Jakarta office rentals expected to increase

JAKARTA (JP): Jakarta office rentals have begun to increase with A-grade prime rental space averaging US$15 a square meter a month for tenants occupying units of less than 500 square meters.

Property consultant First Pacific Davies says in its latest quarterly market review that rents as high as $19 a square meter have been achieved for new grade A premises.

Supply will reach about 260,000 square meters this year and rents will rise moderately, particularly in the second half of the year, the report says.

Average rents for A-grade offices in Jakarta will increase to between US$14 a square meter and $16 a square meter, the report says.

Rents for larger precommitments will remain between $12 a square meter and $14 a square meter.

Rents for B-grade and decentralized office space will be steady at between $10 a square meter and $13 a square meter.

Service charges will remain between $5 a square meter and $7 a square meter, the report says.

More and more developers are seeking to split the electricity for leased premises and charge separately to more accurately reflect the true cost of operating buildings.

"This has met with favorable response from tenants," the report says.

The Jakarta office market will be steady throughout 1995 and 1996, the company says.

If election activity remains subdued A-grade office space prices will take off in 1997.

Demand for A-grade office space reached record levels last year with 265,000 square meters taken up.

This previous record was in 1995 when 250,000 square meters were taken up.

Economic deregulation will ensure investment keeps rising and fuels demand for office space, the report says.

The company said new office space last year reached 420,000 square meters, up from 350,000 square meters in 1995.

Major projects handed over at the end of last year included Wisma 46, Kota BNI on Jl. Sudirman (88,000 square meters), Wisma Bank Danamon & Wisma Danamon Aetna Life on Jl. Sudirman (90,000 square meters), and Menara Batavia on Jl. Mas Mansyur (45,000 square meters).

At the end of last year, Grade A office space in Jakarta's Central Business District stood at 2.6 million square meters.

Major projects this year include Plaza BII on Jl. Thamrin (58,000 square meters), Bursa Efek II on Jl. Sudirman (64,000 square meter), Sentral Senayan I on Jl. Asia Afrika (32,000 square meters) and Deutsche Bank on Jl. Imam Bonjol (20,000 square meters). (bnt)