Landed residential and logistics warehouses in Greater Jakarta remain resilientDecember 17, 2021 / By
The pandemic continued to have an impact on most of the Greater Jakarta real estate market during 2021. Demand was relatively subdued in the office, retail, and condominium markets. However, some sectors proved to be resilient amid the crisis, especially modern logistics warehouses and landed residential property.
Despite the unprecedented uncertainty caused by Covid-19, both supply and demand for Greater Jakarta modern logistics warehouses reached their highest numbers in 2020 (see figure 1). Meanwhile, the net demand for the first half of 2021 exceeded half of the 2020 figure.
Demand for modern logistics warehouses remained robust, with 3PL providers and e-commerce firms as the main drivers. Due to limited supply, multi-tenant warehouses filled up relatively quickly to some extent once construction was completed. Hence, the overall occupancy of modern warehouses in Greater Jakarta remained healthy.
The logistics warehousing sector has changed rapidly over the past five years, with most stock as built-to-suit. Meanwhile, more high-quality supply has come online, much of it built speculatively for lease, as more developers recognise the opportunity.
A record year was also seen within the landed residential market in 2020. This positive trend continued through 2021, with net demand already achieving more than half of 2020’s numbers (see figure 2).
During times when condominium sale is weak, big local developers are shifting their focus to landed housing. These developers have large land banks that they either develop themselves or partner with an international name for development. During the pandemic, such developers have been actively launching new projects, including some new townships.
Demand for landed residential remains resilient since it is the type that Indonesians prefer the most; hence, it predominantly attracts buyers. Affordable units with attractive payment methods, including payments over longer terms, have become vital for successful sales. In addition, projects with complete facilities and good accessibility to toll roads and public transport usually receive better responses from the market.
Earlier this year, the government incentives on VAT exemption for built-residential units with specific prices also positively impacted the landed housing market. Buyers are taking advantage of this while developers push to sell off their existing inventory.
These two sectors are likely to remain attractive going forward due to Indonesia’s socio-economic potential. In addition, data centres have also emerged as a growth area, attracting both local and international players.