The logistics and industrial markets in Greater Jakarta are experiencing remarkable growth. The market is currently witnessing a strong supply surge, with nearly 500,000 sqm of modern logistics warehousing set to be completed this year, accounting for the highest new supply on record. Furthermore, the total stock of modern logistics warehouses in Greater Jakarta is around 2.3 million sqm, which will likely increase to more than 3 million in the next two years.

Despite the challenging macroeconomic environment in 2023, Greater Jakarta remains an attractive investment destination for foreign and local investors. Developers continue to look for sites in Greater Jakarta. Due to limited available land in densely populated markets and relatively higher land prices, one strategy is to develop a multi-storey warehouse, offering more space over similar floor areas but vertically. This concept is common abroad but is quite new in Indonesia.

Figure 1: Existing supply type based on the number of projects; single-storey vs multi-storey

Source: JLL Indonesia, 1Q23

The multi-storey warehouse was introduced by PT Mega Manunggal Property, Tbk. (MMP), with its first two storeys Built-to-Suit building for Lazada in 2017 in Depok as a Mega Distribution Centre. In 2018, MMP offered its first speculatively built two-storey warehouse when it completed Block AE Warehouse in MM2100. Meanwhile, LOGOS entered the Indonesian market by offering the first three-storey warehouse in Bekasi in 2020. Daiwa also completed its two-storey warehouse in 2020, followed by another development by LOGOS in Bogor, and the latest being MMP Pondok Ungu, Bekasi, in 2021.

While it takes quite some time for the market to accept a new concept, multi-storey warehouses have received, to some extent, a positive response, as evidenced by healthy occupancy rates.

Some factors that need to be considered when developing multi-storey warehouses are tenant arrangements based on floor capacity, which is usually lighter on the upper floors compared to the lower floors, the availability of a circular driving radius, and adequate parking areas for vehicles, including heavy-duty trucks.

Figure 2: Future supply type based on the number of projects; single-storey vs multi-storey

Source: JLL Indonesia, 1Q23

Currently, there are only six operational multi-storey warehouse projects in Greater Jakarta. By 2025, future supply is expected to include eight multi-storey warehouses out of a total of 19 modern logistics warehousing projects. Multi-storey warehouses will dominate future supply much more than in previous years. Greater Jakarta will also see the first five-storey warehouse from a local developer entering the market.

Besides multi-storey warehouses, developers can implement modern logistics warehouses with high ceilings offering more cubic space and storage capacity, or mezzanine style layouts, racking systems, semi-automation systems and expansion spaces to optimise operational efficiency and flexibility.

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