Despite an overall decline in Jakarta’s property market since the global financial crisis hit, property analysts are confident the real estate sector will continue to grow.
According to 2009 first quarter analyst reports, the real estate market in the city should continue to attract buyers and developers will carry on building malls and apartments.
“There are new plazas in Slipi and Kebon Jeruk [both in West Jakarta], and they’re both getting tenants. This shows there is always a demand for space in the city,” said Handa Sulaiman, executive partner at PT Property Indonesia, recently.
Reports state the city’s office, retail and residential markets have been affected by the global financial crisis one way or another.
Between January and March this year, office space vacancy in the central business district - such as Jl. Sudirman - decreased to 19.5 percent, leaving around 732,000 square meters of vacant office space, according to a report from real estate firm Jones Lang LaSalle.
Procon, another real estate firm, recorded a slight drop in the leasing of office space, from 27,900 square meters in the previous quarter to 26,800 square meters in the first quarter of 2009.
The reports differed slightly on overall sale rates for Jakarta’s condominiums, with Jones Lang LaSalle recording a small increase from 54 percent in the previous quarter to 56 percent this quarter, while Procon reported a 2 percent decrease from 57 percent last quarter to 55 percent this quarter.
For retail space, Procon recorded a 3.3 percent decrease in occupancy rate from 88.1 percent in last year’s fourth quarter to 84.8 percent in this year’s first quarter.
The decline in occupancy rate was not surprising though, according to Procon Director of Research and Consultancy Utami Prastiana, as occupancy rate in malls have continued to decline within the past five quarters due to the crisis crippling purchasing power.
“Food and beverages are, by far, the only sectors upholding the tenancy rate of malls and shopping centers,” she said.
Despite the slowdown, analysts said Jakarta’s property market had weathered the crisis fairly well and numbers should rebound.
“Sales should go up again in the next quarter because there are only 800 residential launchs in the next four months,” Utami said. “Banks have also been keeping housing interest rates steady between 12 and 14 percent, some are even reducing their rates since the central bank rate cut.”
Indra W. Antono, Director of Marketing at Agung Podomoro Group one of the biggest developers in the city, shared the same optimism.
“It’s been stable so far. Sales of our Rp 200 million (US$18,600) apartments went up by 7 percent in the first quarter,” Indra said.
“We expect more sales as the political climate in Indonesia stabilizes,” he added.
Indeed, if the rate of development is any indication of future trends, Jakarta is expected to have 4 million square miles of mall and trade center spaces by the end of 2011.
“Right now we are will concentrate on finishing our projects. This year we plan to finish five expansion projects,” Indra said.
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