APPD Market Report Article

Greater Jakarta

February 28, 2022

3.0%

IDR 81,687

Rents
Rising

Net absorption remains positive

  • Occupier demand remained, yet there was lower net absorption of almost 50,000 sqm in 2H21 due to no new supply. For 2021, net absorption totalled around 230,000 sqm.
  • Inquiries predominantly came from third-party logistics and e-commerce firms that continued to expand by renting modern warehouse space in the Jabodetabek area. Demand from FMCG, retail and cold storage was also seen, which was triggered by the increase in online purchases.

Year-end vacancy declines to 6.5% due to limited supply

  • Due to the lack of new supply in 2H21, the overall vacancy rate declined to 6.5%. Most of the build-to-suit warehouses were fully occupied, while the occupancy of multi-tenant warehouses was continuously filling up.
  • Supply has been concentrated in the eastern Jakarta area, with four projects under construction scheduled to open by early 2022 in Bekasi, Cikarang and Karawang.

Rents continue to see modest growth

  • Overall rent growth was relatively slow compared to 1H21 but continued to record positive gains.
  • Rent growth in locations to the east of Jakarta was modest given the competitive landscape. Landlords were encouraged to offer competitive prices to attract tenants.

Outlook: Strong demand is expected to continue throughout 2022

  • Upcoming projects will be in the eastern part of Jakarta, with improving infrastructure and accessibility playing a key role in future demand. The rise of online purchases is also likely to contribute to the expansion of warehouses into other areas spread across Greater Jakarta.
  • Robust leasing demand will be led by third-party logistics and e-commerce firms, indicating an attractive market from the perspective of developers and investors.
Note: Greater Jakarta Logistics & Industrial refers to the Greater Jakarta prime logistics market.

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