Demand for conventional offices surges<\/p>\n
The demand for conventional office space in Jakarta is
\nprojected to further gain ground this year in line with the more
\npromising outlook in the country's economy.<\/p>\n
Property consultant Procon estimates that the improvement in
\nbusiness confidence would result in an increase in both domestic
\nand foreign direct investments which would in turn push up the
\ndemand for office space particularly in Jakarta.<\/p>\n
"Nevertheless, the increase in the supply will result in the
\ndrop in the occupancy rate," Procon says in its latest property
\nmarket review.<\/p>\n
Rental costs are also projected to increase as most landlords
\nare likely to raise their rental rates and service charges to
\ncompensate for the high operational costs resulting from the
\nrecent increase in fuel prices, and most likely the increase in
\nelectricity rates within the next few months.<\/p>\n
In its report, Procon says that an additional supply of 86,000
\nsquare meters will enter the market this year. The new supply
\nwill come from several new office buildings including Plaza Asia,
\nMenara Bank Mega and Menara Nusa, which are scheduled for opening
\nduring the year. About 80 percent of the total supply will go to
\nthe office market in the Central Business District (CBD) area
\nalong Jl. Thamrin, Jl. Sudirman in Central Jakarta and Kuningan
\narea in South Jakarta.<\/p>\n
"An additional supply of about 321,600 sq m is expected to
\nenter the market in 2006," Procon says, adding that South Jakarta
\nwill remain the main location for the construction of new office
\nbuildings outside the CBD area.<\/p>\n
Rental transactions were relatively sluggish during the fourth
\nquarter of 2005. Most of the rental transactions during the
\nperiod were made by small and medium-size companies which occupy
\nbetween 50 sq m and 400 sq m.<\/p>\n
Outside the CBD area, most of the rental transactions were
\nbooked by newly built office buildings in South and Central
\nJakarta. Trading, manufacturing and telecommunication companies
\nare the main occupants of the new office buildings in those
\nareas.<\/p>\n
The net take-up rate within the CBD area during the fourth
\nquarter was recorded at a total of 8,667 sq m, down from 15,044
\nsq m in the previous quarter, due to the relocation of several
\noccupants from Menara Gracia. Most of the occupants terminated
\ntheir contracts in the building following the bombing attack on
\nthe Australian Embassy in September last year.<\/p>\n
Nevertheless, the total net take-up for the year 2004 reached
\n68,800 sq m, or an increase of nearly 85 percent from the level
\nin 2003, bringing the occupied space area to 2.4 million sq m.<\/p>\n
The high demand also resulted in an increase in the occupancy
\nrate to 79.4 percent at the end of 2004 from 78.8 percent at the
\nend of 2003.<\/p>\n
The gross rental rates of the office buildings located within
\nthe CBD area dropped by 0.5 percent to Rp 112,200 per sq m a
\nmonth during the fourth quarter due to a slight increase in the
\nvalue of the Indonesian currency against the U.S. dollar during
\nthe period.<\/p>\n
The recent increase in the fuel price and the planned
\nincreased in electricity rates within the next few months will
\nprompt landlords to increase service charges and the rental rate,
\nalbeit not significantly.<\/p>\n
The rental and service charges of the office buildings outside
\nthe CBD area were more stable compared to those in the CBD area
\nduring the September-December period, according to Procon in its
\nquarterly report.<\/p>\n
Transaction activities at the existing strata-titled office
\nbuildings remained inactive during the fourth quarter of 2005.
\nDuring the period, a major transaction was recorded within the
\nCBD area when 65 percent of the Menara BCD building on Jl.
\nSudirman was sold to a local bank. This was the second block sale
\ntaking place in the CBD area during 2005.<\/p>\n
The asking price of the strata-title office space remained
\nstable during the fourth quarter. Strata-titled office space of
\nhigher quality was offered at between Rp 11.5 million and Rp 14
\nmillion per sq m, while those of lower quality were offered at
\nbetween Rp 9 million and Rp 10.5 million per sq m.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/demand-for-conventional-offices-surges-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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