Jakarta's CBD sees higher occupancy rates

JAKARTA (JP): The occupancy rate of office buildings in Jakarta's Central Business District (CBD) rose to 78 percent at the end of August from 73 percent at the start of the year, international property services company Koll IPAC said on Friday.

The recovery in the office property market in the "Golden Triangle" began in the second semester, with total net take-up between January and August amounting to more than 140,000 square meters, Koll IPAC said in its latest newsletter.

That leaves 655,000 square meters of vacant space in the area as of the end of last month, it said.

The majority of the new demand for office space came from companies active in the e-commerce, telecommunications, consumer banking and insurance sectors, it said.

The CBD, the prime site for office buildings in the capital, is delineated by Jl. Thamrin to Jl. Sudirman to the west, Jl. Gatot Subroto to the South and Jl. Rasuna Said to the east. Property analysts include buildings in Mega Kuningan and Jl. Imam Bonjol as part of the CBD.

Rental offices in the CBD total approximately 2.9 million square meters of gross area.

As of the end of August, 22 buildings in the area with total semigross area of 370,000 square meters were close to full occupancy, the report said.

Buildings in the Mega Kuningan area had the highest average occupancy rate at 90 percent, followed by buildings on the Jl. Imam Bonjol and Jl. Sudirman areas with 81 percent and 79 percent respectively, while those on Jl. Gatot Subroto and Jl. Rasuna Said had an average occupancy rate of 77 percent.

Buildings in the Jl. Thamrin area had the highest average vacancy rate at 26 percent.

Koll IPAC said the rental rates of buildings in the CBD on average remained the same or increased slightly due to the high occupancy rates.

Some buildings were able to maintain high occupancy rates because of their willingness to be flexible in negotiating lease terms, for example allowing monthly payments for one-year contracts and applying fixed exchange rates, the report says.

Office buildings in the Jl. Sudirman area had the highest average quoted base rents at Rp 80,000/sqm/month, and the lowest were offered by buildings in the Jl. Gatot Subroto area, averaging Rp 52,000/sqm/month.

More than 52 percent of office buildings set their rents using the rupiah's actual exchange rate, and 28 percent use a fixed exchange rate. The remaining 20 percent charge in dollars.

Most developers recently increased service charges and overtime charges due to the increase in fuel and electricity rates. The highest service charges were seen in buildings on Jl. Sudirman, averaging Rp 38,000/sqm/month. Office buildings in the Mega Kuningan had an average service charge of Rp 29,000/sqm/month. (02)