Property demand likely to grow by over 20%
Property demand likely to grow by over 20%
The Jakarta Post, Jakarta
The demand for residential, industrial and retail properties as
well as office buildings in Jakarta and surrounding areas is
likely to grow this year, according to a property brokerage
company.
"Based on last year's overall high annual take-ups (new
transactions), the prospect of demand in the property market this
year will increase by more than 20 percent, in terms of the total
units sold or square meters occupied," PT Procon Indah director
Lini Djafar said recently.
The increase will come from improvements in the annual take-
ups on rental apartments and condominiums in the capital, she
added.
The annual take-ups of Jakarta rental apartments increased by
82.4 percent to 925 units in 2004 from 507 units in 2003.
Last year's take-ups took the total stock of rental apartments
to 15,676 units as of December 2004 and the occupancy rate to
69.4 percent, as 4,798 units were left vacant, Djafar said.
"The prospects of the apartment rental market will depend on
how many expatriates reside in Indonesia, since the main targets
are foreigners," she added.
According to Djafar, competition in the city's rental
apartment market is expected to be tougher this year, especially
with the completion of several condominium projects that will add
a large volume of apartments to the secondary leasing market in
the residential sector.
Total supply of condominiums will increase by 8,033 units this
year from its cumulative supply of 33,837 units as of the end of
2004 since the construction of 7,858 condominiums and 175
townhouses will be completed later this year.
Last year, annual condominium take-ups increased by 435.7
percent to 7,875 units from only 1,470 units in 2003.
Djafar said the demand for office space was expected to
increase in both the short and medium terms as the Indonesian
economy and foreign direct investment this year were likely to
improve.
However, "with the new supply entering Jakarta's office market
in 2005, the occupancy level is predicted to decrease slightly,
pending realization of demand improvements," she said.
She named Plaza Asia on Jl. Sudirman, Menara Bank Mega on Jl.
Tendean and Menara Nusa on Jl. Rasuna Said, all in South Jakarta,
as among those in an advanced construction stage and ready for
occupation in early 2005.
"These projects will add approximately 86,000 square meters of
new office space to the market," she said.
Djafar said the total cumulative supply of office space in the
overall city market stood at 5.08 million sq m as of December
2004.
She also predicted that last year's improvements in the
industrial market in Greater Jakarta would continue this year.
"Local investor demand for small and medium plots of
industrial land will continue to propel the market."
"Meanwhile, demand for larger industrial land, mostly by
foreign investors, will strongly depend on the improvement of the
investment climate developed by the new government."
The annual net take-ups of industrial land in 2004 reached a
new record high in three years of 134 hectares, indicating a 72
percent increase over 2003. The latest record was achieved in
2001, when net take-ups reached 137 hectares. The total
cumulative supply of industrial land stood at 7,086 hectares as
of the end of 2004.
The supply, she said, was likely to increase by 30 hectares
with the completion of the construction of the Fajar Industrial
Estate in Bekasi and by another 140 hectares with the completion
of the Pancatama industrial estate in Serang, Banten, in the
first half of 2005.
Djafar said the average occupancy level for the retail
property market in Greater Jakarta might decrease in 2005 because
construction of new retail centers would be completed while their
occupancy would take some time.
"The retail centers scheduled for completion in 2005 are
expected to add approximately 1.01 million square meters of
retail space to the Greater Jakarta market. Some 67.3 percent of
these new centers will be strata-title trade centers." (004)