Thu, 05 May 2011

TEMPO Interactive, Jakarta:Foreign companies operating in Indonesia are relocating to the suburbs, say industry experts. According to Tommy H. Bastamy, senior vice president of research and consultancy firm Coldwell Banker Indonesia, companies are starting to build retail and offices space on the outskirts of Jakarta, in areas such as Alam Sutera, Paramount and Bumi Serpong Damai (BSD) in Tangerang.

One of the foreign companies that has committed to expanding in BSD is Unilever with its Unilever Tower. There will also be an Alam Sutera Office Tower, a Sinar Mas Tower and a Paramount Plaza.

Indonesia Real Estate head Setyo Maharso, said the office relocation trend was an effective business move. If an office does not deal directly with customers, there is not need for it to be located in the city center, he said.

Setyo said the office market in the suburbs was still very high. Many businesses will relocate their offices to the suburbs due to lower construction costs. “Foreign and local bank back offices will continue to move to the suburbs,” he said, adding that other sectors would follow suit.

Tommy said the number of free offices in the city declined from 2001 to 2005, while traffic congestion and high costs in Jakarta might deter further construction.

However, office areas increased to 30,000 square meters between 2006 and 2010. “We predict it will increase to 130,000 square meters by 2012,” he said, adding building in the suburbs would also increase.