Office rents fall 30 percent

Office rents fall 30 percent

JAKARTA (JP): Sharp competition in the office market has led to a 30 percent drop in rental fees since 1991, research analysts said.

Rudy Halim and Yuhal of the property consultancy PT Procon Indah/Jones Lang Wootton said average monthly rents are currently US$13 per square meter, Antara reported.

Rents in "Grade A" sites such as Jl. Sudirman are around $14.20 per square meter per month. In "Grade C" sites, where office areas are less strategic, monthly rents are $10.80 per square meter.

Prime location rents last year increased five percent, while secondary sites saw few significant changes, Yuhal said, adding that rents in central business districts remained $2 higher than those outside the districts.

Research conducted by the consultancy in April showed that the amount of office space in the city has jumped to 2.23 million square meters, a 6 percent increase since late last year.

Rudy said the increase was due to the completion of 127,480 square meters of new space in the central business district.

The new supply is from Plaza Bapindo II on Jl. Sudirman, Plaza Great River on Jl. H.R. Rasuna Said, Adhi Graha on Jl.Jend. Gatot Subroto, and Menara Imperium on Jl. H.R. Rasuna Said.

The research showed that Jl. Jend. Gatot Subroto had the largest addition of office space, where supply increased 45 percent compared to last March. On Jl. M.H. Thamrin, office supply has remained the same during the last 12 months.

Rented space of 5,000 to 8,000 square meters in the central business district is reported to be in demand by foreign countries.

Several foreign multinationals are pooling their companies into single locations" for efficiency reasons, the study reported.

Rudy explained that companies are beginning to be more selective with their locations and will choose less expensive sites if they feel secondary areas are good enough for their operations. (anr)