High-rise building owners still strong

JAKARTA (JP): Foreign investors are seeking cheap office buildings in the capital but owners are in no hurry to surrender their properties, property consultantcy First Pacific Davies Indonesia said.

The company said in its weekly report yesterday that some high-rise building owners did not yet view the crisis as fatal.

"Surprisingly to many investors, most developers have not surrendered to the unfortunate conditions following the collapse of the rupiah's value against the U.S dollar," First Pacific Davies said.

It said there were three scenarios through which property owners were surviving the crisis.

First, it said, owners of top grade A office buildings, with rental rates of US$22 per square meter per month, might survive a five-year crisis after four "good years" when they got maximum returns in terms of rental fees and occupancy.

"The crisis is defined as a reduction in rental rates by applying an average fixed rate of Rp 5,000 per one U.S. dollar, and a decrease in occupancy rate to a minimum of 80 percent," it said.

Lower class grade A offices, with an average rental rate of $19 per square meter per month, could survive a five-year crisis after having five "good years".

And the third scenario was for grade B office buildings, with an average rental rate of $13 per square meter per month. First Pacific Davies said the owners of those buildings could survive a four-year crisis only after they had enjoyed eight "good years". (gis)