Occupied office space continues to decline<\/p>\n
JAKARTA (JP): Occupied office space in the capital's central
\nbusiness district continued to decline in the second quarter of
\nthis year, according to property consultants.<\/p>\n
Based on their latest survey, Procon Indah\/Jones Lang Wooton
\nResearch identified a net decrease of 31,700 square meters in the
\nreview period, taking the total net decrease to 115,500 square
\nmeters in the first half of the year.<\/p>\n
\"It's the first negative growth in new demand since 1990,\"
\nsaid Bayu Utomo, the head of the company's research department.<\/p>\n
He said tenants continued to reduce the amount of space they
\nrented and were surrendering office space to relocate to less
\nexpensive buildings.<\/p>\n
Enquiries for office space dropped over the quarter.
\nIndustries remaining active and looking for office space include
\nforeign banks, embassies, telecommunications firms, oil and
\nmining companies and consumer goods manufacturers.<\/p>\n
Overall occupancy decreased 2 percent to 84.4 percent over the
\nquarter or a decline of 6.7 percent since the end of 1997, the
\nsurvey said.<\/p>\n
\"Approximately 442,600 square meters of office space is
\ncurrently vacant in the central business district,\" it added.<\/p>\n
On the supply side, more construction projects have been put
\non hold due to ballooning construction and financing costs and
\nfalling demand. Seven projects totaling 397,000 square meters, or
\n63.8 percent of the previously identified future supply, have
\nstopped their construction activity.<\/p>\n
Survey<\/p>\n
Total office space as of June was 2.8 million square meters.
\nTotal future supply to be completed by 1999 is estimated at
\n197,500 square meters, with no projects expected to be completed
\nin 2000, according to the survey.<\/p>\n
\"The market will see declining occupancy throughout this
\nyear,\" said Utomo. \"With the economic growth of Indonesia
\nprojected at below minus 10 percent in 1998, occupancy is
\npredicted to drop to 71 percent by the end of the year,\" he said,
\nadding that the oversupply had created a tenant market in
\nJakarta. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/occupied-office-space-continues-to-decline-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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