New landmarks in growing Jakarta<\/p>\n
Burhanuddin Abe, Contributor, Jakarta<\/p>\n
If you drive around Jakarta's Golden Triangle area, which
\ncovers Jl. Thamrin, Jl. Sudirman, Jl. Gatot Subroto and Kuningan,
\nyou will surely catch sight of a number of property projects
\nstill underway: high-rise buildings that will later become
\napartments, shopping centers and office compounds.<\/p>\n
The Peak, for example, will certainly attract attention as it
\nwill be Indonesia's tallest building. Having four towers, made up
\nof two buildings with 35 floors each and two others with 55
\nfloors each, The Peak is scheduled to be completed in July 2006.<\/p>\n
Outside this Golden Triangle area, in all other areas in the
\nexpanding Jakarta, such as in Kelapa Gading, Kemayoran, Pondok
\nIndah and Permata Hijau, construction is under way of shopping
\ncenters, town houses, apartments, office compounds and also
\nintegrated real estates.<\/p>\n
Once these projects are completed, Jakarta will have a very
\ndifferent outlook. The city will be full of tall buildings. You
\ncan imagine yourself what Jakarta will look like with so many
\nnew landmarks.<\/p>\n
Indeed, the construction of property projects in Indonesia,
\nwhich has gone through its critical period, is now enjoying its
\nrevival. Several property players like Ciputra, Trihatma Haliman,
\nAlexander Tedja, Sucipto Nagaria and Djan Faridz have predicted
\nthat the property business will remain bright for the next three
\nto five years, slow down for a period and then rise again.<\/p>\n
A study conducted by Jones Lang Lassale Indonesia has shown
\nthat in the past two years, the property business has been stable
\nwith a slight market increase in several sectors and a small drop
\nin some market segments.<\/p>\n
Although the construction of apartments and office compounds
\ndoes not involve areas as vast as that of shopping or trade
\ncenters, this business shows its growing dynamism.<\/p>\n
Unfortunately, these new supplies are not coupled with a
\nsimilarly big demand so, as a result, there is a fall in the rate
\nof occupancy in the apartment and office compound sectors.<\/p>\n
Research head of Jones Lang Lassale Indonesia, Anton Sitorus,
\nsaid that supplies in the office sector in Jakarta had continued
\nto increase. Location-wise, up to mid 2005, close to 61 percent
\nof these supplies were found in the Central Business District
\n(CDB) area of Sudirman-Thamrin, while the remaining 23 percent
\nand 16 percent were found respectively in the Rasuna Said area
\n(including Mega Kuningan) and Gatot Subroto.<\/p>\n
\"At present, there are at least 10 construction projects that
\nwill be completed in the next three years, including Sudirman
\nPlaza, One Pacific Place, an office tower in Senayan City, Pearl
\nGarden, Grand Indonesia Complex, Menara Kuningan, Sudirman Plaza
\n(one tower) and Menara Marya. These projects together will supply
\na total of 350,000 square meters of space,\" he said.<\/p>\n
From the demand side, Anton said, there has been a positive
\nimpact on the demand for office space thanks to the favorable
\nsentiment that the business community shows toward the socio-
\neconomic development program that the government is implementing.<\/p>\n
This year, several deals have been concluded, including
\ninvolving the movement of CSFB to Sentra Mulia (1,800 sq.
\nmeters), Schroeders Investment to the Bursa Effek Jakarta (JSX)
\nBuilding (700 sq. meters), the Directorate General of Higher
\nLearning of the National Education Ministry to Wisma Aldiron
\n(2,700 sq. meters) and Pyramid International Media to Setiabudi 2
\nBuilding (400 sq. meters).<\/p>\n
Indeed, a commercial property survey conducted by Bank
\nIndonesia over areas in Jakarta, Bogor, Depok, Tangerang and
\nBekasi (Jabodetabek) shows that the selling prices of office and
\napartment space went down in February 2005 compared with the same
\nperiod the year before.<\/p>\n
The selling price of office space dropped by 0.71 percent
\nwhile that of apartment space by 6.3 percent.<\/p>\n
This survey, involving 242 property companies, also shows that
\nthe average selling price of office space in February 2005 was
\nrecorded at Rp 10.85 million per square meter while that of
\napartment space stood at Rp 6.80 million per square meters.<\/p>\n
The rent, on the contrary, has increased. For office space,
\nthe rent was recorded at Rp 119,011 per square meter, or a jump
\nof 7.35 percent over the same period in the previous year, while
\nfor apartment space, the rent stood at Rp 118,476 per square
\nmeter, or a rise by 29.16 percent over the same period in the
\nprevious year.<\/p>\n
The conclusion that Bank Indonesia has made is that the
\npublic's limited cash liquidity and economic considerations have
\nbeen instrumental in the drop in the selling prices of office and
\napartment space and the rise in the rent of these two types of
\nproperty. The developers have set their selling prices lower than
\nthe rent.<\/p>\n
Executive director of the Indonesian Center for the Studies of
\nProperty (PSPI), Panangian Simanungkalit has a different opinion,
\nthough. He said that the survey by Bank Indonesia had been
\nconducted for commercial property constructed prior to 2000.<\/p>\n
Meanwhile, the construction of commercial property after 2000
\nhad shown a rapid growth. \"The selling prices of these two types
\nof commercial property may as well drop if the office compounds
\nor the apartments were constructed prior to 2000. In view of its
\nown physical condition, old property cannot compete with new
\nproperty,\" he said.<\/p>\n
Given the increase in the prices of fuel, Panangian added, the
\nselling prices of property would not drop because construction
\nmaterials, like iron, for example, had risen in price. As for
\nhouses, the prices would rise by between 15 percent and 20
\npercent over the level recorded prior to the fuel price increase.
\nMeanwhile, the prices of apartment and office space would undergo
\na price increase of between 5 to 10 percent.<\/p>\n
The data compiled by the PSPI shows that office compounds
\nbuilt since January 2005 add up to a total of 50,000 square
\nmeters in space while in the same period as many as 4,000
\napartment units have been put up.<\/p>\n
Obviously, the revival of Indonesia's economy has prompted the
\nspringing up of exclusive office buildings. When all these
\nprojects are completed, there will be an additional 86,000 square
\nmeters of office space. Totally, by the end of 2006, Jakarta will
\nhave had a supply of 321,600 square meters of new office space.<\/p>\n
Geoff Baldwin, CEO of Australia's Roy Weston, a property
\nbrokering company, said when inaugurating Roy Weston's branch
\noffice in Mangga Dua Raya, Jakarta in late July that property
\ntransactions in Jakarta were very brisk.<\/p>\n
The country's economic revival has prompted major retailers,
\nlike Debenhams, for example, to open its branch office in
\nIndonesia. Meanwhile, several other foreign companies have also
\nbegun to open their Jakarta offices. Office leasing transactions
\nhave come mostly from small-to-medium-scale lessees seeking space
\nmeasuring between 50 and 500 square meters. Generally, these
\ntransactions come from the expansion or relocation of existing
\nlessees but some new faces, ranging from IT firms and oil
\ncompanies, have also made these transactions.<\/p>\n
Large and multi-national companies have become the main engine
\npromoting the rise in the demand for office space in Jakarta's
\nmain business centers. Meanwhile, medium-class companies,
\nincluding workshops, prefer office compounds located not in
\ndowntown Jakarta, for example in Tebet, Kebayoran and Kelapa
\nGading.<\/p>",
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