Industrial and Residential: The Primary Focus for Investors in Indonesia

In Indonesia, two en-bloc transactions were made in Q1 2018 totaling USD86 million.

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Ngoro Industrial Park, Mojokerto (Anto Erawan - RumahHokie.com)

RumahHokie.com (Jakarta) – Global real estate services company, Colliers International in its “Asia Market Snapshot Q1 2018” noted, in the past quarter, Indonesia market has seen several significant investment transactions, especially in the residential market and industrial sectors.

Read More: Survey: All Property Types Enjoyed Rising Prices

“In the next quarter, we believe the industrial and residential sectors will remain the primary focus for many investors. There has been a substantial increase in inquiries we have received from foreign investors planning to enter the market,” said Steve Atherton, Director of Capital Markets and Investment Services at Colliers International Indonesia.

In Indonesia, he added, two en-bloc transactions were made in Q1 2018 totaling USD86 million.

Read More: Indonesia Property Market in 2018 – 2019, What Will Happen?

Many foreign investors are entering the residential market by acquiring land from developers or forming Joint Ventures (JVs) with Indonesian developers.

“We are also witnessing the first multi-storey logistic warehouse development by a foreign institutional developer. In the office sector, non-traditional tenants such as start-up companies are acquiring the largest spaces. However, they are paying low rents and putting downward pressure on investor returns,” said Atherton.

Massive Infrastructure Investments
While the first quarter of 2018 proved unsettled, with concerns about a global trade war and heightened volatility pressuring global markets, Asia’s property sector remains buoyant overall, supported by the region’s robust growth and forward-looking government policies.

Read More: Infrastructure Development as The Key Factor to Improve Competitiveness

Terence Tang, Managing Director of Asia Capital Markets and Investment Services at Colliers International explained, massive infrastructure investments in countries such as Japan, China and Indonesia will continue to create opportunities for investors, while major markets like Hong Kong and Singapore are likely to benefit from the perception of property as a relatively safe haven in uncertain times.

“Many Asian governments are pursuing ambitious infrastructure projects that have the potential to transform property markets. In Indonesia, for example, an unprecedented government spending drive has boosted the outlook for developments around up and coming transportation hubs,” Tang concluded.

Anto Erawan
anto.erawan@rumahhokie.com

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