Jakarta to see ample property demand this year

Jakarta to see ample property demand this year

JAKARTA (JP): The city, along with other Asian cities, will
remain one of the Asia-Pacific region's most dynamic property
markets this year, according to the latest edition of Asia
Pacific Property Trends.

"Demand for floor spaces remain particularly strong in
Jakarta, Bangkok, Taipei, Manila and Kuala Lumpur," David
Jackson, an editor of the quarterly publication, said in a
statement over the weekend.

The publication, however, warns that a number of cities,
including Jakarta, is increasingly saturated with office spaces
due to the opening of large business district centers.

The publication, published by McGraw Hill, records that
Jakarta added almost 180,000 square meters of office space in the
second half of last year, and some 685,000 square meters are
under construction.

It also records the largest office building purchases in the
second half of last year as occurring in Tokyo, Seoul, Taipei,
Singapore and Kuala Lumpur.

The largest transaction was Marubeni Corporation's purchase of
its headquarters building in Otemachi, Tokyo, from Mitsubishi
Estates for some $766 million.

When it comes to retail property, Jackson said, world-class
retailers are taking differing strategies to obtain footholds in
the most populous Asia Pacific markets.

Jackson, who is also Colliers Jardine's regional research
director, noted that Jakarta is becoming amply supplied with
retail floor space following a spate of major shopping center
openings last year and a further 500,000 square meters scheduled
to come on stream this year.

Industrial estates

When talking about the prospects of industrial estates, he
said his company foresees increased requirements for industrial
land and factories in much of the region due to strong production
growth as well as an influx of foreign manufacturing companies.

"In Indonesia and the Philippines, industrial estates are
developing rapidly to cope with the demand, while Malaysia is
extending some of its industrial township developments," Jackson
said.

In the hotel market, he noted that the region will enjoy an
increase of foreign visitors. However, effective room rates will
not increase significantly due to the opening of new hotels and
the expansion of existing hotels.

Despite the already ample supply, the number of hotel room are
set to increase this year by 20 percent in Jakarta, 10 percent in
Kuala Lumpur and 8 percent in Bangkok.

The publication forecasts that effective room tariffs will be
static in Thailand over the next 12 months and will tend to slip
in Jakarta and Kuala Lumpur, particularly at the upper end.

On residential property, it says that Jakarta and Tokyo have a
glut of supplies, especially in upper-market inner-city
residential apartments. (rid)