Financial and consulting firms the most active in 4Q23

• The closing quarter of 2023 saw a positive net demand of almost 4,400 sqm. Financial services and consulting firms outperformed the technology sector in terms of quarterly take-up.
• A new flex-space operator took over the space previously occupied by a major player in the flex-space market. Another prominent flex-space operator expanded its workspace in a Grade A office building.

Only one new project completion in 2023

• The completion of Thamrin Nine 2 – Luminary Tower, with a total area of around 40,000 sqm, has been postponed to 2024. With this update, Jakarta Mori Tower remains the only newly-added Grade A building in 2023.
• The vacancy rate in 2023 remained at a similar level compared to 2022 due to limited demand, and as only one new project entered the market.

Rents continue to decline, albeit at a slower pace

• Rents recorded a decline of 1.9% q-o-q and 8% y-o-y. Better-quality buildings located within preferred locations and with healthy occupancy have started to maintain their rent levels.
• Rents remained competitive, with the average monthly net rent hovering around IDR 200,000 per sqm.

Outlook: Flight-to-quality and downsizing trends to continue

• We anticipate a slightly improved occupancy rate in the next 12 months, driven by continued positive demand and significantly reduced new supply. The flight-to-quality and downsizing trends are expected to continue to shape the market in 2024.
• Despite a slower rate of decline and gradual market recovery, competitive rents are expected to impact the market in the coming 12 months, particularly for buildings with relatively high vacancy rates.