Jakarta property sector shows modest performance<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Jakarta's office and industrial property market performed
\nmodestly with no new supply in office space, and particularly low
\ndemand in the office sector in the first half of 2003, signaling
\na weakening trend as the country gears up for the elections in
\n2004.<\/p>\n
Property consultant Procon in its Jakarta quarterly property
\nmarket review said no new supply in available space was recorded
\nin the office and industrial estate market.<\/p>\n
Overall Jakarta office space remained at 4.97 million square
\nmeters (sqm) as there were no new office projects completed at
\nthe second quarter of 2002.<\/p>\n
Demand and leasing activities in the office market remained
\nlow despite improving macroeconomic indicators.<\/p>\n
Demand in the central business district (CBD) market was only
\nrecorded at 7,500 sqm. Total leasing transactions were down by 10
\npercent with total recorded transactions of 24,000 sqm in the
\nsecond quarter of 2003.<\/p>\n
Weak business confidence, corporate consolidation and
\nincreasing expenses were factors noted as contributing to the low
\ndemand for office space.<\/p>\n
\"Landlords are led to concentrate on maintaining existing
\ntenants in their buildings by offering competitive rental rates
\nand other forms of concessions,\" the report said.<\/p>\n
Demand outside the CBD area was better at 29,100 sqm. Offices
\noutside the CBD area had a higher occupancy rate of 83.9 percent
\ncompared to the 79 percent rate in the CBD area.<\/p>\n
Amid the weak market and declining demand, rental rates in the
\nCBD were relatively stable. The strengthening rupiah contributed
\nto a slight decline in rental rates by 0.8 percent from Rp
\n105,370 per sqm per month to Rp 104,500.<\/p>\n
The general election in 2004 is expected to cause a downward
\ntrend in the office market as a weak business sentiment lingers.<\/p>\n
On industrial estates, industrial land supply was flat at
\n6,953 hectares (ha) as of June 2003.<\/p>\n
However, it recorded a better sales transaction with take-up
\nrecorded at 20.1 ha compared to 12.7 ha in last the quarter. On
\naverage, land area sold ranged between 0.4 ha to 6 ha. Land that
\nare leased ranged from 0.02 ha to 4 ha.<\/p>\n
Local investors dominated the buyers for industrial land area.
\nLeased industrial land was also dominated by local investors (82
\npercent), with the remainder leased by Asian investors.<\/p>\n
About 96 percent of the demand came from food processing
\nfactories, automotive, electronics and depot containers.<\/p>\n
The price of industrial land declined by 4.41 percent to
\n304,412 per sqm as the local currency strengthened against the
\ngreen back.<\/p>\n
The report said that industrial land demand would remain
\nmodest in the future.<\/p>\n
\"Supporting industries and small to medium sized enterprises
\nfrom local investors will continue to be demand generators
\nfor small land plots and standard factory buildings,\" Procon
\nsaid.<\/p>\n
\"Demand for large plots of industrial land will continue to be
\nlimited,\" it added.<\/p>\n
The report, however, noted that the condominium market
\nrecorded active sales and increasing supply.<\/p>\n
As of June 2003, total cumulative supply reached 26,884 units.
\nAn additional supply of 149 apartment units came from Pantai
\nMutiara apartment tower, Ibis Mangga Dua and Permata Senayan.<\/p>\n
Procon said 320 units were sold during the second quarter of
\n2003. In the previous quarter, some 184 units were sold.<\/p>\n
The report said the condominium market would become the most
\nactive sector in the future.<\/p>",
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"sponsor": "Okusi Associates",
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