Experts see rising trend in apartments
Experts see rising trend in apartments
If a home is in a quiet neighborhood, surrounded by lush
gardens, with a 24-hour security system, parking place and is
close to the place of work, it is likely to be taken immediately.
A lake covered in large lotus buds of myriad hues nearby has
never done anybody any harm either.
Large teakwood trees providing protection from the heat of the
sun and rain are welcome, too, and it is precisely for this
reason that Jakarta is known as the last paradise on earth
which people from around the world feel they must experience
before it is turned completely to steel and stone.
Thousands of expatriates and Indonesians are already living in
Jakarta and if they are here either as singles or parents, there
is no accommodation more secure and comfortable than an
apartment.
Of course, a 25 meter lap pool helps as do courts for various
sports, a children's playground and a day care on the premises
with lots of shade and space for children to play in safety.
But for some developers, all these facilities are not enough
so they have provided residential complexes built by them with a
mini market, dry cleaners, restaurant and maid services, too.
If you happen to find an apartment at South Jakarta's Bona
Vista Apartments, a panoramic view of the mountains from three
sides of one of the tallest towers in the area comes free of
charge along with all the leisure programs offered at the
International Community and Activities Center (ICAC), located
next door.
"Many of the above facilities are no longer considered a
bonus. They are taken for granted and provided at most apartment
buildings that cater mostly to the expatriate community," says
Vera Esther, the sales manager at Bumimas Hilltop Apartments.
The prime districts remain the residential areas of Menteng
and the southern parts, such as Kebayoran Baru, Simprug, Permata
Hijau, Kemang and Pondok Indah.
Many an adventurous expatriate has taken up residence in a
crowded kampong area beside local homes in a bid to get a more
authentic feel of life in Jakarta, but newcomers and the reserved
mostly prefer to live within the luxury and privacy of serviced
apartments, which offer a lifestyle that is halfway between life
back home in the economically advanced world, and here in the
still developing world of the exotic tropics.
After a lull of about two years, the need for apartments in
the city is picking up.
Leasing activity continues to be dominated by expatriates as
some industries have been increasing the number of people
employed by them, such as at foreign banks, insurance agencies,
business service companies, information technology firms and some
manufacturing companies.
Before the economic crisis spoiled it all, apartment
construction had continued recklessly without much thought to
demand.
There were far too many apartments in the city before the
economic crisis put an end to all the construction activity.
"What we are trying to do now is to market the apartments we
had built two years ago," says Deden Sudarbo, head of Procon
Indah/Jones Lang LaSalle, the world's leading real estate service
and investment management firm operating across 100 key markets
in 35 countries on five continents.
From the 60 percent of the expatriate community that packed up
its bags and left Jakarta two years ago, half of that number is
now returning.
"Since the expatriates are back, our job now is to provide
them with accommodation where they feel safe and happy," said
Dina Patiasina, the residential director at Colliers Jardine.
While it is younger Indonesians between the age group of 25
years and 45 years who are looking for apartments to buy,
expatriates rent a residence either for a short or longer period
of time.
Most luxury apartments are built for the benefit of the city's
two percent indigenous population that belongs to the upper
income group and its large community of foreign experts on
assignment here at an office or on the large premises of the
numerous international schools here.
Expatriates are employed mostly by multinational companies
that are prepared to pay a handsome rent for a serviced
apartment.
"We are close to embassies and offices and have employed over
120 security guards that are on duty 24 hours a day. The
apartments are equipped with closed circuit television cameras
and residents can monitor guests on the television," says Veri Y.
Setiady, the general manager of marketing at Executive Menteng
Apartment.
The Central Business District (CBD) and prime residential
areas remain the most preferred locations, while secondary areas
with good accessibility to the toll road are also being
considered, particularly by expatriates working at an industrial
estate.
Since May 1998, many projects lost tenants. Given the
continuing uncertainty, those who have returned seem to prefer to
sign a shorter lease term of perhaps six months compared to the
previous market practice of leasing for no less than two to three
years.
On the other hand, several projects retained a high occupancy
level even during the economic downturn, especially those that
offered a more flexible lease term and relatively more
competitive rental rates.
Some rental apartment projects with superior features and good
accessibility have maintained their captive market and enjoyed
high occupancy levels throughout the economic and political
uncertainties, and also because many tenants swapped individual
homes for an apartment.
In less turbulent times, most families with pets and children
chose to live in the privacy of a sprawling home located in the
southern part of the city with a garden and staff that usually
outnumbered members of the family.
To accommodate the demands of some of these families Veri told
The Jakarta Post that at Executive Menteng Apartment they are
prepared to work out a compromise about allowing pets into the
complex.
Most apartment buildings in Jakarta do not allow pets as a
rule, mainly out of consideration for other guests.
Cheah, the general manager at Allson Residence, feels that
living in an apartment building means being able to share the
common area property without offending other residents.
He feels pets may present a problem as some residents could
object to the noise or lack of hygiene brought about by pets.
Cheah is quick to remind that the Allson Residence is an
executive service apartment known for maintaining a certain
standard.
It prides itself upon being "fully" serviced in the sense that
there are no hidden charges asked of residents as electricity,
water, maintenance are included in the rent.
Cheah feels strongly about providing more housing for the
lower-income group and would like to see more low-cost apartments
built in the city.
But he also says that residents have to first educate
themselves about living in an apartment as the facilities
provided have to be shared among people from different countries
and backgrounds.
Procon Indah/Jones Lang LaSalle predicts in a survey that
office rentals will remain flat in Jakarta, but retail rental
growth will continue to accelerate.
Condominium prices are likely to increase while the price of
industrial land will remain under pressure.
As corporate loans remain unavailable, the future supply will
primarily come from self-financed office projects, renovated
retail projects covered by insurance and pre-sold condominium
projects.
Several postponed retail projects are likely to resume
construction in the short term given the strong demand level and
increasing rentals.
While the average rental of an apartment has been flat, the
rental of a quality prime apartment is likely to increase
slightly due to the relatively stronger demand in this submarket.
The price of a CBD condominium has already increased slightly
while the prices of condominiums in prime residential locations
remain relatively stagnant.
Therefore, when it comes to deciding where to live, only the
sky seems to be the limit here in Jakarta. (Mehru Jaffer)