Greater Jakarta property sees increase in foreign investment
Greater Jakarta property sees increase in foreign investment
Anissa S. Febrina, The Jakarta Post/Jakarta
With a number of Asian property developers constructing new
office buildings in the capital, foreign investment in the
Greater Jakarta property sector more than doubled in the first
semester of 2005, a property research company reported.
According to Coldwell Banker Commercial (CBC) Indonesia, the
value of foreign investment realized from January through July
this year increased to US$5.92 billion from $2.49 billion in the
corresponding period last year.
"The largest investors are from Japan and China, as well as
other Asian countries," said CBC Indonesia senior technical
adviser on research and consultancy Benjamin M. Lamberte.
One of the largest projects, according to the company, was the
strata-titled office building Menara Sahid in South Jakarta. Half
of the investment in the project -- or about Rp 250 billion
($24.75 million) -- came from China's Ruier International Group.
"Foreign investors have developed confidence in our market,"
Lamberte said, adding that the growth in office space would
trigger a growth in luxury apartments as well.
This same trend, he added, has already occurred in Singapore,
Hong Kong and the Philippines.
However, currently there is no additional supply of leasable
office space in Greater Jakarta because several construction
projects failed to meet their deadlines. The total leased office
space in the capital was recorded at 2.37 million square meters
(sqm) as of September.
Meanwhile, the supply of strata-titled office space remained
stagnant at 302,676 sqm.
"As long as the economic situation remains promising for
investors, there will still be demand for office space next
year," said Lamberte.
In the residential subsector, CBC reported that from July
through August most of the 6,070 new units supplied by developers
were located in Bekasi.
More than 50 percent of the units are in the lower market
segment, 37.74 percent are middle-class housing and 6.28 percent
are in the upper segment.
However, the take-up level was spread quite equally, with
1,119 units of upper segment housing sold during the period,
1,738 units of middle class and 1,679 of lower segment.
"With the trend of slower expansion next year, it would be a
good time for developers to review the market and build new
marketing strategies," Lamberte said.
The demand for residential units, especially for real estate
and town houses, will remain high despite increasing prices and
higher interest rates, he said.
In the apartment market, with a cumulative stock of 10,645
units -- in both primary and secondary areas -- as of September
2005, the demand for upmarket units will continue to grow with
the coming of foreign investment.
CBC reported that there would be 1,585 new units coming to
completion during the next couple of years, as the cost of
construction and lending interest rates rose.