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)