Despite an increase in supply, Greater Jakarta witnessed a slide in sales of office space during the second quarter of the year compared to the January-March period.
In the second quarter, as reported Friday by property developer and consultant Coldwell Banker Commercial Indonesia, the supply of office space rose by 17,850 square meters, or 42.8 percent, from the first three months of 2007, bringing the total stock to 473,660 square meters.
The increase in supply, however, did not translate into sales growth, with sales during the period in fact declining by 17 percent. Only 10,300 square meters of space were traded during the April-June period.
This resulted in an occupancy level of 83 percent in the central business district and 60 percent in secondary areas.
However, according to director Nico Kiroyan, in the second quarter many businesses switched offices to new ones, meaning that the increase in office supply was actually boosted by the coming back onto the market of previously occupied office space.
"So, the decline in sales was not because of a lack of demand. It was actually triggered by limited new space being offered.
"Most companies wanted space in new buildings instead of old ones, but there are fewer new buildings than old ones. As a result, many of them deferred purchasing," he said Friday.
The demand for office space, he said, had actually increased since last year because many firms considered buying space as being less costly than leasing it in the long term.
Unlike sales, the leasing business experienced increases in both supply and turnover during the second quarter.
As new supply rose by 26.32 percent over the January-March period, rentals increased by 6 percent, with the occupancy rate rising by 0.55 points to 82.6 percent. The total stock of leasable office space stood at 5.40 million square meters as of the end of the second quarter.
In the residential sector, condominium and apartment sales grew by 2.85 percent and 5.88 percent, respectively.
By the end of June, the condominium stock stood at 48,104 units, with the take-up rate for existing projects standing at 86.08 percent and that for projects under construction at 45.08 percent.
The total stock of apartments, meanwhile, stood at 11,036 units, with an occupancy rate of 83.45 percent in primary areas and 66.52 percent in secondary locations.
And in the industrial sector, sales in the April-June period slid by 14.5 percent compared to the first quarter.
The total stock of industrial land stood at 7,422 hectares as of the end of the second quarter, with an overall take-up rate of 72 percent. (11)