Property demand stronger during first quarter
JAKARTA (JP): The Jakarta property market was stronger in this year's first quarter and building start-ups in almost all real estate sectors remained high despite the coming general election, a property analyst said yesterday.
PT Procon Indah's senior technical consultant and Jones Lang Wooton Asia's director, Phil Simpson, said the first quarter of 1997 saw new projects start in all property sectors.
Jones Lang Wooton's Susan Pranata said "the net take-up of office space in the central business district during the first quarter was 102,756 square meters, up 11 percent from the same period last year".
In the retail market, net take-up was 50,365 square meters, up 30 percent on the same period last year, Susan said.
The analysts were speaking at the release of the company's Jakarta property market outlook.
The report said 80 percent of the retail market's new supply had been sold before the properties were built.
In the residential estate market, 10 new estates taking up 1,650 hectares were launched in Greater Jakarta over the last six months.
The estates in the Cibubur-Cileungsi corridor were launched earlier this year.
Net take-up of rental apartments was 972 units, up 136 percent.
The report said the financial and securities, telecommunications and manufacturing sectors stayed the main sources of demand.
Corporate tenants wanting to lease many units were also prevalent.
An estimated 2,753 completed strata title apartments were sold during the first quarter -- a 113 percent increase.
There was also a healthy absorption of 115 hectares of serviceable industrial estate in Greater Jakarta, a 130 percent rise.
Former PT Procon Indah technical advisor, Craig Williams, said new taxes and not the general election were more likely to affect property demand.
Previously, property consultant PT DTZ Debenindo's managing director, Victor Chan, said the idea of uncertainty was caused mainly by Western media reports and not supported by a sound understanding of Indonesian politics.
Indonesia will hold the general election for its 500-member House of Representatives in May.
The 1,000-member People's Consultative Assembly, which includes all House of Representatives members, will elect a president in March.
"Overall, with continuing healthy levels of economic growth and direct investment in Indonesia, we predict that demand for property will remain high during 1997," Simpson said.
With inflation under control, Bank Indonesia has been lowering interest rates and in the last six months average deposit rates have fallen by between 1 percent and 2 percent, while prime lending rates have dropped by about 0.5 percent.
The report said the average office rental price was stable at US$13.50 a square meter but the range of asking rents at several premium quality buildings which will be completed in the next two years rose from between $17 a square meter and $19 a square meter to between $18 a square meter and $20 a square meter.
The average retail rental price for prime ground floor space in primary and secondary locations was steady at $77.10 a square meter and $51.40 a square meter a month respectively. (bnt/vin)