Demand for industrial property in Jakarta during the second quarter rose to its strongest in the past five years, with land prices and rental rates expected to continue growing even as more supply comes onto the market, a property consultancy said on Wednesday.
Arief Rahardjo, associate director at PT Cushman & Wakefield Indonesia, told the Jakarta Globe that foreign investors launching new projects had helped boost demand for industrial property this year.
“Last year, domestic investors dominated the industrial sector. But today, foreign investors who were on hiatus before - like investors from Japan - are now back and aiming for the same property,” he said.
Arief said government regulations encouraging the development of industrial estates had helped the market for industrial property remain robust, especially as the country’s economic recovery gained traction.
“Though there was a relative increase in inflation, today’s indicators were so conducive to property sectors that it boosted demand in the second quarter of this year, especially industrial areas, which are really prominent,” he said.
Cushman also projected that demand across all property sectors would continue to improve this year given relatively low interest rates and the strong economy.
“Obviously, there is nothing negative here. Mostly, they are going stable and steadily increasing,” managing director David Cheadle said.
Meanwhile, sales of condominiums in the first half of the year soared to 4,449 units, an increase of 169 percent over the same period last year.
First-half sales were already at 70 percent of last year’s entire sales. “Demand for the middle and upper-middle segments still dominated the market,” Cushman analyst Elizabeth Tanti Noviana said.