Gloomy outlook forecast for office space market<\/p>\n
JAKARTA (JP): Owners of office buildings in Jakarta's central
\nbusiness district are in for more tough times over the next two
\nyears, with a slump in demand and falling rent forecast, property
\nconsultants PT Procon Indah\/Jones Lang Wootton said on Tuesday.<\/p>\n
The amount of occupied space in Jakarta's main commercial
\ndistrict is expected to decline by 110,000 square meters in 1999,
\nand by a further 42,000 square meters in 2000, the company said
\nin its biweekly Indonesian Property Brief.<\/p>\n
Continued rationalization, downsizing and relocation
\nstrategies being pursued by many companies would lead to higher
\nvacancy rates this year, the report said, adding that Indonesia's
\npolitical and social instability would also contribute to the
\ndownward pressure.<\/p>\n
Average vacancy is projected to rise to 28 percent by the end
\nof this year and to 31 percent in 2000. \"Pressures on landlords
\nto reduce rent are likely to persist due to higher vacancy,\" it
\nsaid.<\/p>\n
In 1998, the majority of office buildings in the central
\nbusiness district offered rents ranging from between US$10 and
\n$13, plus monthly service charges in the region of $6 and $7 per
\nsquare meter. However, most rents were fixed at an exchange rate
\nof between Rp 4,000 and Rp 5,000 to the U.S. dollar to prevent
\ntenants from leaving in hordes.<\/p>\n
The rupiah plunged in 1998, at one time reaching Rp 17,000 to
\nthe dollar before ending the year just above Rp 8,000.<\/p>\n
The report, which reviewed conditions in the office market in
\nthe last quarter of 1998, said that around 626,800 square meters
\nof office space in the central business district was vacant by
\nthe end of the year.<\/p>\n
Office space supply in the district increased by 81,500 square
\nmeters to 2.84 million square meters by the end of 1998.<\/p>\n
Many planned office construction projects have been put on
\nhold, the report said, citing Menara Jamsostek, Wisma Mulia and a
\nformer Danamon Data Center building.<\/p>\n
Nevertheless, 48,000 square meters of new office space will be
\nopened this year, with a further 85,000 square meters scheduled
\nfor completion in 2000. (02)<\/p>",
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"sponsor": "Okusi Associates",
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