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)