Jakarta's property market shows no growth: PwC<\/p>\n
Viva Goldner, The Jakarta Post, Jakarta<\/p>\n
Jakarta's depressed property market showed no immediate signs
\nof improvement, with regional and global economic factors
\ncontributing to minimal growth last year, according to consulting
\nfirm PricewaterhouseCoopers (PwC) Property Group.<\/p>\n
PwC technical advisors Katherine Harberd and Jay Smith painted
\na gloomy picture of the local market during a presentation of
\nJakarta Property Trends for the fourth quarter 2001 on Wednesday.<\/p>\n
Harberd said negative business confidence following the US
\nterror attacks of Sept. 11 was reflected in the condition of
\nIndonesia's property market.<\/p>\n
\"The government has indicated that during 2001 there were
\nsubstantial decreases in the number of approved foreign direct
\ninvestment (FDI) projects -- FDI was actually down 41 per cent
\nfrom the previous year,\" she said.<\/p>\n
\"These statistics on approvals demonstrate a more cautious
\napproach to investment in Indonesia, and clearly this has an
\nimpact on all business sectors -- and ultimately property, in
\noffices, apartments, hotels, industrial and retail properties,\"
\nHarberd said.<\/p>\n
Minimal growth was most evident in sectors reliant on
\nexpatriate demand, such as apartments and hotels, while the
\noffice sector suffered from reduced multinational corporate
\ninvestment.<\/p>\n
Jakarta office occupancy increased just 0.5 percent to 78.5
\npercent from the third quarter, with net take-up for 2001 falling
\n54 per cent from the previous year.<\/p>\n
New tenants were in shipping, trading, telecommunications,
\ninsurance, media, and expanding tenants in consulting, banking
\nand energy.<\/p>\n
\"Certainly by the end of last year, it was very clear that
\noffice take-up was considerably down on the previous year. There
\naren't any signs at present of increasing take-up or recovery in
\nthe office sector,\" Harberd said.<\/p>\n
However, sectors reliant on the domestic market, such as
\nretailing and shophouses, reported higher growth.<\/p>\n
Occupancy in the Jakarta retail sector rose from 93.8 percent
\nto 94.6 percent in the fourth quarter, while in Jakarta's
\nsurrounding areas, occupancy rose from 90 percent to 92 percent.<\/p>\n
Shopping center stock increased by 41,000 square metres
\nthrough the operations of Glodok Plaza, Pasar Glodok, Citra Grand
\nMal and Plaza Cibubur.<\/p>\n
In particular, Harberd said investors were increasingly
\nattracted to the low risk and potential high returns offered by
\nshophouse developments.<\/p>\n
The shophouse sector experienced strong growth towards the end
\nof 2001, after plummeting from 1998-2000 due to the economic
\ncrisis.<\/p>\n
At least 1,800 units (about 540,000 square metres) were
\ncompleted or marketed in 2001, with good demand in the Kelapa
\nGading, Pondok Indah and Dharmawangsa areas, despite high prices.<\/p>\n
However, Smith said domestic conditions, such as the
\ngovernment's recent decision to increase fuel and electricity
\nrates, would also impact on the local property market.<\/p>\n
\"Certainly, fuel and electricity rate increases do have an
\nimpact on property investment, as well as property operating
\ncosts and, ultimately, property values,\" he said.<\/p>\n
Overall, PwC forecast limited growth for Jakarta's property
\nmarket in 2002.<\/p>\n
\"The property sector depends so much on the local, regional
\nand global economy, and all of the local social and economic
\nissues that the country has to deal with,\" Smith said.<\/p>\n
\"Our forecast for this year is hopefully for stability -- not
\na lot of growth, but hopefully no loss of momentum from last
\nyear.\"<\/p>",
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"sponsor": "Okusi Associates",
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