected to further suppress occupancy rates.

Rents continue to decline

  • Despite overall rents continuing to decline by around -2.2% q-o-q and -9.6% y-o-y due to limited occupier demand, competition for tenants in the Grade A office market persisted.
  • Affordable rents have become the essential factor to capture demand. The trend of decreasing rents has continued since mid-2015; it is the market’s response to the rising vacancy rate and increasing new supply.

Outlook: Market pressures likely to continue to the remaining quarter

  • Market pressures are anticipated to remain, with a significant number of landlords facing high vacancy rates due to the continued downsizing trend and massive upcoming supply.
  • Falling rents are expected to continue from 4Q22 to the next nine months of 2023 as demand remains limited and high vacancy rates persist.

Note: Jakarta Office refers to Jakarta's CBD Grade A office market.

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