MARKETBEAT

JAKARTA, INDONESIA

CONDOMINIUM SNAPSHOT
A Cushman & Wakefield Research Publication

Q4 2011

ECONOMY
Indonesias economy has continued to strengthen in 2011 and its full year GDP growth is expected to reach 6.5% (from 6.0% in 2010). Other general economic indicators also showed very positive trends during the year, with inflation within government targets and a relatively stable currency exchange rate. Annual inflation for 2011 is expected to be below 5%, lower than the 6.96% recorded in 2010. The Rupiah exchange rate remained relatively stable at around Rp.9,000 per US$1.00, an appreciation of 0.2% over the full year. The stock market also continued its positive performance through the first ten months as evidenced by the composite index which closed at 3,791, an increase of 2.4% over that period.

ECONOMIC INDICATORS
2010 GDP Growth CPI Growth Central Bank-Rate 6.0% 7.0% 6.5% 2011 6.5% 4.5% 6.0% 2012F 6.3- 6.7% 5.3% 6.0%

Source: Government data (BPS, BI, Ministry of Finance), 2011

NEW COMPLETED PROJECTS

PROJECT Margonda Residence (Stage II) Casa Grande (Mirage & Avalon) Senopati Suites (Twr. 1) Margonda Residence (Stage II) Kalibata Regency (Twr. H,J,K) Green Park View (Twr. F) Mutiara Bekasi SEGMENT Middle Upper-Middle Upper Lower-Middle Lower-Middle Lower-Middle Lower-Middle APPROX UNIT SIZE (SQM) UNITS 625 24-48 470 104 400 2,400 1,064 828 46-191 131-305 24-48 20-33 20-35 22-72

OVERVIEW SALES ACTIVITIES

Greater Jakartas condominium sales activity remained stable throughout the fourth quarter of 2011. Both the sales rate of completed projects and pre-sales of future projects increased, by 0.5% and 0.6% over the last quarter. A significant number of projects totaling approximately 9,800 units were launched in the market during 2011. Some of these were offered with a distinctive concept, such as Kubikahomy with strata title apartment concept as a student dormitory, Sky Terrace with an eco-green lagoon concept, Green Bay Pluit with a green nautical living concept, and Ciputra World 2 (Tower Cedar) with a walk-to-work concept, whilst others were offered based on their strategic location and extensive support facilities. At the end of this year, the pre-sales rate of these newly launched projects reached 41%, with total net take-up of 4,000 units.

NEWLY LAUNCHED PROJECTS

PROJECT Nifarro (Twr. Eboni) Sea View Condominium Green Bay Pluit (Twr. M) Ciputra World 2 (Twr. Cedar) Senopati Penthouse Sudirman Terrace Woodland Park Residence (Twr. Matoa) Bogor Icon Residence (Twr. A) Bogor Icon Condotel (Twr. A) La Maison-Barito Residences Sudirman Suites Paragon Square (Twr. A & B) Bintaro Parkview SEGMENT Upper-Middle Upper-Middle Upper Upper Upper-Middle Middle Middle Middle Upper Upper Lower-Middle Lower-Middle APPROX UNITS* 226 496 349 63 425 221 120 180 80 414 804 1,100 APPROX PRICE (IDR/SQM)** 11Mio 12.8Mio 26Mio 24Mio 13Mio 11Mio 7.7Mio 7Mio 26Mio 23Mio 6.7Mio 6.3Mio

SALES DEMAND
In term of existing condominiums, the sales rate in the Greater Jakarta area reached 95.2%, an increase of 0.5% from the prior quarters figure of 94.7%, and by 0.4% compared to the end of 2010 at 94.8%. Meanwhile, the pre-sales rate rose by 0.6% to 67.2% quarter-on-quarter, representing a rise of 5.6% over last years figure. This significant year-on-year increase was dominated by middle class proposed projects, representing 62.5% of total transactions. The middle class segments buying capacity during 2011 was supported by several promotional mortgage programs offering various benefits such as; three year cash installments without interest; apartment loan with direct prizes; 2-years interest free for a five-year mortgage; and even a discount for bank interest as a subsidy from one apartment developer.

*) Total units are approximate numbers and may change over the construction period. **) Prices are estimated average hard-cash price term, before tax, on semi gross area.

The pre-sales rate of the middle and upper class segments increased during the year to 63% and 69.1% respectively, up from where they stood in 2010 at 62.4% and 53.4%. The notable growth of upper class pre-sales was related to high demand within projects such as Essence Darmawangsa (Tower South), Ambassade Residence (Tower A), Kemang Village (the Tiffany, the Infinity, the Intercon), Denpasar Residence (Tower Ubud), St.Moritz Penthouse, Residence 8, 1 Park Residence, Verde and Pakubuwono Signature. Conversely, the upper-middle class experienced a downturn from 63.4% to 62.3%. For existing low-cost condominiums, the sales rate rose by 1.8% from the third quarters figure of 92.5%, an increase of 3.3% over the prior years figure of 91.1%. In contrast, the pre-sales rate for this segment fell to 66.7%, a decline of 9.8% over 2010 and 17% below the earlier quarter. This sharp fall was correlated to the completion of 12 projects and the launching of six new projects during 2011.

to a 2009 to 2010 year-on-year change of only +6.6%). The average price for the prime area was Rp. 18.7 million /sq.m., an escalation of 4.4% over the third quarter and 16.4% year-on-year (higher again than the 2009to 2010 year-on-year increase of 6.4%).

OUTLOOK
Looking forward, the Greater Jakarta condominium market will see 18,140 units completed in 2012, assuming no major delivery delays. This large supply will likely increase market competition, with a potential impact to the overall sales rate. Developers will therefore need to offer compelling product advantages and be competitive in promoting their projects in order to boost transaction activity during 2012. In addition to competitive pricing, developers may need to offer more flexible payment terms, together with attractive mortgage programs from banks. Notwithstanding this higher supply level and competition between projects, the outlook is for higher sales in the year ahead, stimulated by new projects and positive buyer sentiments. SUPPLY, DEMAND, SALES RATE
90,000 80,000 70,000 60,000 50,000 40,000 30,000
38,464 35,791 43,024 40,407 57,752 54,392 67,473 63,640 73,679 69,270 77,625 73,595

SUPPLY
By the close of 2011, cumulative existing supply stood at 85,713 units, 1.4% higher than the prior quarter, with a cumulative sales rate of 95.2%. New supply came from the completion of Margonda Residence (Stage II), Tower Mirage and Avalon of Casa Grande, and Tower 1 of Senopati Suites, totaling some 1,199 additional units. Ten new condominium projects were launched in the market over the review quarter, offering 2,500 units. These projects comprised Tower Eboni of Nifarro Apartment; Tower M of Sea View Condominium Green Bay Pluit; Tower Cedar of Ciputra World 2; Senopati Penthouse; Sudirman Terrace; Tower Matoa of Woodland Park Residence; Tower A of Bogor Icon Residence; Tower A of Bogor Icon Condotel; La Maison-Barito Residences; and Sudirman Suites. With these additional projects, total proposed supply rose to some 41,109 units, which are expected to be completed progressively through to 2014. 2010 saw more new projects launched in the market compared to 2011 (24 projects with 12,400 units). In 2011, Greater Jakarta launched 9,800 units within 28 proposed projects; the majority within the middle segment (62.5%), followed by upper-middle (23%) and upper class (14.5%). In respect of low-cost condominiums, 13 projects were completed delivering 19,700 units, whilst only 3,900 units from six new projects were newly launched during the year. From a location perspective, most of the existing projects were situated in South Jakarta (28.1% of the total), followed by West Jakarta with 22.6%. For the proposed projects, the majority are also planned to be built in South Jakarta (39.5%), followed by North Jakarta (27.3%).

100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0%

85,713 81,582

units

20,000 10,000 0

20.0% 10.0% 0.0%

2005

2006

2007

2008

2009

2010

2011 SALES RATE

CUM SUPPLY

CUM SALES

CONDOMINIUM SALES PRICE

LOCATION LOCAL CURRENCY (RP/SQM) Q410 CBD Area Prime Area Q311 Q411 19.9Mio 1,646 1,548 EURO/SQM US$/ SQFT 205 192 12-MONTH OUTLOOK

16.49Mio 18.75Mio

15.90Mio 17.93Mio 18.72Mio

DEFINITIONS: CBD area includes the most prominent business corridors such as, Sudirman, Kuningan, Thamrin, Gatot Subroto, and Satrio. Prime residential area includes Kebayoran Baru, Senayan, Menteng, Pondok Indah, Permata Hijau, and Kemang, mostly representing areas that are favoured by highincome families and expatriates.

EXISTING SUPPLY BY DISTRICT

Depok Bekasi Tangerang East 3.41% 1.74% 0.55% 1.27% South 28.15% North 20.72%

PRICE GROWTH
Average prices of condominiums have continued to demonstrate year-on-year growth. The major non-demand factors influencing this have been the rise in land values (particularly in the CBD and prime area), as well as rising construction costs. By the end of the fourth quarter, the average price within the CBD area had reached Rp. 19.9 million per square meter (/sq.m.), a rise of 5% quarter-onquarter and 18.9% higher than the previous years close (compared
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West 22.60%

Central 21.56%

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.