Apartment market surges after suffering decline
Apartment market surges after suffering decline
JAKARTA (JP): More middle-class people are choosing to live in high-rise residential buildings, kick-starting the apartment market in the capital again after a tough time with the economic downturn.
Apartments are a relatively new concept here. It was not until the late 1980s that the city started to see the development of high-rise apartment buildings.
At that time, expatriates were the main target for developers, but then they realized that more locals were interested in purchasing apartments. There was also a time when locals were buying apartments not for living in, but rather as investments.
The development of apartments has also encouraged more overseas companies to operate here.
In particular, they are running serviced apartments. These companies include the Accor Asia Pacific, Ascott, Aston, Alsson, Four-Seasons Regent and Kempinski.
Most of some 70 condominiums in the capital, though, are developed and operated by local companies.
The general manager of the Kempinski Hotel Plaza Jakarta, Michael Price, said the future of serviced apartments in Indonesia looked promising as busy executives were seeking convenience.
"This is something that serviced apartments do offer," he said.
Kempinski runs both the apartments and hotel, which is located in the same building within the Mid-Plaza complex.
"This provides additional convenience to the tenants who have access to all of the hotel's facilities and services while still having their private entrance through the apartments' lobby," said Price.
He added that the Kempinski had maintained an average of 100 percent occupancy.
"As Indonesia is on its way to recovery, we expect to see more business activities, in the short and long term. Serviced apartments provide the answer to all requirements, and service and facilities are maintained."
Sharing the opinion, Oswald Pichler of the world-class hotel management company Accor Asia-Pacific said that there had been a stronger demand in serviced apartments.
"The properties operated by Accor are serviced apartments, and we have seen a good increase," he said.
Competition
Pichler said that the market would remain competitive as each apartment always tried to offer everything.
Accor operates several apartments under the names of Mercure and Ibis in Jakarta and Surabaya, in addition to over 20 hotels in various cities across Indonesia.
There are many things to consider when living in an apartment. People usually want convenience, privacy, security, a central location, easy access and facilities.
The price or rate as well as the developer and management are also important elements in this consideration.
As most properties are tastefully furnished and decorated, what are the advantages of serviced apartments managed by foreign companies?
Sales manager of PT Dewata Wibawa, the developer of Four- Seasons Regent Residences, Sudiwati Atailah, said that her apartment had the exclusivity to use the Four-Seasons Regent brand for a certain period based on a signed contract.
"The apartments must then meet any standards set by the Four- Seasons. This leads to our specific, premium target market," she said.
Property manager of PT Jakarta Setiabudi Property, the owner of Kuningan Apartments, Bambang Mursalin, said that the property was locally self-managed.
"Serviced apartments managed by foreign firms are direct competitors for us. I believe they also advertise their properties in Indonesia in their marketing network. Experience is likely their competitive advantage as well."
"Remember that some serviced apartments in Jakarta also take in tenants on a daily basis, meaning that they operate like hotels. Thus, foreign chains, which have an international promotion network, will use this measure," he said.
Conditions may be different for Executive Menteng Apartment, which is managed by a Jakarta-based company, PT Jakarta Land Management.
Menteng Apartments' general manager for marketing Veri Y. Setiady said the target market was more domestic and that his company did not need to run overseas marketing offices.
Separate
Companies managing serviced apartments can be separated as those that only maintain the common areas like the swimming pool, elevators, electricity, parking lot, the tower and other facilities, which may have a health club, sauna and whirlpool, swimming pool, tennis court, squash court and a children's playground, and those which extend services to the tenants.
When a company only maintains the common areas, services to tenants will be handled by the developer of the apartments.
Services usually include housekeeping services, cleaning and a fresh supply of bath towels and bed linen, water and electricity, plus cutlery, crockery, glasses, cooking utensils and serving dishes as well as other amenities.
For example, the tenants of Executive Menteng Apartments enjoy a host of the above facilities.
"For this, I think we're quite competitive compared to the international chains. Our employees are also experienced in star-rated hospitality," said Veri.
It is helpful for prospective residents to learn more about the management and service providers when selecting an apartment.
They must also be keen in studying everything related to management and services, particularly the monthly service charges or maintenance fees.
After you move into an apartment, the tenants' association (Perhimpunan Penghuni) in any apartment building will be helpful in formulating the proper monthly service charges or maintenance fees and selecting a building management company.
A tenants' association is required of any apartment developer after a two-year operation period, based on Apartment Law No. 16/1985, Provincial Regulation No. 1/1991 and Government Regulation No. 4/1988. (I. Christianto)