Property market shows positive outlook in second half

The Jakarta Post, Jakarta

The positive performance of this year's economy has largely contributed to an optimistic property market outlook in Jakarta, with a large number of new units becoming available by the end of the year.

Based on the Jakarta Quarterly Property Market Review issued on Thursday by property market consultant PT Procon Indah, all property sectors recorded significant increases during the first six months.

The increasing number of units in all sectors -- office, retail, rental apartments and condominiums -- contributed to a 10.1 percent rise in the property index recorded at the Jakarta Stock Exchange from 71.4 as of the end of January.

Procon chief executive officer David Cheadle said the positive performance of the country's economy was responsible for keeping the property business attractive for investors.

"With investment coming in, several sectors, especially the office sector, will grow, while the increasing number of foreign workers has made the apartment and condominium market boom. In short, strong demand will fuel improvements in all sectors," he said.

Aside from the good signs of growth in the first semester, the company's report also highlighted possible significant increases in units that would open up during the second half of the year.

The report said that the extra units that will be available in the office sector were projected to reach more than one million square meters (sqm), indicating a 20 percent rise. The current supply is estimated at 5.15 million sqm of office space, with an 83.6 percent occupancy rate.

Meanwhile, the retail market was projected to have an additional 1.58 million sqm of space, on top of the existing 2.62 million sqm throughout Greater Jakarta. As of June, 81.8 percent of the total retail space had been occupied.

The apartment sector, which currently has 16,304 units with an occupancy rate of 71 percent, would have more than 1,600 additional units by the end of 2005, the report said.

While 4,561 condominium units would open up by the end of the year, adding to the existing number of 36,694 with a 90.5 percent sales rate.

Procon director, Lini Djafar, said that in addition to the increase of property units, prices in various sectors would also increase due to higher construction costs.

However, she said, based on the company's research, the price increases would not stop customers from purchasing property units.

"It shows that property remains an attractive option for some people to invest in," Lini surmised. (006)