Occupancy rate of office building drops to 20-30 percent

Bambang Nurbianto The Jakarta Post Jakarta

Occupancy rates of office buildings in the capital have continued to decrease due to the prolonged economic crisis and are now estimated to reach below 30 percent.

Dharma Sjachrial Pohan, co-chairman of the Indonesian Building Maintenance Association (APBI), said on Monday that the occupancy rate of buildings in Jakarta, including those in the Kuningan- Thamrin-Sudirman central business district, are estimated to reach between 20-30 percent on average.

"You can see now that many buildings in Jakarta are now vacant. The condition has been worsening continuously since the economic crisis first hit Indonesia in 1997," Dharma told The Jakarta Post on Monday during a break from a seminar on building maintenance.

A survey by the building maintenance association in 1977, just before the crisis hit the country, showed that occupancy rates of some 1,300 buildings in Jakarta reached 70 percent, while a similar survey in 1999 showed that the occupancy rates declined to 40 percent.

The low occupancy rate makes the management unable to provide adequate funding for ideal building maintenance, Dharma said.

Sharing Dharma's viewpoint, Oktosa Harahap of the PT Gedung BankExim said that the financial constrain has caused the building managers to reduce their budgets for building maintenance.

"Such conditions seriously affect the condition of the buildings. Therefore, we often see many buildings which are not well-maintained. It can be seen from many parts of the buildings, including their rest rooms," said Oktosa.

In the short-term, the streamlining of the building maintenance could cut financial expenses for the management, but in the long term, it would give negative impact to the condition of buildings, he warned.

In 1997, a survey on maintenance and management of 40 buildings along Jl. Thamrin and Jl. Sudirman in Central and South Jakarta, found that only seven percent met the proper requirements for building maintenance, Jimmy Siswanto Juwana, a lecturer at Trisakti University, said.

He believes the condition is worse now.

Meanwhile, Thoby Mutis, rector of the University, told the seminar that many of buildings, which are now under control of the Indonesian Bank Restructuring Agency (IBRA), have less value because they are not well maintained.

He said that the government needs to give attention to the properties, so that their value will not steadily decline.

"I think there should be institutions tasked to maintain the state assets," he said.