Property demand stable during second quarter<\/p>\n
JAKARTA (JP): The demand for all types of property was stable
\neven though average office rents rose 1.3 percent in the second
\nquarter of this year, property consultants from PT Procon
\nIndah\/Jones Land Wootton said yesterday.<\/p>\n
\"Net take-up in the Jakarta CBD (Central Business District)
\noffice market was over 50,000 square meters during the review
\nperiod, bringing the total take-up in the first half of this year
\nto approximately 143,500 square meters,\" said Craig Williams, a
\nsenior technical advisor to Procon Indah.<\/p>\n
Williams, who is also a director of the Jones Lang Wootton
\ninternational real estate company, was speaking at a press
\nconference to release his company's quarterly property market
\nreport.<\/p>\n
He said that the 50,000 square meter take-up recorded in the
\nsecond quarter equaled almost 60 percent of the total take-up in
\n1995.<\/p>\n
Williams said that financial institutions, telecommunications,
\nconstruction and manufacturing companies were the major sources
\nof new demand over the last 12 months. These types of companies
\nare expected to continue dominating the leasing market.<\/p>\n
He said that average market occupancy of prime Central Jakarta
\noffices remained at 90.8 percent. There were 338,500 square
\nmeters available at the end of June 1996.<\/p>\n
Based on a selection of buildings, average office rents
\nincreased over the quarter by 1.3 percent from US$12.80 to $13 a
\nsquare meter per month.<\/p>\n
\"Despite another anticipated high annual take-up rate for
\n1996, we expect average market physical occupancy to decline
\nlater this year due to the higher level of additional supply
\nduring this year,\" he said.<\/p>\n
High demand continued in the Jakarta retail market. After the
\nopening of Mega Mal Pluit in North Jakarta, 206,336 square meters
\nof retail space came onto the market in the last 12 months.
\nDuring the second quarter alone, new supply was 118,900 square
\nmeters.<\/p>\n
The net take-up of retail space in the first half of this year
\nwas 82,100 square meters, or 60 percent of last year's take-up.<\/p>\n
He said that there were 9,700 apartments, condominiums and
\ntownhouses by the end of the quarter; a 5 percent increase over
\nthe previous quarter and a 71 percent increase over the same
\nperiod 12 months ago.<\/p>\n
Residential occupancy fell from 75.9 percent to 72.7 percent
\nover the last quarter. Compared to the same period 12 months ago,
\nit fell by almost 7 percent.<\/p>\n
The total supply of industrial land for sale in Greater
\nJakarta was 3,340 hectares last month, which is approximately 18
\npercent of the total permitted industrial land in the area.<\/p>\n
Bekasi has the largest supply of serviceable industrial land
\nin Greater Jakarta, contributing 36 percent, or 1,210 hectares,
\nof the total supply.<\/p>\n
Commenting on the new government regulation allowing
\nforeigners to buy houses in Indonesia, Williams said that it
\nwould not significantly encourage foreign buyers.<\/p>\n
\"We'll see that there will be no significant impact from the
\nregulation, at least in the short term,\" he told The Jakarta Post
\nafter the press conference.<\/p>\n
He said the regulation had two weaknesses.<\/p>\n
All houses and apartments are traded by what is locally known
\nas Hak Guna Bangunan (the right to build) and Hak Milik (the
\nright of ownership).<\/p>\n
\"But the government requires foreigners to buy property under
\nthe legal scheme of Hak Pakai (the right to use). That means they
\nhave to convert it first from Hak Guna Bangunan and Hak Milik to
\nHak Pakai,\" he said.<\/p>\n
The second weakness, he said, was that locals would have to
\nchange properties' titles back into the right to build or the
\nright of ownership when they bought properties off foreigners.<\/p>\n
\"Besides, most foreigners here are only to stay for a short
\ntime. If they buy houses they will find it hard to monitor their
\nproperty,\" he said.<\/p>\n
He cited an example of falling property prices: \"During that
\ntime they have to monitor the market or just sell it immediately
\nto cut losses. But if they are already abroad how can they do
\nthat.\"<\/p>\n
He said that this seems to be an initial step by the
\ngovernment to test the market's reaction. \"I think they are being
\nwise. If they find it necessary to change, they will change it to
\ncreate a conducive condition,\" he said.<\/p>\n
Asked about investment in property, he said that the
\ngovernment's recent tight monetary policy had squeezed the credit
\nneeded for property projects.<\/p>\n
He said that to overcome this, many local developers were
\nsourcing funds from overseas or seeking joint ventures with
\nforeign companies.<\/p>\n
He said that the Southeast Asian Property Company (SEAPC),
\nwhich is managed by Global Realty Advisors (GRA) of Singapore,
\nrecently bought a 50 percent stake in Apartment Arkadia (Mampang
\nArcadia Apartments) and Perkantoran Arkadia in South Jakarta.<\/p>\n
He said that the Singaporean company had injected $70 million
\ninto the two property projects. (13)<\/p>",
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"sponsor": "Okusi Associates",
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