Hotel occupancy rates 'continue to decline'
JAKARTA (JP): In spite of falling rental rates, virtually all property sectors showed declining occupancy rates in the second quarter of 1999. The only exception was the retail sector, according to property services company FPDSavills.
Occupancy rates for apartments and hotels continued to decline while office space occupancy was stable, according to the latest FPDSavills' Jakarta Property Briefing.
A wait and see attitude prevails until Indonesia elects its next president later this year, it said.
The report noted the strengthening of the rupiah, lower interest rates and other positive economic indicators, along with the relatively peaceful conditions in Jakarta as factors affecting the property market.
The retail sector showed a 2 percent growth in occupancy rates to 92 percent, with the greatest contribution coming from grade "C" space -- for the low end of the market.
Rents for the sector increased as owners raised the rupiah's exchange rate used in calculating the rates to Rp 2,900-3,500 per U.S. dollar from a Rp 2,750-3,250 range in the first quarter.
Supply of retail spaces remained stable at 1.1 million square meters. Some 45,000 square meters are forecast to be completed in the third quarter.
Occupancy rates in star rated hotels declined in the second quarter due to fears of unrest prior and during the June general election.
Five star hotels were worst hit, with an average occupancy rate at 26 percent, four star and three star hotels averaged 27 and 37 percent respectively.
Room rates in four and five star hotels decreased by between 6 percent and 9 percent. Their room rates ranged between Rp 260,000 to Rp 610,000.
Three star hotels, which charge in rupiahs, saw their rates increase by 12 percent, largely due to the strengthening of the currency. The average rate for three-star hotels is Rp 180,000.
Some 174 three star hotel rooms were added to the total stock of 20,200 rooms for all categories with the completion of Treva International Hotel. Some 900 more rooms from five and three star hotels are expected to be completed next year.
The report showed a 2 percent decrease in the apartments' average occupancy rates in Jakarta's primary area the central business district (CBD), and in the secondary area to 60 percent.
In U.S. dollars, rent for apartments remained stable, except those in the higher end of the market which declined, reflecting the stronger rupiah.
Supply of apartments in secondary areas increased by 100 units to 16,400 units while supply in the CBD area remained at 9,400 units.
Office occupancy rates remained stable at approximately 73 percent, with total vacancies put at 926,000 square meters.
Average office rents fell slightly from the first quarter.
Most building owners charge in dollars but they peg the exchange rate at between Rp 4,000 and Rp 5,000 to the dollar.
Rents varied between Rp 30,000 to Rp 60,000 per square meter, and service charges ranged between Rp 20,000 to Rp 30,000.
Some 15,000 square meters of new space was added with the completion of Arcadia Office Park Towers B&C, bringing the total supply in the secondary area to 930,000 square meters. Total supply in the CBD area stood at 2,527,000 square meters. (02)