Office occupancy rate seen to drop next year
Office occupancy rate seen to drop next year
JAKARTA (JP): Office occupancy rates will fall four percentage
points to 86 percent of total office space available by the end
of next year because of new supply, a property analyst predicted
yesterday.
"With approximately 600,000 square meters of new office space
entering the market next year, occupancy rates are anticipated to
decrease from 90 percent to 86 percent," said Peter A. Collins,
the president of property consultant PT Colliers Jardine
Indonesia.
He said office stock next year would grow to more than three
million square meters, including more than 2.6 million square
meters in premium and class A buildings in prime areas.
Next year's office take-up rate is expected to be about
300,000 square meters, taken mostly by banking, trading and
service companies, he said.
Jakarta's take-up rate for office space is estimated to reach
300,000 square meters this year, the highest level achieved in
the 1990s, he said.
"Despite the high takeup, the vacancy rate is expected to
increase to about 14 percent by the end of 1997. But what we are
experiencing here is a healthy vacancy rate as a result of large
supply of office space responding to a demand driven market,"
Collins said.
The property market is very much demand driven. Healthy
demand, particularly for good quality offices, has encouraged an
office building boom this year, he said.
Projection
New office supply in 1998 is projected to increase by about
720,000 square meters. The development status for 25 percent of
this supply is "probable" (planning and approval processes are in
progress and financial approvals are being actively sought) and
4.4 percent is "possible" (site design concept drawings have been
completed or are in progress, and finance is under discussion),
he said.
The Colliers Jardine Commercial Leasing Department has
observed an increasing trend of service companies relocating
their businesses from prime areas -- around Jl. Thamrin, Jl.
Sudirman, Jl. Gatot Subroto and Kuningan -- to periphery
locations, such as Kebayoran, Pancoran and Jl. T.B. Simatupang.
"This new phenomenon is a result of heavy traffic and
increased traveling time coupled with increasing choices of
office space in the periphery areas," Collins said.
He said the future office tenants in prime Jakarta areas would
tend to be in financial, banking and services sectors.
Colliers Jardine's data shows that net rents for new prime
buildings in prime areas range between US$14 and $18 a square
meter a month, while in the non-prime areas it ranges between $8
and $13 a square meter a month.
Rents are expected to remain the same or increase slightly in
the next 12 months, the company predicted. (bnt)