Foreign investors still wary of property sector<\/p>\n
JAKARTA (JP): Foreign investors have held off on big buys of
\nproperties of local debt-ridden developers because they find no
\nsigns of imminent economic recovery, property consultant First
\nPacific Davies said on Thursday.<\/p>\n
Company executive Jay Smith said that although local
\nproperties were priced relatively cheaply in U.S. dollar terms,
\ncost was not the only concern for investors.<\/p>\n
\"Other considerations are signs that the economic recovery
\nwill start soon,\" Smith said at a news conference to release the
\nfirm's third-quarter analysis of the local property market.<\/p>\n
\"When it will start to recover? How strong will the economy be
\nwhen it starts to recover? And how about the politics.\"<\/p>\n
He said property investors would only start to reenter an
\nailing market when they found indications it was ready for
\nrecovery.<\/p>\n
Some analysts predicted earlier that the low price of the
\ncountry's properties in the crisis would be a strong draw for
\nforeign investors.<\/p>\n
Smith said many property investors considered Southeast Asia
\nas one entity, meaning they would only enter Indonesia once the
\nwhole region was on the road to recovery.<\/p>\n
\"As a professional consultant, I myself advise them to just
\nmonitor the situation. The reason is that there are still no
\nclear signs today of when the prices (of properties) or rents
\nwill be going up.\"<\/p>\n
The manager of the company's consultancy and valuation
\ndivision, Diana Herutami, noted that property owners in the
\noffice, retail and apartment market were forced to cut rents in
\ndollar terms because of falling occupancy rates.<\/p>\n
\"Some 70 percent of CBD grade A building owners would like to
\nnegotiate for the exchange rate or directly quote the rate in
\nrupiah.\"<\/p>\n
Over the third quarter, the rental rate for grade A office
\nbuildings in the CBD area averaged US$8.6 per square meter per
\nmonth, plus service charge of $4 per sqm per month.<\/p>\n
The occupancy rate for the office space continued its downward
\ntrend over the third quarter. The greatest fall was noted for
\ngrade A, with the occupancy rate sliding 5 percentage points to
\n78 percent.<\/p>\n
Total vacancies of all grades stood at 834,000 sqm, rising
\nfrom 300,000 sqm in the first quarter.<\/p>\n
Diana said her company recorded no new supplies of office and
\nretail space over the third quarter, and expected none in the
\nfourth quarter.<\/p>\n
Occupancy in the retail sector over the quarter, however,
\nstayed stagnant at 87 percent.<\/p>\n
In the apartment market, Diana said her company noted the new
\nsupply from the Apartemen Plaza Senayan in South Jakarta.<\/p>\n
Occupancy rates in leased apartments in the CBD area fell 3
\npercentage points to 81 percent, but occupancy of serviced
\napartments rose by 3 percentage points to 67 percent. Occupancy
\nof strata title apartments increased by 6 percentage points to 86
\npercent.<\/p>\n
Average rental rates for leased apartments in the CBD area
\ndropped 17 percent to $15 per sqm per month, but for serviced
\napartments remained steady at $20.<\/p>\n
The hotel market recorded marginal growth in occupancy rates
\nin the third quarter to 33 percent for five-star hotels, 40
\npercent for four-star and 46 percent for three-star.<\/p>\n
\"We think this is because there is an increase in tourist
\narrivals. People are no longer afraid of coming to our country,\"
\nDiana said. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/foreign-investors-still-wary-of-property-sector-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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