Jakarta’s CBD (Central Business District) is Indonesia’s most thriving commercial area. With numerous commercial buildings situated in the bordering areas of Central and South Jakarta, this area known as the “golden triangle offers more than 3 million square meters of Grade A office space, including Premium office buildings, and constitutes of around 51% of the total stock of office in the CBD.

The CBD has witnessed an influx of new Grade A office supplies since 2015, driving most of the demand as tenants seek flight-to-quality opportunities. The market was initially strong during 2017-2019 due to the expansion of technology and the flex-space sector. However, COVID-19 disrupted the momentum in 2020, weakening demand in 2021 due to lockdowns, social restrictions, and new workplace strategies. Nevertheless, a gradual recovery commenced in mid-2022, and the situation continued to improve throughout 2023 with a rise in the return-to-office rate.

Technology captured most office space compared with all other industries

Over the past two years, we identified around 275 institutions or tenants that can be categorised into ten sectors, which together leased approximately 100,000 sqm of Grade A office space in 2022 and slightly over 150,000 sqm in 2023.

Although there was an overall upward trend, quarterly demand and its composition by sector varied significantly. The technology sector consistently leased over 8,000 sqm of office space per quarter, while the other top-contributing sectors (financial services, mining and energy, professional services, and manufacturing) leased between 2,800 and 5,200 sqm per quarter on average. Sectors, including flex space, government and NGO/NPO, construction and real estate, transportation and logistics, and others* showed less significance but also experienced fluctuations from 2022 to 2023.

Figure 1: Comparison of the 10 sectors’ quarterly demand of 2022 & 2023

Source: JLL Indonesia Research, 1Q24

Demand shifts were observed from 2022 to 2023. flex space (+5%), transportation and logistics (+2.6%), and energy and mining (+2.3%) experienced increased demand, while construction and real estate (-6.3%), manufacturing (-3.7%), and government and NGO/NPO (-3%) saw a decline in capturing Grade A office space.

The technology sector secured nearly 70,000 sqm of leased office space across Grade A buildings. The non-technology group, representing more conventional industries, accounted for 72% of leased office space in Grade A buildings during those years. Although the non-technology group appeared significant in driving overall demand, the technology sector (27.6%) emerged as the leading industry in 2022 and 2023, surpassing top performers like financial services (16.4%), energy and mining (11.4%), professional services (10.9%), and manufacturing (8.8%).

Figure 2: Technology vs non-technology demand size in transition years

Source: JLL Indonesia Research, 1Q24

In addition to the flight-to-quality and cost-saving strategy, sustainability has emerged as one of the key factors in attracting office demand during the transition years. In 2022, approximately 53% of Grade A office transactions were conducted in several green-certified buildings. However, there was a significant improvement in 2023, with the percentage reaching 86%, which means that almost 120,000 sqm of office space was leased in Grade A green-certified buildings.

Figure 3: Green building and technology sector in office demand

Source: JLL Indonesia Research, 1Q24

The technology sector remained prominent in driving office demand in both 2022 and 2023. Furthermore, sustainability, represented by green-certified office buildings, has emerged as a game-changer. The sustainability trend is shaping market dynamics in the Grade A office and influencing shifting trends, particularly among multinational companies.

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