Business getting better as economy shows its strength<\/p>\n
Debbie A. Lubis, Contributor, Jakarta<\/p>\n
As the country's economy begins to show signs of recovery and
\nthe security situation has improved, more and more businesspeople
\nand expatriates are coming to Jakarta, making the serviced-
\napartments business a lucrative venture.<\/p>\n
Major serviced apartments, particularly in Jakarta, reported
\nan occupancy rate of between 80 percent to 100 percent in 2003.
\nOccupancy is expected to remain high this year, despite fears
\nthat the general election and the country's first presidential
\nelection on July 5, could incite social unrest.<\/p>\n
\"The elections are not seen as a security threat and that's
\nwhy we are optimistic that the service industry will continue to
\ngrow,\" said Ratu Neilla, marketing manager of Plaza Residences,
\nwhich is located above the Hotel InterContinental MidPlaza on Jl.
\nJend. Sudirman, Central Jakarta.<\/p>\n
Neilla said that more foreign investors had been drawn to the
\ncountry, while expatriates who had left Indonesia following the
\nfinancial crisis, had already returned.<\/p>\n
Indications of the improved economic situation include the
\nstrengthening of the rupiah and the low inflation rate.<\/p>\n
Economic growth is expected to increase to five percent this
\nyear, from about 4.5 percent last year. The inflation rate is
\nalso projected to continue to decline to between 5 percent and 6
\npercent this year, from between 6 percent and 7 percent in 2003.<\/p>\n
However, economic analysts estimate that foreign investment
\nwill remain low, despite improvements in the economy, as many
\nforeign investors are waiting for the results of the elections.<\/p>\n
With 257 apartments -- both furnished and unfurnished -- the
\nPlaza Residences has enjoyed an occupancy rate of 100 percent
\nover the last three years.<\/p>\n
\"Until today we still maintain a good occupancy-rate. Most of
\nour tenants prefer to have short-term contracts, but only because
\nthey are waiting to see what happens during and after the
\nelections. Moreover, we still have 28 prospective tenants on our
\nwaiting list,\" Neilla said.<\/p>\n
This optimistic outlook is shared by Yuliet Lokananta of
\nAllson Residence, who works in public relations, \"The
\nserviced-apartments business is looking good this year, nowadays
\nmost people choose to stay in a serviced apartment rather than a
\nhotel,\" she said. Allson Residence has 117 apartments and is
\nlocated in Senen, Central Jakarta.<\/p>\n
Grace Alviar, the director of communications of Hotel
\nBorobudur Jakarta is also bullish about the apartment business
\nthis year despite the elections.<\/p>\n
\"We believe that the demand for our Garden Wing Serviced
\nApartments will continue to increase this year,\" Grace said.<\/p>\n
The Garden Wing apartments always had high occupancy rates
\nduring the elections, she said, adding that many foreign
\njournalists and political observers stayed at the apartments
\nduring the general elections in 1999.<\/p>\n
Dwi Lies Anggraeni, the Aston Hotel Jakarta director of sales,
\nsaid their apartment business would grow party because of the
\nchanging tastes of visitors.<\/p>\n
Many business people chose to stay in serviced apartments
\nbecause they guaranteed more comfort and privacy than hotels, she
\nsaid.<\/p>\n
Most of the city's serviced apartments are located in close
\nproximity to the central business district, on Jl. Sudirman,
\nCentral Jakarta. They generally provide excellent service, such
\nas 24-hour security and comfortable rooms, with quality
\nfurnishings and health and sports facilities.<\/p>\n
In addition, they usually provide bath towels and bed linen,
\nfree tap water and electricity, a television with access to cable
\nvision, and a kitchen with refrigerator, electric stove, oven,
\nkitchen utensils and microwave.<\/p>\n
Serviced apartments are generally rented at a monthly rate of
\nat least Rp 17 million (about US$2,000) for a two-bedroom
\napartment. Tenants are mostly expatriates who work for
\nmultinational companies and embassies.<\/p>\n
According to property consultant Procon Indah, the average
\noccupancy rate of Jakarta's rental apartments (including serviced
\napartments) reached 66.5 percent as of Dec. 23, leaving 4,998
\nunits vacant.<\/p>\n
In its fourth quarter report, Procon said that the total
\nannual \"takeup\" (space occupied) in 2003 was 5.2 percent lower
\nthan last year's figure of 535 units.<\/p>\n
The cumulative demand as of December, 2003, totaled 9,953
\nunits, an increase of about 27 percent from 7,812 in June 1997,
\njust before the financial crisis hit the country.<\/p>\n
The rental rate was relatively stable in 2003, although there
\nwas a slight change due to the depreciation of the rupiah against
\nthe U.S. dollar.<\/p>\n
Procon says, that the average monthly rental-rate for serviced
\napartments in the fourth quarter of last year was $18.78 per
\nsquare-meter, while that of non-serviced rental apartments was
\n$14.55 per sq. meter, for those located in prime areas, and $9.86
\nper sq. meter for those in secondary areas.<\/p>\n
An additional supply of 37 units was recorded during the
\nfourth quarter of 2003, bringing the total cumulative supply to
\n14,936 units at the end of 2003.<\/p>\n
The property consultant says that additional supply of non-
\nserviced rental apartments is expected to come from Boelevard
\nPark Plaza in West Jakarta and Four Seasons Regent Residence
\nTower 4, which are both scheduled for completion in 2004.<\/p>\n
For serviced apartments, additional supply will come from
\nPluit Gold Park Regency in North Jakarta and Aston Rosuna
\nResidence in South Jakarta, which are also scheduled for
\ncompletion this year, Procon says.<\/p>",
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