Still Challenging, Yet Promising Outlook: Quarterly - Office - Jakarta - 6 October 2021

Quarterly | Office | Jakarta | 6 October 2021
Still Challenging, Yet Promising Outlook
Insights & recommendations

The office sector is still facing challenges throughout the remainder of 2021, but the pace of rental decline
seems to be slowing.
Net absorption is still negative, occupancy rates have dwindled, and rents remain under pressure. Despite
this, optimism has improved as we move towards 2022, particularly given a more positive outlook for
economic growth.
Landlords need to communicate closely with tenants who may be at risk of having to early terminate leases
and work to try to retain them. Landlords in oversupplied markets are advised to prioritise securing good
quality tenants over increasing rents. Property owners must also be more accommodative by offering
incentive packages, shorter lease terms, options in new leases and other benefits such as providing parking
and signage. On the tenant side, we recommend occupiers capitalise on current weak leasing sentiment to
negotiate better terms before the window of opportunity closes.
2020–25
Q3 2021 Full Year 2021 Annual Avg
Demand is expected to improve 1.0%-1.5% per
annum in 2021-2025. The logistics,
pharmaceuticals, technology and energy sectors
Demand will drive office demand. -56,542 sq m -136,178 sq m 142,358 sq m
Tenants’ preference for high quality, tech-enabled
and wellness-enhancing buildings will strengthen
in the future. In line with that, about 80% of total
0 sq m 266,231 sq m 244,112 sq m
Supply future office space up to 2025 will be high-end
buildings.
Annual Avg
QOQ/ YOY/ Growth 2020–25/
End Q3 End 2021 End 2025
Higher vacancies will increase occupier choice
0.02% -6.97% 1.13%
and provide tenants with the upper hand in
negotiations. However, we expect rents to
Rent improve in line with GDP growth, as supply stays IDR226,948 IDR217,919 IDR247,775
at relatively lower levels.
Vacancies are expected to increase about 1.5% 0.53 3.28 0.42
YOY in 2022, although such rates may decrease to
Vacancy about 1% per year given the lower supply in 2023- 21.6% 22.44% 21.24%
2025.
Selling prices are expected to stay flat in 2021. 0.60% 0.76% 1.01%
Given the limited future supply and the low
transaction volume, such prices are only likely to
Selling Price IDR44.7mio IDR45.6mio IDR48.3mio
grow slowly in 2021-2025.
Source: Colliers Indonesia. Note: IDR 14,386 = USD 1.00
1
Construction progress is still Need more time before
on track, but no buildings occupancy recovers
were completed in Q3
Cumulative supply Jakarta occupancy trend
Source: Colliers Indonesia Source: Colliers Indonesia
Supply flow has been in pause mode with no Occupancy remains on a downward trend. In the
project completed in the last three months. In the CBD, occupancy continued its downturn which
CBD, cumulative supply remained at 6.96 million has been evident the last seven quarters. The
sq m. We estimate the total supply in 2021 will average occupancy rate was recorded at 78.7% in
grow by 1.6% YOY, 50% lower than in 2020. Q3, or a 0.7% decline per quarter since Q1 2020.
However, the amount of total office space will Occupancy levels are expected to be relatively
grow substantially as some premium class office stable in Q4 2021 but still reflect a drop of 2.6%
buildings are expected to be completed in 2022- YOY. Although there is an indication of tenant
2023. Outside the CBD, supply also stagnated commitments to the considerable amount of
and remained at 3.63 million sq m this quarter. new office supply in 2022, new stock and
Construction activity slowed and the completion absorption rates will not balance, meaning that
of some building will be delayed. However, we occupancy will likely further decline in 2022.
still anticipate an additional circa 100,000 sq m
Areas outside the CBD also witnessed an
outside the CBD area in the last quarter 2021,
occupancy drop to 77.8% in Q3; 0.6% down QOQ.
reflecting 4.4% YOY growth.
As is the case in the CBD, occupancy has been on
Other than buildings which are currently under a continued decline since mid-2020. In fact, the
construction, several new projects are to be large upcoming supply is likely to put occupancy
launched soon. We anticipate more supply from under further pressure over the next three
2024 onwards, with the hope of positive months. We forecast an occupancy rate around
economic projections. 76% in Q4 2021, dropping approximately 4% YOY,
as we anticipate additional new space of 106,246
sq m will come to the market in that period.
Leasing activities are expected to pick up as the by new, premium office buildings.
progress of Covid-19 vaccines, coupled with a
In Q1 2021 the average rent outside the CBD fell
gradual relaxation of restrictions, should help
substantially. However, it gradually rose to
create a more conducive business sentiment.
IDR188,321 this quarter, increasing 1.5% QOQ.
Landlords, on the other hand, should also be
Similar to the CBD, the level of demand for office
aware of cost-saving strategies adopted by
buildings located outside the CBD is expected to
occupiers. Expansionary demand is likely to be
remain relatively low in the next few years. The
dominated by domestic and regionally based
only reason for upward adjustments in the
companies due to quicker approval processes.
overall rent is mainly because of the contribution
of new buildings which offer higher rents than
average market rentals.
The pace of rental corrections
continues to slow
Selling prices to stay flat in
Jakarta office trend
2021
Selling price
Source: Colliers Indonesia
The average rent in the CBD has been on a Source: Colliers Indonesia
downward trend for more than two years. After

dropping 7% YOY in 2020, the average asking The strata-title office sales market has been
rent continued its downward trend in 2021, albeit relatively quiet and, in the last nine months,
at a slower pace. In Q3, rent averaged average selling prices stayed at IDR54 million in
IDR248.042, only a decrease of 0.6% QOQ. With the CBD and IDR36 million outside the CBD. Sales
about 1.5 million sq m currently vacant space volume is expected to remain low. There is likely
available in the market, it is expected that more to be stagnation in selling prices, probably until
pressure will be on landlords. 2022.
Currently, asking rentals in some buildings
remains unchanged, but landlords will offer
competitive rental packages for certain tenants.
Asking rents will likely remain flat until the end of
2021, or only down by around 4% YOY. The level
of demand is expected to improve, although we
still see that potential rent increases will be partly
due to this, and partly due to higher rentals set
Appendix
New pipeline (under construction)
SGA Marketing
Project Name Location Region Developer
(sq m) Scheme
CBD
2021
Office One Rasuna Said South Jakarta Sentra Graha Sentosa 16,357 For Sale
2022
For Lease &

T Tower (BJB Tower) Gatot Subroto South Jakarta BPD Jabar 24,000
Sale
Thamrin Nine Central

Thamrin Putra Gaya Wahana 84,267 For Lease
(Autograph Tower) Jakarta
Thamrin Nine Central

Thamrin Putra Gaya Wahana 40,565 For Lease
(Luminary Tower) Jakarta
Menara BRI Gatot Subroto South Jakarta Bank Rakyat Indonesia 60,000 For Lease
Jakarta Office Tower Central

Sudirman MORI Building 90,000 For Lease
by MORI Jakarta
St Regis Office Tower Rasuna Said South Jakarta Rajawali Group 40,000 For Lease
2023
Indonesia Satu Central China Sonangol Media For Lease &

Thamrin 62,000
North Tower Jakarta Investment Sale
Indonesia Satu Central China Sonangol Media

Thamrin 65,500 For Lease
South Tower Jakarta Investment
continued
4
SGA Marketing
Project Name Location Region Developer
(sq m) Scheme
continuation
Outside the CBD
2021
TB For Lease &

Sanggala Tower South Jakarta Sapta Tunggal Mulia 9,900
Simatupang Sale
Pondok Indah Office Pondok

South Jakarta Metropolitan Kentjana 37,177 For Lease
Tower 5 Indah
TB For Lease &

The Sima South Jakarta Grage Trimitra Usaha 59,169
Simatupang Sale
2022
One Belpark Office Fatmawati South Jakarta Harmas Jalesveva 17,800 For Lease
Owner Suite by Dharmawa

South Jakarta Dharma Tatemono 24,000 For Sale
Dharmawangsa ngsa
MT
MTH 27 Office Suite South Jakarta Adhi Karya 25,000 For Sale
Haryono
Yos
Maritime Tower North Jakarta Menara Maritim Indonesia 30,084 For Lease
Sudarso
2023
Lippo Tower Holland Cempaka Central

Lippo Karawaci 27,000 For Sale
Village Putih Jakarta
Menara Jakarta Central For Lease &

Kemayoran Agung Sedayu 90,000
Office Tower Jakarta Sale
2024
Southgate Office Tanjung

South Jakarta Sinarmas Land 30,000 For Lease
Tower Barat
5
Supply pipeline 2021 - 2025, in the CBD Supply pipeline 2021 - 2025, in Outside the CBD
6
For further information, please contact:
Eko Arfianto Ferry Salanto
Senior Manager | Research | Senior Associate Director |
Jakarta Research | Jakarta
62(21) 3043 6726 62(21) 3043 6730
Eko.Arfianto@colliers.com Ferry.Salanto@colliers.com
About Colliers International

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment
management company. With operations in 66 countries, our more than 15,000 enterprising
professionals work collaboratively to provide expert advice to real estate occupiers, owners and
investors. For more than 25 years, our experienced leadership with significant insider ownership has
delivered compound annual investment returns of almost 20% for shareholders. With annualized
revenues of $3.0 billion ($3.3 billion including affiliates) and $40 billion of assets under management,
we maximize the potential of property and accelerate the success of our clients and our people..
Learn more at corporate.colliers.com, Twitter or LinkedIn
Copyright © 2021 Colliers International

This document/email has been prepared by Colliers for advertising and general information only.
Colliers makes no guarantees, representations or warranties of any kind, expressed or implied,
regarding the information including, but not limited to, warranties of content, accuracy and reliability.
Any interested party should undertake their own inquiries as to the accuracy of the information.
Colliers excludes unequivocally all inferred or implied terms, conditions and warranties arising out of
this document and excludes all liability for loss and damages arising there from. This publication is
the copyrighted property of Colliers and /or its licensor(s). © 2021. All rights reserved. This
communication is not intended to cause or induce breach of an existing listing agreement.
Quarterly | Apartment | Jakarta | 6 October 2021
Sales activity signals a recovery as

public activity restrictions gradually ease

Vaccination rates are being used as one of the indicators to assess the levels of Covid-19 curbs
across Indonesia in a bid to speed up inoculation programmes while allowing people to go about
their daily routines with the easing of public activity restrictions (PPKM). The PPKM level was
downgraded and more transaction-related activities can be held in marketing galleries and show
units. Consumers have become slightly more optimistic too, as shown in the quarterly sales
performance result. However, only some projects have benefited from the situation as some
criteria must be fulfilled by developers accelerating sales. In the long run, we expect the recovery
process to continue with no more stagnation.
2021–24
Q3 2021 Full Year 2021 Annual Avg.
The take-up rate has remained stagnant at

87.2%; but we saw a slight improvement on
number of unit being sold as compared to 87.2% 87 – 88% 87 – 89%
Demand
the previous quarter.
Four projects were completed in Q3 with an

additional 2,107 units. Another 940 units are
expected to be handed over by the end of 336 Units 3,383 Units 7,951 Units
Supply
2021.
Annual Avg
4%
Similar to the previous quarter, none of the
projects raised their prices. We expect the
Price IDR 35.01mio IDR 35.01 – IDR 39.4mio
stagnation to continue until the end of 2021.
35.02mio (end 2024)
1
2,107 new units were quarterly sales. Almost 200 units have been sold
during Q3, slightly higher than the sales on
completed in Q3 2021, with previous quarter. Growth in sales was largely
due to the management of the pandemic which
another 940 units in the provided increased optimism amongst potential
remainder of 2021 buyers.
No new projects were introduced in this quarter, Take-up rates

nonetheless, four projects comprising a total of
2,107 units were completed in the same period.
Jakarta now has 217,085 apartment units.
Going forward, another 940 units will be
available during Q4 2021, thus the total annual
supply of new apartments will be 3,383 units,
which is 15.7% lower than our expectations in
2020, meaning that there are still some more
project delays, despite not as many as in the
previous year.
Cumulative supply
Annual demand
As the pandemic and Covid-19 cases subside and

the public activity restrictions (PPKM) in Jakarta
were downgraded to level 3, we believe
developers will review the revival of unfinished
projects. We predict there will be more projects
During the PPKM, quite a few developers were
completed going forward.
trying to promote their projects via both offline
and online channels in more creative ways. Social
media, especially Instagram and TikTok, were
Consumers continue to opt for used extensively to show their show units online.
For instance, there is TikTok challenge for a
offline channels project located in Tangerang, to select the best
The absorption rate continues to remain flat at video of the show unit. Instagram Live and Zoom
87.29% (+0.09% QOQ or -0.41% YOY). However, have also been widely used to broadcast
we have witnessed some improvements in webinars. Offline, a luxury project utilised its
marketing gallery for a fashion exhibition to particularly for projects under construction
extend the function of the show unit. which have to compete with ready-stock units.
These existing units tend to maintain their price
Based on our observations, such strategies are
and they benefit from VAT relaxation, which
quite effective in raising awareness among
applies further pressure to projects under
potential customers. According to sales persons,
construction in fine tuning their prices
only around 10-20% of their customers have
dealt fully via online and all of them are As previously discussed, sales volume has been
customers who either live outside of the growing modestly this quarter, yet we have seen
Jabodetabek area or live abroad. Those, that this has only happened on certain projects.
particularly living in the Jabodetabek area, would There are four common factors associated with
prefer visiting the marketing gallery or show unit good absorption: The first is for projects that
by appointment despite the pandemic. This have introduced new towers but are offering a
means the existence of the marketing gallery and lower asking price than for previous towers.
show units are still important because customers Second, in most cases this has happened in
prefer to “feel the real unit” and do the projects with unit prices below IDR 2 billion.
transaction via an offline channel. Third, the newly completed projects that are
recently available benefit from the VAT incentive
We are quite optimistic in envisaging a sales
programme. And lastly, this applies only to
recovery in Q4 along with the improving situation
projects developed by well-known developers or
and developers have a chance to open their
those located within a big complex or
marketing galleries and show units.
mature/established locations.
Nevertheless, sales growth is projected to grow
modestly, not as significant as in previous years. We assume that asking prices will remain the
The take-up rate will remain at 87-88% by the same until the end of this year. In the longer-
end of 2021. term, prices will grow modestly, following the
inflation rate.
Does price stagnation boost

sales growth? Serviced Apartment
Asking prices across regions Supply
The apprehension that plagued the leasing
Q3 2020 Q2 2021 Q3 2021 QOQ YOY
market for a period of time has weakened the
supply side of the serviced apartment sector. In
CBD 52,318,687 52,318,687 52,318,687 0.00% 0.00%
Q3, there were no completed projects which
kept the total supply of serviced apartments at
South
Jakarta
39,266,783 39,391,128 39,391,128 0.00% 0.32% 6,221 units. Going forward, we still expect to
witness a completion delay of some under
Non-
prime 26,597,606 26,616,742 26,616,742 0.00% 0.07%
construction serviced apartment projects amidst
areas the current uncertain situation. The supply
Source: Colliers Indonesia pipeline is projected to grow 5.7% CAGR between
2021 and 2023
The asking price across regions has yet to

increase over three consecutive quarters,
Occupancy and rental rates
remaining stagnant at IDR 35 million/sq m (0.00%
QOQ or +0.13% YOY). Developers are still being The overall occupancy of serviced apartments in
pressured by the VAT incentive programme Jakarta dropped by six percentage points QOQ to
which was extended until the end of 2021, 51.7% mainly due to the negative impact of the
3
second wave of Covid-19. From July to August, Occupancy rate
the number of positive Covid-19 cases increased
and the market continues to be materially
affected by the mobility restrictions (PPKM
darurat) imposed by the government to halt the
spread of the virus. Some projects recorded a
significant drop in occupancy during July-August
as compared with June by an average of 20
percentage points. In September, the situation
gradually improved, evidenced by the decline in
positive cases. The government has further
extended the PPKM period but at a more relaxed
and gradual level. We anticipate pent-up demand
in the leasing market from domestic leisure and
business travel. Q4 is expected to be more
challenging because it is a traditionally low Source: Colliers Indonesia
season. We expect the local market to continue
to act as the major demand driver given the Rental rate
handful of new expatriate arrivals.
On the other hand, all of the serviced
apartments in Jakarta maintained their steady
rates, thus, the average rental rate remained the
same, at IDR 398,731 and IDR 364,025/sq
m/month in the CBD and South Jakarta (including
non-prime areas) respectively.
Appendix
Newly Finished Projects
Name of
Location Region Developer #units
Development
Samara Suites Jl. Gatot Subroto South Jakarta Synthesis Development 800
Daan Mogot City PT China Harbour Jakarta

Daan Mogot West Jakarta 820
(Tower A & B) Real Estate Development
The Pakubuwono
Jl. Sabang, Menteng Central Jakarta Pakubuwono Development 187
Menteng
Southgate Residence Jl. Tj Barat Raya,

South Jakarta Sinarmas Land 300
(tower 1) Jagakarsa
4
to pandemic. Going forward, we expect to see Rental rate
pipeline growing at 5.7% CAGR between 2021
and 2023.
On the other hand, In term of rental rate, all of
serviced apartment in Jakarta maintained their
rates steady and thus the average rental rate
remained the same, at IDR398,731/sq m/month
and IDR364,025/sq m/month in CBD and South
Jakarta (include non-prime area) respectively.
Occupancy rate
Appendix
Name of
Location Region Developer #units
Development
Synthesis
Samara Suites Jl. Gatot Subroto South Jakarta 800
Development
PT China Harbour
Daan Mogot City
Daan Mogot West Jakarta Jakarta Real Estate 820
(Tower A & B)
Development
The Pakubuwono Pakubuwono
Jl. Sabang, Menteng Central Jakarta 187
Menteng Development
Southgate Residence Jl. Tj Barat Raya,

South Jakarta Sinarmas Land 300
(tower 1) Jagakarsa
5
Under-Construction Projects
Apartment Name Location Region Developer #Units Status
2021
Daan Mogot City Daan PT China Harbour Jakarta Under-

West Jakarta 640
(Tower C & D) Mogot Real Estate Development construction
PT Diamond Land Under-

Apple Residence Jatipadang South Jakarta 300
Development construction
2022
Cempaka Central Under-

Holland Village Lippo Karawaci 400
Putih Jakarta construction
Jl. Gatot PT Buana Pasifik Under-

Gayanti City CBD 174
Subroto International construction
Pasar PT Griya Karunia Sejahtera
Under-
The Foresque Minggu, South Jakarta (Binakarya Propertindo 660
construction
Ragunan Group)
Holland Village Cempaka Central Under-
Lippo Karawaci 230
Phase II) Putih Jakarta construction
Aerium Taman Taman PT Itomas Kembangan
Under-
Permata Buana Permata West Jakarta Perdana (Sinarmas Land & 366
construction
(South Tower) Buana ITOCHU Indonesia)
Synthesis Residence Jl. Ampera Under-
South Jakarta PT. Synthesis Development 1100
Kemang (3 towers) Raya No.17 construction
Under-
Le' Parc Jl. Thamrin CBD PT. Putragaya Wahana 100
construction
Citra Living
Jl. Citra 7, Under-
Apartment (Lotus West Jakarta Citra Mitra Graha KSO 312
Kalideres construction
Tower)
Jl. H.R
The Residences at Under-
Rasuna CBD Rajawali Property Group 164
The St. Regis Jakarta construction
Said
Fatmawati City Under-
Fatmawati South Jakarta Agung Sedayu 1240
Center (2 towers) construction
Jl. Kebon Central Capitaland and Credo Under-

The Stature Jakarta 96
Sirih Jakarta Group construction
continued
6
continuation
Solterra Place (2 South Under-

Pejaten Waskita Realty 2000
tower) Jakarta construction
Southgate Residence South Under-

Tanjung Barat Sinar Mas Land 189
(tower 2) Jakarta construction
Southgate Residence
South Under-
(3rd tower - Altitude Tanjung Barat Sinar Mas Land 450
Jakarta construction
Tower)
East Under-
JKT Living Star Jl. Lap. Tembak PT Sindeli Propertindo 594
Vittoria Residence West Under-

Daan Mogot PT. Duta Indah Kencana 182
(tower A) Jakarta construction
2023
Pluit Residences North Binakarya Propertindo Under-

Pluit 500
(Tower Ibiza) Jakarta Group construction
Kebayoran
South Under-
Apartment Jl. Raya Ulujami Karya Cipta Group 344
(Diamond Tower)
Menara Jakarta Central Under-
Kemayoran Agung Sedayu 396
(Tower Equinox) Jakarta construction
Menara Jakarta Central Under-

Kemayoran Agung Sedayu 860
(Tower Azure) Jakarta construction
Tomang Park
Jl. Tawakal Ujung West Under-
Apartment (2 PT Phoenix Property 2000
Raya Jakarta construction
towers)
Jl. Kesehatan South Under-
Kasamara Residence PT MGM Propertindo 150
Raya Jakarta construction
Sakura Garden City Jl. Bina Marga East PT Trivo Group and Under-
2200
(phase 1) No.88 Jakarta Daiwa House construction
Dharma Tower Dharmawangsa South PT Dharma Tatemono Under-

72
Apartment VII Jakarta Property construction
continued
7
continuation
Jl. Kebon Under-

57 Promenade CBD Intiland 496
Melati construction
South Under-
The Padmayana Sinabung Adhi Karya 145
Cleon Park
East Under-
Apartment (2 Cakung, JGC Modern Land Realty 630
towers)
South Quarter TB South Under-
Intiland 336
Residence Simatupang Jakarta construction
TB South Under-
Arumaya Residence Astra Land 262
Simatupang Jakarta construction
Jl. D.I. East Under-

Tamansari Sky Hive Wika Realty 570
Pandjaitan Jakarta construction
LRT City Ciracas - East Under-

Ciracas Adhi Karya 1087
Urban Signature Jakarta construction
Jl. Yos North Under-

Norrington Suites PT Tri Raton Mega 286
Sudarso Jakarta construction
Sentra Timur
East Under-
Residence (Jade Pulo Gebang Bakriland Development 500
Tower)
The Newton 2 at Jl. Karet Under-
CBD Ciputra 624
Ciputra World 2 Sawah construction
South PT Diamond Land Under-

Apple Residence 3 Lebak Bulus 530
Jakarta Development construction
South PT Diamond Land Under-

Apple Residence 5 Pejaten Barat 400
Jakarta Development construction
2024
Pluit Seaview (Tower North Binakarya Propertindo Under-

Pluit 650
Bahama) Jakarta Group construction
continued
8
continuation
Sedayu City (Tower Pegangsaan North Under-

Agung Sedayu 936
Darwin) Dua Raya Jakarta construction
The Aspen Peak at South Under-

Fatmawati PT. Harmas Jalasveva 322
Admiralty (Tower D) Jakarta construction
The Sahid Asena
Under-
Apartment and Ciracas East Jakarta Sahid Group 476
construction
Garden
Cluny Residence (2 West Under-
Kebon Jeruk PT Alam Makmur Property 554
towers) Jakarta construction
Mega Under-
Pollux Sky Suites CBD Pollux Propety 216
Kuningan construction
Branz Mega Mega Under-

CBD Tokyuland 480
Kuningan Kuningan construction
Jl. Duren Tiga South JV Farpoint Realty & Under-

Loggia Apartment 254
Raya Jakarta Tokyotatemono construction
The Premiere MT
Jl. MT Under-
Haryono - LRT City East Jakarta Adhi Karya 390
Haryono construction
MT Haryono
Central Under-
Alonia Kemayoran Kemayoran Perumnas 209
South Under-
CORE Cipete Fatmawati Jaya Properti 190
Safa Marwa Tower Under-

Gate 5 TMII East Jakarta PT Prima Jaringan 600
(Marwa Tower) construction
Citra Landmark Under-

Ciracas East Jakarta Ciputra 600
(Tower 1) construction
Jakarta Setiabudi
South Under-
Savyavasa (3 Towers) Jl. Wijaya II International & Swire 600
Properties
Tamansari Equine Jl. Pulomas Under-
East Jakarta Waskita Realty 441
(Tower 1) Jaya construction
South Quarter TB South Under-

Intiland 336
Residence (Tower 2) Simatupang Jakarta construction
continued
9
continuation
West Under-
B Residence Grogol Daan Mogot MGM Propertindo 252
Mega China Railway Group Under-

Terrace Diamond CBD 268
Kuningan Limited construction
New pipeline for Serviced Apartment
Name of Development Location Region #units
2021
Somerset Kencana Jakarta Pondok Indah South Jakarta 148
Le Meridien Jakarta Jl. Jend. Sudirman CBD 318
Citadines Sudirman Jl. Karet CBD 253
2022
Fraser Suites Kebon Melati Kebon Melati, Tanah Abang CBD 140
Pan Pacific Serviced Suites

Thamrin CBD 179
Jakarta
Ascott Menteng Jakarta Menteng CBD 151
2023
PARKROYAL Serviced Suites Thamrin CBD 180
Somerset Mega Kuningan

Mega Kuningan CBD 168
Jakarta
10
Hern Rizal Gobi Ferry Salanto
Manager | Research | Jakarta Senior Associate Director |
62(21) 3043 6727 Research | Jakarta
Rizal.Gobi@colliers.com 62(21) 3043 6730
Ferry.Salanto@colliers.com


Quarterly | Retail | Jakarta & Greater Jakarta |
6 October 2021
Retail industry enters a new phase of

innovation and safety

Arguably, the biggest business lesson from Covid-19 is that modern-day retail success is synonymous
with flexibility and adaptability. Reflecting on the malls that decided to re-open, differentiation or
special themes will become strategies used by landlords and retailers to survive mass store closures
and demand challenges from customers.
Destination properties will experience the biggest rebound. Despite this, landlords are expected to
continue working with retailers to keep occupancy rates up. As a result, some landlords have become
more open to negotiations with tenants looking for space.
Despite an expected slowdown in retail sales, the short-term outlook for the retail market is positive,
as a result of the loosening in public activity restrictions and the expected resumption in commuter
patterns as many office workers return to the office, at least on a part-time or hybrid basis.
2020–25
Q3 2021 Full Year 2021 Annual Avg
Tenants with leasing commitments are likely to
delay opening stores, while existing occupiers
will focus on transforming concepts or possibly -45,116 sq m -197,660 sq m 102,088 sq m
Demand
closing stores at existing location.
Additional retail space will continue to be

available until 2023. After that, the supply will
31,200 sq m 128,100 sq m 118,289 sq m
Supply largely depend on retail performance in 2022.
Annual Avg
We expect an increase in inquiries for retail 0.45% 0.18% 3.89%
space and a heightening of sales volume once
the situation is back to normal, given that
Rent IDR473,970 IDR472,712 IDR550,770
landlords will become more confident in
increasing rental tariffs.
It will be another year before a substantial 0.67 5.18 -0.06
increase in the absorption rate is seen, but the
Vacancy abundance of future supply will see increasing 29.30% 29.60% 24.1%
vacancy rates up to 2023.
Relatively speaking, the service charge will be 0.15% 0.80% 4.13%

Service
in line with economic growth for the 2022-
Charge 2025 period. IDR133,278 IDR134,147 IDR151,641
1
Further delay in project retail space in the Bodetabek area to 2.84 million
sq m. Two new shopping centres will add to the
completions inventory by the end of 2021.
Cumulative supply
Occupancy

Annual supply The downward trend in occupancy over the past

one and a-half years has continued. Vacant
spaces increased due to weakening business
activities, with many retailers deciding to close
stores. In Jakarta, the average occupancy rate
was recorded at 71.2% in 3Q21, a fall of about
7% since 2Q20, when the pandemic was
announced. In the greater Jakarta area, the
average occupancy rate was 70.8% in 3Q21,
down about 7% compared to 2Q20. The
occupancy outlook may not look good in the
short term, particularly when the erratic nature
of the pandemic so far is considered, and
projected upcoming supply will also add
pressure. We hope that tenants with leasing
commitments are able to at least maintain or lift
the occupancy rate in the next three months.
The escalation in Covid-19 cases in July-August
2021 put pressure on retail market, including the
schedules for mall openings. In Jakarta, the
developer of Aeon Mall Tanjung Barat is awaiting
the right time to open. The construction of other
future malls is ongoing, albeit at a slower pace.
Without any new malls being completed in 3Q,
total retail space remains at 4.86 million sq m. In
the meantime, the Margo City extension project
added additional supply to the retail market in
the greater Jakarta area in 2021, bringing total
Average rent remainder of 2021. The retail outlook will largely
depend on the traffic allowed into malls.
Vaccinations will be one of the catalysts for
restoring crowds and increasing sales volumes,
in order for landlords to begin considering
adjusting rents.
Service charges have been quite stable
throughout 2021. During 3Q, the service charge
tariff was IDR149,199 in Jakarta, and IDR117,760
in the greater Jakarta area.
Retail businesses adapt in

various ways to help drive
footfall
Average service charge
Malls are still allowed to open during public

activity restrictions (PPKM), but visitor numbers
are still low, in line with a limited capacity for
dining-in at restaurants and entertainment at the
likes of cinemas and kid’s playgrounds. In facing
a prolonged pandemic, change and
improvisations in concepts continue to be
adopted, especially by large wholesalers or
supermarkets adopting different business
models and offering fresh and new brands.
Every tenant needs to survive this challenging
and erratic situation. Flexible physical shops give
retailers the ability to modulate their operations
according to changing needs and circumstances.
Pop-up stores and modular solutions will
Landlords are keeping rents stable to keep
become more common as retailers look to
retailers in premises. An approach used to
optimize their financial standing, while still
maintain tenants, other than charging fixed rents,
finding ways to connect with customers. Flexible
is to offer revenue-sharing schemes.
store design also affords considerable
During 3Q the average rent was at IDR567,007 in advantages for landlords, who are reliant on
the Jakarta area. This figure was relatively stable consistent tenancies. By using modular,
after a slight increase in 2Q21, which was mainly adaptable design solutions and offering flexible
due to the operation of new malls with higher leases, landlords will attract tenants and
rates. Similarly, in the greater Jakarta area, a generate a new form of consistency more in
newly operating mall brought the average rent to keeping with the existing state of affairs.
IDR384,121 for the quarter, up a modest 0.8%
Currently, consumers are focused on maximizing
QOQ.
the efficiency of shopping trips and minimizing
Rents in both Jakarta and the greater Jakarta area the time spent in-store. To make money now,
are likely to stay relatively stable for the and in the future, brands and retailers must
produce what customers want and adapt to new rewards. In terms of area, suburban retail
buyer sentiment and behaviour by offering centres will experience increasing demand from
demand-driven products. Shoppers will the population migration driven by work-from-
appreciate a more focused, customized shopping home options. Conversely, urban retail’s
experience that features suggested products and recovery will lag, given its reliance on a daily
is genuinely interesting. Retailers who can office population, international tourism and
successfully blend their physical store with a mass transit usage.
customized digital experience will reap the
Appendix
New pipeline projects
Shopping Centre NLA

Location Region Developer Status
Project (sq m)
Jakarta
2021
Aeon Mall Tanjung Lenteng Under

South Jakarta Sinarmas Land & Aeon 39,200
Barat Agung Construction
2022
Lippo Mall East Side

Cempaka Central Under
(within Holland Lippo Karawaci Tbk 44,000
Putih Jakarta Construction
Vilage)
2023
Menara Jakarta Central Under

Kemayoran Agung Sedayu Permai 90,360
Shopping Mall Jakarta Construction
2024
Shopping Mall at
Fatmawati City Fatmawati South Jakarta Agung Sedayu 45,500 In Planning
Center
continued
4
Shopping Centre NLA
Project (sq m)
continuation
Greater Jakarta
2021
Grand Dhika City Under

Bekasi Bekasi Adhi Persada Property 24,000
Mall Construction
Under
Paradise Walk Serpong Tangerang Progress Group 15,600
Construction
2022
Under
Bintaro x'Change 2 Bintaro Tangerang Bintaro Jaya 51,000
Construction
Embarcadero Under
Bintaro Tangerang Lippo Karawaci Tbk 5,000
Lifestyle Mall Construction
2023
Under
Pakuwon Mall Bekasi Bekasi Bekasi Pakuwon Group 40,000
Construction
Under
Aeon Mall Deltamas Deltamas Bekasi AEON & Deltamas 90,000
Construction
2024
Plaza Indonesia Plaza Indonesia Realty & Under

Cikarang Bekasi 55,685
Jababeka Graha Buana Cikarang Construction
continued
5
Shopping Centre NLA
Project (sq m)
continuation
Pancoran Andyka Investa (Trivo

Metrostater Depok Depok 30,000 In Planning
Mas Group)
2025
Living World at Kota

Cibubur Bekasi Sinarmas Land 45,000 In Planning
Wisata
6
Eko.Arfianto Ferry Salanto
Senior Manager | Research | Senior Associate Director |
Jakarta Research | Jakarta
62(21) 3043 6726 62(21) 3043 6730
Eko.Arfianto@colliers.com Ferry.Salanto@colliers.com


Quarterly | Industrial Estate | Greater Jakarta |
6 October 2021
High-tech Sector Continues to

Strengthen

The pandemic has led to changes in lifestyles which are altering behaviours as a result of an
increased dependence on technology. Today, technology is also illustrating the development of
industries in support of lifestyles and corporate requirements. The automotive industry has
gained traction again but this time to more tech-savvy products like electric vehicles (EVs). We
anticipate more EV manufacturers will consider Indonesia as their production base and further
expect an expansion in data centres in several locations, mainly within industrial estates.
In the current sluggish market, landlords need to look ahead to potential growth in technology-
based companies. It would also be best to anticipate future needs such as preparing
infrastructure and energy resources.
2021–24
We continue to believe that requests from

the automotive, logistics, food, chemical-
Demand
based and consumer goods industries will
continue to highlight industrial markets, 52.72 Ha 219.5 Ha 276.5 Ha
apart from other high-tech companies.
Landlords will still focus on continuing their

expansion plans though at a slower pace.
Land expansions will occur largely in the 0 Ha 200 Ha 216 Ha
Supply
Serang, Karawang and Sukabumi regions.
Annual Avg
We do not expect to see price adjustments

until the end of 2021, but they may
Price potentially increase once the market USD198.75 USD198.75 USD205.5
recovers.
1
New land expansion came to a Technology-based companies
standstill continue looking for land
We did not monitor any new construction activity Sophisticated industries are highlighted this
compared to the previous period. New industrial quarter with remarkable sales in the industrial
supply is still mainly coming from Serang, the sector. A global automobile manufacturer from
south area (Sukabumi) and the Karawang to South Korea extended their presence in
Subang regions. In Serang, Modern Cikande is Indonesia, buying almost 32 hectares of land in
now preparing an additional 80 hectares. At the Karawang New Industry City (KNIC). The auto
same time, we are monitoring developments in company is planning to make Indonesia a hub
the new industrial estate in Cikembar, Sukabumi for car battery and electric vehicle manufacturing
Regency of around 223 hectares. Meanwhile in in Southeast Asia. This sizeable investment in
Karawang, apart from the potential expansion of battery and electric vehicle production is a
the industrial location in Trans Hexa Karawang, strategic plan for the Korean auto manufacturer
we are also seeing land extension in KIIC in to secure a larger share of the vehicle market in
preparation for infrastructure on their 105 Indonesia, where Japanese companies have held
hectares of land. a dominant share of the market.
Further west, in addition to Modern Cikande, This huge land transaction, which occurred in
potential expansion will be coming from a new Q3, has helped fuel the entire performance of
industrial estate located near Bojonegara port. In industrial transactions in the greater Jakarta
the area further east, several landlords have area. From our records so far, total land
already begun preparations to develop modern transactions in 2021 YTD, are composed of about
industrial estates near the future Patimban port. 64% of total land transactions made last year.
This is quite satisfactory in light of the obstacles
Industrial land stock status in some active and we have been facing as a result of the currently
future industrial Estates sluggish economy.
Land absorption in Q3 2021

Land absorption in 2021YTD Jababeka IE. Two land plots totalling about 12
hectares were acquired by data centre
companies in Greenland IE while about one
hectare was sold to the same industry in
Jababeka.
In total, Jababeka sold 5.1 hectares this quarter.
Apart from the transaction concluded by a local
data centre company, a Korean leather industry
bought about 4.2 hectares. Still in Bekasi, BFIE
reported a one hectare transaction to a local
packaging company. Other industrial estates in
Bekasi are now focusing more on the operations
side, maintaining their existing tenants because
most of the land plots have been sold out.
Source: Colliers Indonesia In Karawang, aside from the substantial sales
made by KNIC, Suryacipta also registered a deal
Meanwhile, the expansion of high-tech industries
with the chemical industry of around 1.3
continues. The pandemic-driven digitalisation is
hectares. Kota Bukit Indah (Besland Pertiwi)
highlighted by increasing traffic online and for
confirmed a leasing deal about 0.5 hectare for a
enterprises which require infrastructure to
Japanese company (music instruments) to store
support their transition from offline to online
their goods. Meanwhile, other active estates in
and on-premises to the cloud. Post-pandemic,
Karawang have yet to conclude any transactions
the online world is real, viable and the way
this quarter but remain optimistic of receiving
forward for tomorrow. Both private and
more inquiries in Q4.
corporate customers are demanding 100 percent
connectivity with no downtime. Growing data We did not record any leasing transactions in the
centre operations in some locations, mainly southern area this quarter. One industrial estate
within industrial estates, noted the increasing in Bogor that focuses on leasing both land and
needs of performance and efficiency, while buildings noted that some tenants are not in a
reducing costs. They have expanded their position to expand their presence, while a few
presence since a couple years ago. A data centre have even retreated from the location, especially
can be built anywhere with power and those that rent land. While one tenant added to
connectivity, but the location has an impact on their rental area, overall leasing activity in the
the quality of service it can provide to its southern part of greater Jakarta area was quite
customers. On the flipside, a poor location can dormant. As land stocks are limited in Bogor, we
result in unstable connections and efficiency do not expect transactions at significant amounts
problems. YTD data centre expansion has in this region. Sentul reported selling two
contributed to about 14% of total land warehouse units this quarter, totalling almost
transactions. 800 sq m of land.
Automotive-related industries YTD make up Griya Idola in Tangerang has so far sold one
about 58% of total transactions, or about 68 warehouse unit. This small transaction might be
hectares. This is a repeat of a few years ago followed with a bigger transaction in Q4. Overall,
when the automotive sector was the main driver transaction activity, albeit relatively small, has
for land absorption. The need for logistics and signalled a prosperous outlook. Further west,
warehouse facilities still prevails but not Serang has so far only contributed a somewhat
necessarily within industrial estate locations. small transaction from local building material
companies composing a total of 0.8 hectare in
For high-tech industrial, we recorded three
Modern Cikande and warehouse leasing in KIEC.
transactions of around 13 hectares involving
Going forward, we expect a sizeable transaction
data centre companies at the Greenland IE and
in Serang.
3
Types of active industries involved in the transactions 2021YTD

Maintaining price to adjust
Annual industrial land absorption
with the laggard market
The market has naturally adjusted to the current
sluggish condition. All industrial landlords
decided to keep their prices unchanged,
particularly during this buyers’ market. This will
likely prevail until the end of 2021 but might be
reviewed next year provided that economic
conditions improve.
Of all the transactions, in both sales and leasing,

the industrial market concluded about 52.7
hectares, slightly lower than in Q2. Total
transactions YTD accounted for a total of 134.9
hectares or about 70% of the total in 2020.
4
Land and industrial building rental tariff Maintenance costs
On the leasing front, to ensure the offer remains Likewise, amidst the fact that some industrial
attractive for new tenants or those planning to tenants are having financial issues and struggling
expand their operations, the rental tariff for both to survive in this tough situation, maintenance
land and buildings remains flat. tariffs remain unchanged.
Greater Jakarta industrial land prices Greater Jakarta industrial maintenance costs
Industrial Land Prices and Maintenance Costs (in USD equivalent)
Land Price (/sq m) Maintenance Cost (/sqm/month)

Region
Lowest Highest Average Lowest Highest Average
Bogor -
208.54 382.32 295.43 0.06 0.07 0.07
Sukabumi
Tangerang 194.63 260.67 198.11 0.03 0.08 0.06
Karawang 150.00 155.00 157.50 0.05 0.10 0.08
Bekasi 205.06 222.44 214.10 0.06 0.08 0.08
Serang 118.17 139.02 128.60 0.03 0.05 0.05
5
Ferry Salanto
Senior Associate Director |
Research | Jakarta
62(21) 3043 6730
Ferry.Salanto@colliers.com


Quarterly | Hotel | Jakarta | 6 October 2021
Back to Square One

The increasing spread of Covid-19 has forced the government to again tighten rules and
restrictions on mobility. One of the visible impacts is the number of delays or cancellations of
activities at the hotel, this has certainly had an impact on the decline in the hotel’s performance.
2021–25
Several new hotels have started operating, it

is hoped that the hotels in the pipeline will 285 rooms 773 rooms 431 rooms
Supply also operate according to schedule.
Annual Avg
2.8% 12.7%
Occupancy will start to increase when
people's mobility is more flexible. 12.5%
Occupancy 46.8% 49.9%
4.1% 2.4%
The increase in room rates will follow the
9.4%
occupancy rate.
Room rates USD46.4 USD49.5
1
Supply Performance
Jakarta has two new hotels, one five-star hotel The hotel occupancy rate in Jakarta has begun to
(223 rooms) and one four-star hotel (168 rooms). improve. This is, of course, due to mobility and
With the addition of these two hotels, the total business activities which have increased, but
number of hotel rooms in Jakarta is 44,275 over time, cases of Covid-19 have spread in
rooms. The new five-star hotel is the first since Indonesia, including in Jakarta which increased
2019. quite significantly in the middle of the year. This
forced the government to act by limiting people’s
Cumulative hotel projects mobility and activities.
The implementation of the emergency
Community Activity Restrictions (PPKM) by the
government last July brought hotel conditions
back to where they were at the start of the
pandemic. Mobility was curtailed, with many
activities postponed or even cancelled, MICE
activities were increasingly restricted, and hotel
facilities were mostly closed. This pointed to the
prospects of a large decrease in guests staying at
the hotel, especially corporate and government
clients. For staycation guests, there is still the
possibility that they will choose to stay at a hotel
instead of going on vacation out of town.
Source: Colliers Indonesia However, the number of hotel facilities that are
closed is a further consideration, especially for
Cumulative hotel rooms those staying with families and bringing children.
This decline in occupancy can be seen in the
following graph.
Monthly AOR
Source: STR
Monthly ADR Although the spread of Covid-19 has begun to
decline in Indonesia, especially in Jakarta, the
Covid-19 pandemic is still ongoing. The
government continues to adapt to controlling its
spread in light of infections globally and viral
mutations. Starting September 17, 2021, through
a Circular Letter (SE) from the Ministry of
Transportation concerning Guidelines for the
Implementation of Travel for People from
Overseas by Land (SE Number 75 of 2021), Sea
(SE Number 76 of 2021), and Air (SE Number 74
of 2021), the government has imposed
restrictions on the arrival of international
travelers at national border posts (PLBN), ports,
and airports (airports). For airports, only
Source: STR Soekarno Hatta Airport, Tangerang, Banten and
Sam Ratulangi Airport, Manado, North Sulawesi
As we know, Jakarta is big in the corporate and are open. This means that foreign tourists who
government market. However, since the wish to visit Bali must first go through either
pandemic, the number of corporate guests has Soekarno-Hatta Airport, Tangerang or Sam
decreased. Instead, the number of Free Ratulangi Airport, Manado and have previously
Individual Traveler (FIT) guests has increased. FIT quarantined.
guests can be those who travel on business, but
do not use the corporate rate facility, as most As we know, one way of controlling the
make reservations using OTAs. transmission of Covid-19 is through contact
tracing. This applies to those who have just
Until September 2021, Covid-19 infections in arrived from abroad. The government is
Indonesia have begun to decline. This prompted cooperating with hoteliers by using their hotels
the government to reduce the level of PPKM in as repatriation locations (at registered hotels
several cities in Indonesia, including Jakarta. The only). These hotels are appointed by the
decline in the PPKM level in Jakarta made the government through an assessment from
government also adjust several regulations. related parties. So far, the hotels that have
Community mobility has begun to increase and become repatriation locations are four-star and
economic activity has started to improve. From five-star hotels. According to several hoteliers,
the description of the hotelier, there have been the use of hotels as repatriation locations is
several inquiries regarding activities at the hotel. sufficient in helping the occupancy rate, at least
However, regulations issued by the government during the PPKM implementation. However, the
will still be the basis for which any activities are impact is not known with certainty.
implemented.
3
Appendix
STR
Opening
Hotel Name Equivalent Location Region #Rooms
Time
Rate
4-star
Sutasoma Hotel Undefined Jl Dharmawangsa South Jakarta 111 Q1 2021
Hilton Garden Inn Jl. Taman Palem

Upscale Class West Jakarta 168 Q3 2021
Taman Palem Lestari
5-star
The Langham Jakarta Luxury Class SCBD CBD 223 Q3 2021
New Pipeline
STR
Projected
Hotel Name Equivalent Location Region #Rooms Project Status
Completion
Rate
3-star
Upper
West
Fairfield Slipi Midscale Slipi 280 Documentation 2024
Jakarta
Class
4-star
Ashley Tang Wahid Central Under

Undefined 147 2022
Hotel Hasyim Jakarta construction
Puri West
Veranda Puri Undefined 180 Documentation 2023
indah Jakarta
continued
4
STR
Projected
Hotel Name Equivalent Location Region #Rooms Project Status
Completion
Rate
continuation
Upper
Park Regis Raden Central Under
Midscale 180 2023
Menteng Saleh Jakarta construction
Class
5-star
HR
Luxury Under
St Regis Rasuna CBD 280 2021
Class construction
Said
Park Hyatt Luxury Kebon Central Under
220 2022
Hotel Class Sirih Jakarta construction
Waldorf Luxury Under

Thamrin CBD 183 2023
Astoria Class construction
5
Nurul Yonasari Ferry Salanto
Senior Research Executive | Senior Associate Director |
Research | Jakarta Research | Jakarta
62(21) 3043 6728 62(21) 3043 6730
Nurul.Yonasari@colliers.com Ferry.Salanto@colliers.com



Still Challenging, Yet Promising Outlook: Quarterly - Office - Jakarta - 6 October 2021

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Still Challenging, Yet Promising Outlook: Quarterly - Office - Jakarta - 6 October 2021

Uploaded by

Copyright:

Available Formats

Quarterly | Office | Jakarta | 6 October 2021

Still Challenging, Yet Promising Outlook

Insights & recommendations

Source: Colliers Indonesia Source: Colliers Indonesia

Source: Colliers Indonesia

downward trend for more than two years. After

For Lease &

Thamrin Nine Central

Thamrin Nine Central

Jakarta Office Tower Central

Indonesia Satu Central China Sonangol Media For Lease &

Indonesia Satu Central China Sonangol Media

Outside the CBD

TB For Lease &

Pondok Indah Office Pondok

TB For Lease &

Owner Suite by Dharmawa

Lippo Tower Holland Cempaka Central

Menara Jakarta Central For Lease &

Southgate Office Tanjung

Source: Colliers Indonesia

Source: Colliers Indonesia Source: Colliers Indonesia

About Colliers International

Copyright © 2021 Colliers International

Sales activity signals a recovery as

Insights & recommendations

The take-up rate has remained stagnant at

Four projects were completed in Q3 with an

Source: Colliers Indonesia. Note: IDR 14,386 = USD 1.00

No new projects were introduced in this quarter, Take-up rates

Source: Colliers Indonesia

Source: Colliers Indonesia

As the pandemic and Covid-19 cases subside and

Does price stagnation boost

The asking price across regions has yet to

Source: Colliers Indonesia

Daan Mogot City PT China Harbour Jakarta

Southgate Residence Jl. Tj Barat Raya,

Source: Colliers Indonesia

Source: Colliers Indonesia

Southgate Residence Jl. Tj Barat Raya,

Source: Colliers Indonesia

Apartment Name Location Region Developer #Units Status

Daan Mogot City Daan PT China Harbour Jakarta Under-

PT Diamond Land Under-

Cempaka Central Under-

Jl. Gatot PT Buana Pasifik Under-

Jl. Kebon Central Capitaland and Credo Under-

Solterra Place (2 South Under-

Southgate Residence South Under-

Vittoria Residence West Under-

Pluit Residences North Binakarya Propertindo Under-

Menara Jakarta Central Under-

Dharma Tower Dharmawangsa South PT Dharma Tatemono Under-

Jl. Kebon Under-

Jl. D.I. East Under-

LRT City Ciracas - East Under-

Jl. Yos North Under-

South PT Diamond Land Under-

South PT Diamond Land Under-

Pluit Seaview (Tower North Binakarya Propertindo Under-

Sedayu City (Tower Pegangsaan North Under-

The Aspen Peak at South Under-