RumahHokie.com (Jakarta) – Jakarta office market is expected to see around 600,000 sqm of future supply at the remainder of 2017, about 75% is located in the CBD (central business district) area.
According to a survey released by Colliers International Indonesia, the new additional supply will bring total office space in the CBD to 6 million sqm by the end of 2017.
Ferry Salanto, Senior Associate Director Research of Colliers International Indonesia estimates around 1.5 million sqm additional office space will enter the Jakarta market during 2018 – 2020, about 60% is located in the CBD.
“In Q3 2017 we saw strong confident level and we are expecting office demand to rise, mainly from leasing activities made by IT-based company (including e-commerce and co-working space), financing, shipping, and consumer goods,” said Ferry. “However, the occupancy rate in Q3 2017 was the lowest since 2009.”
Despite the expectation of strengthening demand, he added, large future supply in Q4 2017 will add more pressure to the occupancy performance.
“We forecast a below 80% occupancy in the CBD during 2017 – 2020. On the other hand, the average occupancy rate in outside the CBD is predicted to be slightly higher (than 80%),” Ferry explained.
The current large supply, particularly in 2017, will hit rental tariff. Rental rates were recorded down by 9% during 2016 – 2017 (year-to-date).
“We estimate a drop of 10% (year-on-year) in the CBD by the end of 2017, and less than 5% drop in outside CBD,” Ferry said.
Telkom Landmark Tower 2 officially became newly operating office building in the CBD during Q3 2017. Together with five office buildings which previously began in operation in H1 2017, it brought the cumulative supply in the CBD to 5.78 million sqm in Q3 2017.
“Afterwards, we estimate about 450,000 sqm of future office supply to enter the market in the remainder of 2017, contributed by six office buildings,” Ferry explained.
With a total of 12 new buildings in 2017, the cumulative supply is projected to reach 6 million sqm by the end of 2017, up 13% (YOY). The total office space in the CBD is expected to reach 7 million sqm within the next three years.