Demand for leased apartments may further decline<\/p>\n
Rikza Abdullah, Contributor, Jakarta<\/p>\n
The demand for leased apartments in the greater Jakarta area
\nis likely to decline this year due to worries about terrorist
\nattacks but the sales of strata-titled condominiums may continue
\nincreasing at a slow rate, according to property analysts.<\/p>\n
\"In the leased apartment market, there will be a decreasing
\ntrend in the occupancy rates due to worries about terrorist
\nattacks and threats to foreigners,\" Adhitya Wisesa, manager\/head
\nfor property research and consultancy of Colliers International
\nIndonesia, said here on Friday.<\/p>\n
He said that many expatriates went back to their home
\ncountries and found other jobs there, while foreign investors
\ncanceled their projects in, and business trips to Indonesia. This
\nnegatively affected demand for leased apartments in Jakarta.<\/p>\n
Dharmesti Sindhunatha, senior manager for marketing and
\ncommunications at property consulting company PT Procon Indah,
\nsaid the high growth in the supply of strata-titled condominiums
\nwould also affect growth in the rental apartment market.<\/p>\n
She said that in 2002, demand for leased apartments still
\ncontinued its recovery trend after being hard hit by the economic
\ncrisis that began in 1997. The increasing demand was marked by
\nthe additional leasing of 535 units, as compared to only 375
\nunits taken up in 2001. The additional leasing increased the
\noccupancy rate of leased apartments to 63.5 percent last year
\nfrom 59.8 percent in 2001.<\/p>\n
Adhitya quoted a more positive figure, 69.1 percent, for
\n2002's occupancy rate.<\/p>\n
According to Colliers International, the number of leased
\napartment units, which stood at about 6,200 as of the end of
\n2001, increased by 100 after the completion of the Pondok Indah
\nGolf Apartment Tower 2 in South Jakarta last year.<\/p>\n
Out of the leased apartments, around one third were serviced
\nand the other two thirds were non-serviced ones.<\/p>\n
Adhitya said last year's increase in the demand was driven
\nparticularly by an increase in the number of expatriates working
\nin Jakarta and the rising trend of expatriates to lease
\napartments, instead of houses, due to economical, security and
\npersonal safety concerns. The number of expatriates working in
\nthe capital city, which dropped from about 40,000 before the
\neconomic crisis to about 10,000 in 1998, increased to around
\n12,000-13,000 last year.<\/p>\n
This rising demand motivated developers and owners to lease
\ntheir strata-titled apartments\/condominiums at more competitive
\nrates with more flexible terms, resulting in the expansion of the
\nmarket share of condominium units for lease and the contraction
\nof rental apartments' share.<\/p>\n
According to Dharmesti, the number of strata-titled apartments
\nleased to tenants by their developers or owners reached 8,740 in
\n2002.<\/p>\n
But the demand for leased apartments was on its downward trend
\nfollowing the Oct. 12 terrorist attacks in Bali, which killed
\nmore than 190 people, and targeted Westerners.<\/p>\n
Adhitya said the demand for premium-grade leased apartments
\nwould continue declining this year but that secondary-grade units
\nmight enjoy slight growth because the latter's rental rates were
\nmostly affordable for local executives.<\/p>\n
He said this year would also witness the growth of demand for
\nstrata-titled apartments as this sector was enjoying a high
\noccupancy rate.<\/p>\n
Colliers International puts the figure for the occupancy rate
\nof strata-titled apartments at 79.6 percent in 2002, while Procon
\nIndah estimates it at 79.2 percent, indicating a 2.1 percent
\nincrease from 77.1 percent in the previous year.<\/p>\n
As of the end of 2002, the supply of strata-titled apartments
\nin Jakarta, according to Procon Indah, increased by 0.9 percent
\nto about 26,550 over the previous year.<\/p>\n
\"The total take-up (of strata-titled apartments) during 2002
\nwas recorded at 631 units, a significant increase as compared to
\nonly 210 units in 2001,\" Dharmesti said.<\/p>\n
Adhitya commented that although the imposition of a 20-percent
\nluxury tax on the sales of new apartments was still considered an
\nobstacle for the residential property market, the real demand
\ncontinued to indicate a positive growth.<\/p>\n
But the trend, he said, was that buyers were no longer
\ninterested in the available strata-titled apartments. They now
\npreferred to buy units that were currently being constructed or
\nwere even still under a plan for construction.<\/p>\n
The 360-unit Bellagio Mega Kuningan apartment building, which
\nwill be built by PT Sentra Lingga Perkasa in South Jakarta, for
\nexample, had already sold almost 90 percent of its units as of
\nOctober, even though its construction might not be completed
\nuntil 2005.<\/p>\n
PT Aneka Bina Lestari Senayan has also been successful in
\nselling its units facing the Central Business District (CBD) of
\nits 140-unit Pinnacle apartment building, which it plans to
\nconstruct on Jl. Sudirman in South Jakarta. The other units would
\nbe offered for lease after the completion in 2005.<\/p>\n
Besides the Bellagio Mega Kuningan and Pinnacle, the other
\napartment buildings that will be constructed in the city include
\nthe 1,000-unit Mediterania Gajah Mada in West Jakarta, the 1,500-
\nunit Mediterania Palace at Kemayoran, Central Jakarta, the 68-
\nunit SCBD Suites in South Jakarta, the 180-unit Thamrin Exchange
\nSquare in Central Jakarta, the 200-unit Grand Permata Hijau in
\nSouth Jakarta and the 700-unit Pakubuwono Exclusive Condominiums
\nin South Jakarta.<\/p>\n
Adhitya said most buyers of strata-titled apartments were
\nthose who procured them for an investment purpose. The interest
\nof such people in buying new apartments would not be affected by
\nthe imposition of a luxury tax nor by the possible increase in
\nprices resulting from the recent hikes in utility prices.
\nEarlier this month, the government simultaneously increased fuel
\nprices by an average of 22 percent, electricity billing rates by
\n6 percent and telephone charges by 15 percent. The rise in
\ntelephone charges was put on hold on Wednesday following strong
\nprotests nationwide.<\/p>\n
Thus, \"Colliers International concluded that in the strata-
\ntitled market, the premium-grade apartments will still enjoy a
\nhigh occupancy rate in 2003,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/demand-for-leased-apartments-may-further-decline-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}