Public demand for medium-class property to increase

JAKARTA (JP): Demand for medium-class commercial property in the capital will increase, a consultant believes.

The managing director of PT Procon Indah, Craig Williams, said yesterday that property developers and operators will tend to increase sales of medium-class buildings, apartments and hotels in areas outside the central business district.

"Most customers have less money to spend for high quality buildings," Williams said, quoting a newly published report entitled "Property Market Outlook."

Procon Indah is an affiliate of a London based international property consultant, Jones Lang Wootton (JLW), whose network spreads over 42 cities. JLW publishes the report every six months.

Williams said that to meet the market trend, local developers should build office buildings on Jl. Warung Buncit and in the Slipi area, both in South Jakarta, rather than in the plush area along Jl. Jendral Sudirman, Jl. Gatot Subroto and Jl. Rasuna Said.

The report said that the average occupancy rate of office buildings in the city increased by over three percent to 90.2 percent in June 1994 as compared to the last report.

It noted that no new office buildings were completed during the first half of this year and the total stock as of the end of June remained at 1.82 million square meters.

Approximately 220,500 square meters of prime office space are currently under construction and are due for completion in the third and forth quarters. The new office buildings include the Jakarta Stock Exchange Building, Bank Artha Graha, Mashill Tower, Bapindo Tower One and Mid Plaza Two, on Jl. Jendral Sudirman and Times Square on Jl. Rasuna Said.

Apartments

The report also revealed that the occupancy rate of rental apartments declined from 91.2 percent to 81.4 percent during the first six months of this year, during which some 1,040 units in South Jakarta entered the market, bringing total apartment supply, both rental and strata title ownership, to 3,970 units.

An estimated 880 rental apartment units will be completed by 1997.

In the hotel market, the report said that the opening of two additional first-class hotels, the 123-room Ibis Kemayoran and the 669-room Shangri-La, has increased market competition significantly.

It said that four new four-star hotels, including Travelodge and Equatorial Hotel in North Jakarta, the Kartika Chandra Hotel expansion in South Jakarta and the Garden Hotel expansion in North Jakarta, are projected to open in the third quarter of this year.

"The exact opening date of the Regent Hotel remains uncertain but it is likely to be in either late 1994 or early 1995," it said.

The report stated that the construction of a number of retail places will soon be completed, including the Sunter Mall and Metro Sunter Plaza, both in North Jakarta, as well as the expansion of the Arion Plaza in East Jakarta.

Meanwhile, Williams said that red tape and bureaucracy still hamper the development of the property industry.

He said it is a common practice for a developer to go to three different authorities and get three different answers about building regulations.

"Inexperienced developers, particularly those who want to get rich quickly, have also created significant problems," he said, referring to consumers' complaints of being cheated by developers.

Susan Pranata, a director of Procon Indah, said that developers frequently exaggerate their products on brochures, promising to use high quality materials and provide beautiful gardens, telephones and excellent security.

It turns out that they use cheap materials and don't provided the facilities promised. (09)