Q1 2022 ColliersQuarterly Jakarta

Quarterly | Office | Jakarta | 6 April 2022
Market upturn is underway, but

situation remains challenging
Insights & recommendations

Given the signal that the economy is expected to improve, office space enquiries started to
increase, despite the level of growth still being modest. However, remaining large vacant spaces
on the current market, due to a reduction in occupied space, kept landlords competitive in 2022.
We will also see large additional supply completed in 2022.
On the other side, landlords must continue striving to maintain building occupancy and become
more accommodative of tenants. Tenants are in a position to maximize the benefits of the
current market. Opportunities to relocate and lock in lease terms with competitive rental
packages are still widely available.
2022–25
Q1 2022 Full Year 2022 Annual Avg.
E-commerce, start-up companies and industries
related to IT continue to be the main drivers of
Demand
office demand. -252,083 sq m 190,307 sq m 173,124 sq m
Cumulative supply is expected to grow 2% per

year from 2021 to 2025. About 50% of total future
supply will be contributed by premium office
143,618 sq m 468,319 sq m 200,249 sq m
Supply buildings.
Annual Avg.
QOQ/ YOY/ Growth 2022–25/
End Q1 End 2022 End 2025
There is a likelihood of stronger demand this year 2.70% 0.84% 3.27%

and that should raise the confidence of landlords.
Rent
Rent is expected to grow 3.0%-3.5% per year in IDR221,429 IDR221,429 IDR245,867
the 2021-2025 period.
0.36 1.61 0.67

The vacancy rate is projected to decline, given
Vacancy soft future supply in the 2024-2025 period.
21.3% 21.34% 18.67%
Selling prices look to be stable with minimal 0.6% 0.76% 1.01%

transactions.
Selling Price IDR44.7mio IDR45.6mio IDR48.3mio
Source: Colliers Indonesia. Note: IDR 14,416 = USD 1.00
1
Given the huge annual supply Cumulative supply
projection, 2022 will remain a CBD Outside the CBD
tough period 8,000,000
6,400,000
Annual supply 4,800,000
CBD Outside the CBD 3,200,000

550,000
1,600,000
440,000
0
330,000
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
220,000
Source: Colliers Indonesia
110,000
0
Space efficiency remains a
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
common issue
Occupancy
The slower pace of office building construction
CBD Outside the CBD
continues and is likely to impact completion
100%
dates. As a consequence, landlords of yet to be
launched office projects will examine various 90%
possibilities for the last three months of 2022.
Shifting completion dates is expected to occur, 80%
however, some projects are already in operation.
Menara PNM, previously known as Office One (in 70%
Rasuna Said), and Menara BRI (in Gatot Subroto)
60%
are officially operational, bringing the cumulative
supply in the CBD to 7.04 million sq m in Q1 2022. 50%
Another five buildings will be ready and will add
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
around 200,000 sq m of new supply in the

remainder of 2022.
Another two office buildings beyond the CBD,
Maritime Tower and Pondok Indah Office Tower As anticipated earlier, the occupancy rate in the
5, were completed and are already operational, CBD was lower at 75.4% in Q1 2022, down 3%
bringing the cumulative office supply outside the compared to 2021. A similar trend was also
CBD to 3.69 million sq m in Q1 2022. South recorded outside the CBD where the occupancy
Jakarta will be the most active area outside the rate dropped nearly 4%, compared to last year,
CBD. Six office buildings are expected to be registering 75.3% in Q1 2022.
completed, contributing about 85% of total
additional supply in the 2022-2025 period.
The prolonged pandemic situation in 2020-2021 Market continues to favour
pushed tenants to opt for space efficiency,
leaving large vacant spaces. Newly operating tenants, while landlords
office buildings continue to face pressure from
low occupancy performance. Thanks to activity
remain flexible in transactions
restrictions being eased again and face-to-face
Average rent
office activity now allowed, more workers are
returning to offices. This is expected to result in a
CBD Outside the CBD
buoyant business climate that boosts demand
IDR400,000
for office space.
Demand is expected to improve, despite IDR320,000
relatively in a moderate growth. Several
IDR240,000
companies in sectors such as e-commerce and
financial technology (fintech) and industries IDR160,000
related to information and technology continue
to extend lease term or relocate to newer IDR80,000
buildings, while some have decided to reduce
IDR0
the size of occupied space. Going forward, office
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
business will depend on economic growth as a
catalyst for the market to start recovering, and
further, a lower supply projection in the next Source: Colliers Indonesia
three years should help the occupancy rate to
return to at least 80% in the near future. In a tenants' market, landlords generally
prioritize lifting occupancy, at least to a level that
Currently, quite a few companies have adopted a
covers operating balances. Large vacant spaces
hybrid working arrangement, but it is not clear
remain unabsorbed, making it logical to maintain
whether this system will become permanent due
rent at the current level. To achieve ideal
to the different policies and corporate cultures of
occupancy levels, landlords generally provide
each company. In the long term, back to office
competitive and a more tempting rental
working arrangements will return, but again
packages.
everything is dependent on the recent situation.
The rent level in the CBD continues to be
depressed, being recorded at IDR235,653, a drop
of almost 15% compared to the end of 2019.
Outside the CBD, the average rent stayed stable
in the past three months, registering at
IDR176.737 in Q1 2022. The rent level outside the
CBD has remained relatively stable, mainly due
to the contribution of newly operating office
buildings, which set rental rates higher than the
current market average. A similar trend is
expected in the CBD, mainly driven by the
operation of premium and grade A buildings
increasing the average rent calculation.
Landlords will continue to provide prospective
new tenants with incentives to increase
absorption, especially for buildings where the
recorded occupancy is below a safe level.
Sell now at discounted price or The strata-title office market tends to be static.
The average selling price in the CBD was
hold until the momentum is recorded at IDR54 million to IDR55 million, while
outside the CBD it was IDR 39 million. The strata-
back? title market situation is still difficult. Selling prices
have stayed the same, meaning that right now is
Selling price
not yet a good time to sell. However, this
depends on landlords' cash flows. Some
CBD Outside the CBD
landlords may have to accept lower prices rather
75
than pay operational costs (service charge).
60 Selling prices will continue to be greatly affected
by rental performances that have been
in IDR mio
45 constantly adjusted over the past two years.

Selling prices are expected to remain relatively
30
stable, at least until the end of 2022.
15
0
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
Appendix
Under construction projects
SGA Marketing
Project Name Location Developer
(sq m) Scheme
CBD
2022
T Tower Gatot Subroto BPD Jabar 24,000 For Lease & Sale
Autograph Tower (within

Thamrin Putra Gaya Wahana 84,267 For Lease
Thamrin Nine Complex)
Luminary Tower (within

Thamrin Putra Gaya Wahana 40,565 For Lease
Thamrin Nine Complex )
St Regis Office Tower Rasuna Said Rajawali Group 40,000 For Lease
Jakarta Office Tower by

Sudirman MORI Building 90,000 For Lease
MORI
continued
Appendix
SGA Marketing
Project Name Location Developer
(sq m) Scheme
continuation
2025
Indonesia-1 North Tower Thamrin Media Group 79,486 For Lease
Indonesia-1 South Tower Thamrin Media Group 72,814 For Sale
Outside the CBD
2022
Sanggala Tower TB Simatupang Sapta Tunggal Mulia 9,900 For Lease & Sale
The Sima TB Simatupang Grage Trimitra Usaha 59,169 For Lease & Sale
One Belpark Office Fatmawati Harmas Jalesveva 17,800 For Lease
Owner Suite by
Dharmawangsa Dharma Tatemono 24,000 For Sale
Dharmawangsa
MTH 27 Office Suite MT Haryono Adhi Karya 25,000 For Lease & Sale
2023
Lippo Tower Holland

Cempaka Putih Lippo Karawaci 27,000 For Sale
Village
Menara Jakarta Office

Kemayoran Agung Sedayu 90,000 For Lease & Sale
Tower
2025
Southgate Office Tower Tanjung Barat Sinarmas Land 30,000 For Lease
5
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
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Quarterly | Apartment | Jakarta | 6 April 2022
Mixed sentiment this year

The multi-family residential market is expected to be flattish over the year given the mixed sentiment in the
market. Rising commodity prices due to the recent Russia-Ukraine conflict should bring a positive impact to
the Indonesian economy and property market.
Supportive macro policies such as a moderately-low mortgage rate environment, LTV relaxation policy and
extension of the VAT reduction on new homes are expected to become catalysts for the property sector.
After more than two years of the pandemic, the government is preparing a road map to endemic status as
the virus wanes. The relatively high vaccination rate, particularly in Jakarta and greater Jakarta, will improve
business conditions in general. Nonetheless, the overall market still expects a higher inflation rate and
mortgage rates which could impede sales.
Developers are likely to continue to focus on the middle to middle-lower segment (ASP < IDR2 billion/unit) as
this segment should benefit most from the supportive macro policies mentioned above.
2022–25
Sales performance was weaker than in Q4

2021 due to several factors. In this quarter,
Demand only 278 units were sold compared to more 87.52% 87.52% 87 – 89%
than 500 units the previous quarter.
One project was completed in Q1 2022 and

brought an additional 521 units. There will
2,218 Units 4,325 Units 6,194 Units
Supply be 4,423 units completed in 2022.
Annual Avg
0.4% 0.53% 4%
No price increments this quarter. However,
Price developers plan to raise prices in Q2 2022.
IDR35.14mio IDR35.14mio IDR41mio
1
New items at the beginning of Wait-and-see during the high
2022 season of Covid-19
In early 2022, Mitsubishi Estate Group Demand showed a downward trend compared
introduced two new projects, including The to Q4 2021. Only 278 units were sold in Q1 2022
Okura Residence, an upscale mixed-use project compared to 516 units in Q4 2021. This situation
which consists of 29 units of strata-title is similar to last year when restrictions were
apartments, and Kizo Residence (joint implemented and the number of cases of covid
development with Sinar Mas), located near Haji rose in Q2 and Q3 which led to a plunge in sales.
Nawi MRT Station. Another project completed in Potential customers are tending to wait and see
the quarter was Vasaka Solterra (first tower). This during the period of a high number of covid
brought an additional 521 units to the market, cases.
and total existing supply to 219,488 units. Some
The average take-up rate reached 87.65%,
other projects are scheduled to be completed
moving upward mildly by 0.13% QOQ or 0.53%
this year, especially in Q2 or Q3, aiming to take
YOY. In addition, as depicted in the graph below,
advantage of the extended VAT reduction
the absorption of under-construction projects
incentive for property under IDR 5 billion, which
has been decreasing, suggesting that sales
will be valid until Q3 2022.
performance of such projects has been
Cumulative supply worsening. In fact, this is because the sales
performance of newly launched projects is
Existing supply Annual supply weaker than before. The benefit of VAT
reduction incentives has only ever been for
250,000
existing units, which shifts the preference to
200,000 buying existing units rather than under-
construction units.
150,000
Units
Take-up rates
100,000
Existing projects
50,000
0 100%
2022E
2023E
2024E
2025E
2016
2017
2018
2019
2020
2021
80%
Source: Colliers Indonesia 60%
From now up to 2025, there will be additional 40%

26,196 units expected to be completed.
20%
However, the number may be higher, with more
project launches anticipated as developers 0%
regain confidence with better economic Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022
projections showing growth between 4.8% and
5.5% by the end of this year.
For the multi-family residential sector, the VAT
reduction incentive seems to have had less
impact in improving sales. As regulations
remained unclear during the first two months of Annual demand
2022, with the rate finally being only half that
25,000
from the original plan, most potential customers
considered investment during this period to be
20,000
too risky.
The outlook also remains uncertain as the 15,000
Units
Ministry of Finance has announced an increase
in the VAT tariff from 10% to 11% starting April 10,000
2022. This also adds confusion because the VAT
regulations (the increase and reduction) 5,000
contradict each other. On the other hand, we still
have a positive view on the apartment market as 0
the recent number of covid cases in Jakarta is
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
expected to ease soon.
Impact of rising commodity prices

Having said this, we are of the view that the
There are three possible impacts of rising overall apartment market this year will still be
commodity price on the Indonesian economy. flattish with demand continuing to be
Firstly, they may boost investment and export underpinned by the middle to middle-low
activities which will encourage GDP recovery. segment (price < IDR2 billion/unit) which targets
Secondly, they may be translated into higher end-users. We expect any commodities rally will
inflation which will discourage people to spend impact the property market from 2023 with the
and thereby reduce consumption. And, lastly, assumptions there are no new covid variant(s)
high inflation may trigger an increase in interest nor any political instability before the 2024
rates. elections. In such cases, there may well be price
increments in Q2 2022.
On balance, we expect rising commodity prices
to be a positive catalyst for the property market
Average property prime lending of 10 banks
12%
10%
8%
6%
4%
2%
0%
Source: tradingeconomics, Colliers Indonesia
Oct-18
Oct-19
Oct-20
Oct-21
Jan-19
Jan-20
Jan-21
Jan-22
Jul-18
Apr-19
Jul-19
Apr-20
Jul-20
Apr-21
Jul-21
However, there is likely to be a time lag of some

2-3 years before this is fully translated into a
Source: OJK, Colliers Indonesia
recovery of property. We believe the time lag will
not be too long for certain buyers, as they will
come from a wider segment, for example those
who benefit from the digital economy (e.g.
Instagram, Tiktok, YouTube, Crypto, NFT, etc) as
well as financial instruments such as equity
market products.
Be prepared for price Serviced Apartment
increment in Q2 2022 Supply
So far, no developers have increased asking No new serviced apartments were completed
prices and the average apartment asking price during the reviewed quarter, thus keeping the
remains stagnant at IDR35.1 million per sq m cumulative supply at 6,221 units. Despite the
(+0.0% QOQ or +0.4% YOY). absence of new supply, one serviced apartment
project was launched during the quarter, namely
Asking prices across regions
The Okura Residences Jakarta, consisting of 181
units, ranging from studios to 2-bedroom unit,
Q1 2021 Q4 2021 Q1 2022 QOQ YOY
and expected to open in 2025. Going forward,
we expect to see the pipeline growing at 6.8%
CBD 52,318,687 52,423,324 52,423,324 0.00% 0.20%
CAGR until 2025, with total stock reaching 8,083
units. The nature of serviced apartments is to
South
Jakarta
39,391,128 39,543,742 39,543,742 0.00% 0.39% cater to middle to upper class occupiers and,
therefore, most of the projects are located in the
Non-
prime 26,616,742 26,776,667 26,776,667 0.00% 0.60%
surrounds of business area such as the CBD and
areas South Jakarta.
Most projects are maintaining existing prices and

Occupancy and rental rates
have not increased prices due to downward The first quarter of a year usually sees a lull in
pressure from the extension of the VAT residential leasing due to low business activities.
incentive. Furthermore, developers prefer to During such period this year, occupancy
increase asking prices in Q2 2022, along with the declined 2.85 percentage points to 58.2% in the
VAT increment to 11%, to make it appear not too quarter. Whilst occupancy rate may have
burdensome for potential customers. dropped due to the effects of seasonality,
leasing demand is expected to increase in
To conclude, we expect there will be slight price
subsequent quarters with the easing of travel
increases, especially for under-construction
through borders, which may lead to more units
projects which are not affected by VAT
being rented.
incentives.
Currently, the government is trying to
implement solutions to be able to live with the
pandemic and transition to the endemic phase.
Even though the number of cases has grown
dramatically due to the Omicron variant, the
number of severe cases and deaths has been
kept to a minimum. In 2021, we saw the
domestic-leisure and local corporate demand
were dominant during the “recovery” process,
whilst business travel have been far behind, so
far. We expect there will be a shift in favour of
business travellers as restrictions normalise,
whilst the pent-up demand seen in leisure travel
subsides, particularly as physical schools open
up. Furthermore, Indonesia has recently
introduced quarantine-free travel from all
international flights with only a PCR test
required after landing in the country.
We are of the view that 2022 will be good Rental rate
opportunity for the recovery of serviced
apartments, although growth may be relatively CBD South Jakarta (incl. Non-prime area)
slow at first, and it may take more time than IDR600,000

expected to fully return to pre-covid levels. IDR500,000
Furthermore, the huge upcoming supply in the
IDR400,000
next three years will keep occupancy rates
under pressure, as competition is getting IDR300,000
tougher. IDR200,000
Hence, rents are expected to remain under IDR100,000

downward pressure as landlords continue IDR0
offering discounts and incentives to boost
2015
2016
2017
2018
2019
2020
2021
2022YTD
flagging occupancy rates. We expect that
average rents will rise in a range of 1% to 3% in
2022.
Occupancy rate
100%
80%
60%
40%
20%
0%
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Appendix
Newly introduced project
Expected
Name of
Location Region Completion Estimated Price/sq m #units
Development
Time
The Okura Jl. Gatot Subroto
CBD 2024 55,652,174 29
Residences Kav 26-27
Kizo Residence Jl. Fatmawati Raya South Jakarta 2025 37,000,000 426
5
Newly finished project
Name of Development Location Region Developer #units
Vasaka Solterra Pejaten South Jakarta Waskita Karya 521
Apartment Name Location Region Developer #Units
2022
PT Itomas Kembangan Perdana

Aerium Taman Permata Taman Permata
West Jakarta (Sinarmas Land & ITOCHU 366
Buana (South Tower) Buana
Indonesia)
Le' Parc Jl. Thamrin CBD PT. Putragaya Wahana 100
The Residences at The Jl. H.R Rasuna

CBD Rajawali Property Group 164
St. Regis Jakarta Said
Fatmawati City Center (2

Fatmawati South Jakarta Agung Sedayu 1240
towers)
The Stature Jakarta Jl. Kebon Sirih Central Jakarta Capitaland and Credo Group 96
Solterra Place (Tower 2) Pejaten South Jakarta Waskita Realty 521
Southgate Residence Jl. Tj Barat Raya,

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

Jl. Daan Mogot West Jakarta PT. Duta Indah Kencana 182
A)
continued
6
continuation
2023
PT Griya Karunia Sejahtera

Pasar Minggu,
The Foresque South Jakarta (Binakarya Propertindo 660
Ragunan
Group)
Menara Jakarta (Tower Central
Kemayoran Agung Sedayu 396
Equinox) Jakarta
Menara Jakarta (Tower Central

Kemayoran Agung Sedayu 860
Azure) Jakarta
Tomang Park Apartment Jl. Tawakal Ujung

West Jakarta PT Phoenix Property 2000
(2 towers) Raya, Tomang
Sakura Garden City Jl. Bina Marga PT Trivo Group and Daiwa
East Jakarta 2200
(phase 1) No.88 House
Dharma Tower Jl. Dharmawangsa PT Dharma Tatemono

South Jakarta 72
Apartment VII Property
57 Promenade Jl. Kebon Melati CBD Intiland 496
Jl. Sinabung Raya

The Padmayana South Jakarta Adhi Karya 145
No.58
Cleon Park Apartment (2 Cakung, Jakarta

East Jakarta Modern Land Realty 630
towers) Garden City
South Quarter Residence TB Simatupang South Jakarta Intiland 336
Arumaya Residence TB Simatupang South Jakarta Astra Land 262
Jl. D.I. Pandjaitan,

Tamansari Sky Hive East Jakarta Wika Realty 570
Kav.49
LRT City Ciracas - Urban Jl. Pengantin Ali,

East Jakarta Adhi Karya 1087
Signature Ciracas
Jl. Yos Sudarso, No

Norrington Suites North Jakarta PT Tri Raton Mega 286
76
Sentra Timur Residence

Pulo Gebang East Jakarta Bakrieland Development 500
(Jade Tower)
continued
7
continued
The Newton 2 at Ciputra

Jl. Karet Sawah CBD Ciputra 624
World 2
Jl. Karang Indah,

Apple Residence 3 South Jakarta PT Diamond Land Development 530
Lebak Bulus
2024
Antasari Place (was 45

Antasari South Jakarta Prospek Duta Sukses 1924
Antasari) (2 Tower)
Synthesis Residence Jl. Ampera Raya

South Jakarta PT. Synthesis Development 1100
Kemang (3 towers) No.17
Branz Mega Kuningan Mega Kuningan CBD Tokyuland 480
The Premiere MT
Haryono - LRT City MT Jl. MT Haryono East Jakarta Adhi Karya 390
Haryono
Citra Landmark (Tower
Jl. Ciracas East Jakarta Ciputra 600
1)
Jakarta Setiabudi International &

Savyavasa (3 Towers) Jl. Wijaya II South Jakarta 600
Swire Properties
Tamansari Equine
Jl. Pulomas Jaya East Jakarta Wika Realty 441
(Tower 1)
South Quarter Residence

TB Simatupang South Jakarta Intiland 336
(Tower 2)
Jl. Daan Mogot

B Residence Grogol West Jakarta MGM Propertindo 252
79
Apple Residence 5 Pejaten Barat South Jakarta PT Diamond Land Development 400
Terrace Diamond Mega Kuningan CBD China Railway Group Limited 268
Jl. Gatot Subroto Mitsubishi Estate Group, Duta

The Okura Residences CBD 29
Kav 26 - 27 Putra Land, Rizki Bukit Abadi
continuation
8
continued
2025
Pluit Residences (was

Pluit Seaview) (Tower Pluit North Jakarta Binakarya Propertindo Group 500
Ibiza)
Pluit Seaview (Tower
Pluit North Jakarta Binakarya Propertindo Group 650
Bahama)
Kebayoran Apartment
(was Selatan 8) Jl. Raya Ulujami South Jakarta Karya Cipta Group 344
(Diamond Tower)
Jl. Kesehatan
Kasamara Residence South Jakarta PT MGM Propertindo 150
Raya
Jl. Mega
Pollux Sky Suites Kuningan Barat CBD Pollux Propety 216
III
Jl. Duren Tiga JV Farpoint Realty &
Loggia Apartment South Jakarta 254
Raya, Pancoran Tokyotatemono
Jl. Benyamin
Central
Alonia Kemayoran Sueb Perumnas 209
Jakarta
Kemayoran
Jl. Fatmawati
CORE Cipete South Jakarta Jaya Properti 190
Raya
The Veranda @ Lebak

Lebak Bulus South Jakarta Pulau Intan & Nishitetsu 360
Bulus (2 Towers)
Sinar Mas Land, Mitsubishi Estate

Kizo Residence Jl. Fatmawati Raya South Jakarta 426
Group
The Veranda @ Lebak

Lebak Bulus South Jakarta Pulau Intan & Nishitetsu 360
Bulus (2 Towers)
9
New pipeline for Serviced Apartment
Name of Development Location Region #units
2022
Somerset Kencana Jakarta Pondok Indah South Jakarta 148
Citadines Sudirman Jl. Karet CBD 253
Fraser Suites Kebon Melati Kebon Melati, Tanah Abang CBD 140
Citadines Gatot Subroto Jl. Gatot Subroto CBD 102
Pan Pacific Serviced Suites Jakarta Thamrin CBD 179
Ascott Menteng Jakarta Menteng CBD 151
2023
PARKROYAL Serviced Suites Thamrin CBD 180
Citadines Kemang Kemang South Jakarta 180
Somerset Mega Kuningan Jakarta Mega Kuningan CBD 168
2025
The Okura Residences Gatot Subroto CBD 181
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
About Colliers
Legal Disclaimer
Quarterly | Retail | Jakarta & Greater Jakarta |
6 April 2022
2022 will be the year for retail to be

reset

2022 is set to be an interesting year for retail as the sector looks to shake off the challenges of the last two
years and is likely to be a year of fast-moving innovation defining future shopping experiences.
The retail construction pipeline will remain constrained, allowing space absorption to improve, even though
landlords remain flexible and in accommodative mode in dealing with tenants. On the other hand, in today’s
uncertain atmosphere, there is still room for tenants to achieve profits and, especially, set fixed occupancy
costs for the longer term.
The future of the shopping mall is changing in view of a shift in consumer behaviour and needs. Factors such
as customer experience, brand loyalty and the need to encourage post-pandemic footfall will be crucial.
Retailers need to think about their physical and online presence as one. They should also consider inviting
shoppers to actively participate in and be part of brand experiences by using social media.
Open-air shopping centres are expected to be the most in-demand mall concept in 2022.
2022–25
Q1 2022 Full Year 2022 Annual Avg
Foreign brands, especially F&B retailers, still see
Indonesia as a potential destination, especially in
middle-upper class malls. Large-format outlets
Demand are still dominated by fashion retailers and 12,347 sq m 119,156 sq m 134,143 sq m
retailers related to lifestyle, including household
appliances and electronics, are expected to
continue to expand.
There have been no newly announced projects,
leaving the market to respond to the completion
of current under-construction projects. The 15,60 sq m 88,600 sq m 116,240 sq m
Supply
cumulative supply is expected to grow 1.4% per
year between 2022-2025.
Annual Avg
Supported by several potential factors, including 0% 1.3% 2.6%
the operation of new malls, the average rent is
expected to grow about 3.0% per year between
Rent IDR475,108 IDR481,274 IDR525,872
2022-2025.
The limited amount of additional retail spaces will 0.52 (1.71) 3.60
be overtaken by absorption. As result, vacancy
rates are likely be in a downward trend of almost
Vacancy 30% 28.3% 25.9%
1% per year between 2022-2025.
Landlords still get different reactions from

0% 3.6% 4%
tenants regarding service charges. But, overall, it
Service is estimated that service charges will grow 3%-4%
Charge IDR132,880 IDR137,612 IDR155,444
per year between 2022-2025.
Source: Colliers Indonesia. Note: IDR 14,416 = USD 1.00 1
Retail construction pipeline is likely to grow by less than 1% during 2022-
2025.
will remain modest Paradise Walk Serpong added new retail space in
Annual supply the greater Jakarta area of some 2.89 million sq
m in Q1 2022. Furthermore, the greater Jakarta
Jakarta Greater Jakarta area continues to grow as a residential area. The
200,000 impact of this is the need for more
entertainment and leisure facilities, including
160,000
malls, especially lifestyle concept malls. Following
120,000 Paradise Walk Serpong, Embarcadero Bintaro is
expected to be completed shortly.
80,000
Both of these lifestyle malls are located in
40,000
Tangerang. However, several large mall projects
0 are also currently under, or will soon start,
construction. We expect the cumulative supply in
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
Q1 2022
the greater Jakarta area to increase by two times

that in Jakarta central and grow about 2.5% per
year during 2022-2025.
Cumulative supply
More shoppers and tenants
Jakarta Greater Jakarta
5,500,000
return aiding mall recovery
4,400,000 Occupancy
3,300,000 Jakarta Greater Jakarta

100%
2,200,000
90%
1,100,000
80%
0
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
Q1 2022
70%
60%
Source: Colliers Indonesia 50%

2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
Q1 2022
The pandemic has impacted project completion

in both in Jakarta and the greater Jakarta area.
This is illustrated by the limited additional retail Source: Colliers Indonesia
supply, especially in Jakarta. It is estimated only
two new shopping centres will be completed Occupancy is currently stagnant and, with the
before 2023. With no new malls operating, the further addition of new malls, the average
cumulative retail supply is fixed at 4.89 million sq occupancy in Jakarta central and greater Jakarta
m, and this is likely to continue until mid-2022. will still be under pressure. However, as more
pandemic related restrictions are lifted, foot
There has been no news about newly launched
traffic at retail centres is expected to increase in
projects in Q1 2022 and, therefore, the
2022.
cumulative supply in Jakarta will not change and
In Jakarta, the average occupancy rate was 70% Nothing changed yet for
over the last six months. The prolonged
pandemic has caused the average occupancy occupancy cost, but Incentives
rate to drop by about 10% compared to 2019.
However, the Indonesian Shopping Centre
start softening
Management Association (APPBI) expects
Average rent
shopping centre business to return to normal
starting in the second half of 2022. This
Jakarta Greater Jakarta
confidence is based on a high vaccination rate,
more controllable health protocols and IDR750,000
improving economic forecasts.
IDR600,000
Furthermore, many tenants are looking forward
IDR450,000
to starting business again due to an increasing
trend of visitation to shopping centres. This IDR300,000
optimistic situation makes retailers confident to IDR150,000
expand and open/re-open their stores. Uniqlo
IDR0
will open its 47th branch in Indonesia at Ciputra
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
Q1 2022
Mall Jakarta. After leaving Taman Anggrek Mall
approximately four years ago, Matahari
Department Store will re-open at the same mall.
In the greater Jakarta area, the average
occupancy rate was still below 70% over the last
six months. A slowing recovery has extended favourable
market conditions for tenants and continued to
However, market conditions are expected to make landlords more flexible in dealing with
improve, as tenants become more confident to tenants. Various offers are being made to attract
open stores. With more tenants committed to tenants, such as utilising and providing existing
open, the aggregate retail absorption will be facilities at outlets abandoned by previous
much better in 2022. As a result, the average tenants and which can be directly used by
occupancy rate is likely to be about 72% at the prospective new tenants to minimise fit-out
end of 2022, an increase of almost 2% compared costs. In addition, there are several landlords
to 2021. who are initially offering shorter rental periods of
In the months ahead, religious festivals under three years. Nevertheless, this shorter
(Ramadan and Eid al-Fitr) are expected to period must be carefully considered by
increasingly stimulate the retail market. More prospective new tenants in order to ensure that,
stores are expected to open, even if only pop-up within such period of time, they can pass their
or temporary stores. If the market responds business break-even point.
positively and the confidence of retailers Landlords continue to focus on increasing
increases, it is possible that tenants will extend occupancy and prefer to maintain the same
their lease terms or even open permanent stores. rental rates in the current uncertain situation. As
In turn, this will boost the average occupancy at Q1 2022, the average rent was IDR566,095 in
rate. Jakarta central, and IDR384,121 in greater
We expect retail space absorption in 2022 to be Jakarta. Both have been relatively stagnant over
much better when compared to the last five the last 12 months.
years. However, new supply may bring the Nevertheless, there is still opportunity for
average occupancy rate, both in Jakarta and landlords to increase rentals in view of improved
greater Jakarta, to grow moderately in 2022-2023. confidence levels reflected by several
transactions which have happened over the past
three months. In addition, some malls which are likely to be affected by projected increases in
maintained higher occupancy rates are likely to minimum wages and inflation.
consider setting new rental rates in 2022.
Changes in service charges will depend on the Average service charge
operation of new malls, although some landlords
are considering increasing service charges which Jakarta Greater Jakarta
have been unchanged for two years during the IDR200,000
pandemic. In Jakarta, the average service charge
was IDR149,166 and it was IDR116,594 in greater IDR150,000
Jakarta.
IDR100,000
Several factors have led to optimism that the
retail market will rebound in 2022. Absorption of IDR50,000
space will show growth, and rental and service
charges are also expected to improve. IDR0
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
Q1 2022
Nevertheless, it is expected that landlords
wishing to increase rentals will be restrained by
the market and it is expected that such rates will
only grow moderately in 2022. Service charges Source: Colliers Indonesia
Appendix
Shopping Centre NLA

Location Region Developer
Project (sq m)
Jakarta
2022
Lippo Mall East Side Cempaka

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

Kemayoran Central Jakarta Agung Sedayu Permai 90,360
Mall
continued
Shopping Centre NLA
Location Region Developer
Project (sq m)
continuation
Greater Jakarta
2022
Grand Dhika City Mall Bekasi Bekasi Adhi Persada Property 24,000
Embarcadero Lifestyle
Bintaro Tangerang Lippo Karawaci Tbk 5,000
Mall
2023
Bintaro x'Change 2 Bintaro Tangerang Bintaro Jaya 51,000
Pakuwon Mall Bekasi Bekasi Bekasi Pakuwon Group 40,000
2024
Aeon Mall Deltamas Cikarang Bekasi AEON & Deltamas 90,000
Metrostater Depok Margonda Depok Andyka Investa (Trivo Group) 30,000
5
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
Legal Disclaimer
Quarterly | Hotel | Jakarta | 6 April 2022
A favourable performance last quarter

is likely to carry on

The hospitality industry has witnessed a healthy growth in the occupancy rate of hotels since
December 2021. The base line of improving conditions has been the government's easing of
restrictions and an acceleration in economic activity. In addition, the government has also
loosened rules on domestic and foreign travel.
We foresee a slower pace of business approaching the upcoming Eid holidays. However, given a
more positive outlook in the economy and the easing of pandemic curbs, the hospitality industry
should regain strength. Hoteliers also need to optimize non-room revenue such as F&B.
2022–25
Supply growth has been moderate and this

413 rooms
is a positive sign for the hotel market to 0 rooms 500 rooms
Supply consolidate its performance.
Annual Avg.
The occupancy rate started to improve with
the loosening of regulations related to travel. 8.9% 11.9%
Occupancy Should this relaxation of regulations remain
2.5%
in place and the spread of the virus is
59.2% 62.2%
contained, the occupancy level is projected
to rise.
In line with improving room occupancy, the 14.8% 20.9%

trend in ARR is most likely to move upward 3.7%
Room rates moderately. USD54.6 USD57.5
1
Supply Performance
We have not witnessed a new hotel project this Occupancy might drop in April but will recover
year, with total supply remaining at 44,602 afterwards
rooms in 223 hotels. Several hotel projects
already in the pipeline are scheduled to operate
2019 2020 2021 2022
in Jakarta this year and next. Some of these 100%
projects were in the under-construction stage
prior to the pandemic. 80%
60%
Cumulative hotel projects
40%
3-star 4-star 5-star
120
20%
100
0%
80
Aug
Jan
Feb
Dec
Nov
Jun
Jul
Oct
Sep
Mar
Apr
May
60
Source: STR
40
20
Hotel room rates trend downwards during Q1
0
2022
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
2025E
Q1 2022
2019 2020 2021 2022
Source: Colliers Indonesia USD100.00
Cumulative hotel rooms USD80.00
USD60.00
3-star 4-star 5-star
20,000
USD40.00
16,000
USD20.00
12,000
USD0.00
8,000
Aug
Jan
Feb
Dec
Nov
Jun
Jul
Oct
Sep
Mar
Apr
May
4,000
Source: STR
0
2016
2017
2018
2019
2020
2021
2022E
2023E
2024E
2025E
Q1 2022

The Covid pandemic has changed the overall In early 2022, the occupancy rate was relatively
pattern of hotel performance. Prior to 2020, high. In January 2022, it was recorded at 60.6%,
occupancy volatility was more predictable higher by about 14.8% compared to the same
because the market was subject to an expected period last year. In February, it dropped to
up-and-down cycle throughout the year. It is now 51.1%, but despite being lower month-on-month,
almost certain that occupancy declines when the it was still quite high compared to the same
government enforces restrictions on community period last year. The occupancy numbers have
activities, and we hope this situation eases going signaled a recovery in the hospitality industry,
forward. despite it still being early in the year to form
conclusions. Nonetheless, we have seen hotel
Business activities are almost back to normal.
activities not only involving corporations and
The monthly occupancy rate in 2021 reached an
governments, but also weddings and other MICE
average of 40%, plunging quite substantially,
activities.
particularly when the government increased the
level of PPKM (public restrictions). When the At the approach of Ramadhan and the Eid
government eased restrictions (primarily holidays in early May, the hotel market is
regulations related to travel) at the end of 2021, anticipating a decline in business. If going home
the monthly occupancy rate rose quite is still allowed, it is possible occupancy will
significantly. The government easing was also improve again in the third quarter.
reflected in the number of foreign tourist arrivals
Despite improved occupancy, hoteliers are still
through Soekarno-Hatta airport, which have
struggling on the revenue side. The pandemic
increased since October 2021.
has hit the income of most hoteliers, as they
have had to maintain operations on reduced
The number of foreign tourists arrival to
revenues. Despite still being relatively low, the
Indonesia through Soekarno-Hatta
current ADR is already higher than in 2020. In
International Airport by month
January this year, the ADR was recorded at
US$56.32, up 25.2% compared to the same
2018 2019 2020 2021
period last year. In February, it fell slightly to
350,000
US$52.32, but was still up 20% compared to the
300,000 same period last year.
250,000
200,000
150,000
100,000
50,000
0
Aug
Jan
Feb
Dec
Nov
Jun
Jul
Sept
Oct
Mar
Apr
May
Source: Central Bureau of Statistics
3
Appendix
STR
Opening
Hotel Name Equivalent Location Region #Rooms
Time
Rate
4-star
Park Regis Menteng Upper midscale Raden Saleh Central Jakarta 180 2023
5-star
St Regis Luxury HR Rasuna Said CBD 280 2022
Park Hyatt Hotel Luxury Kebon Sirih Central Jakarta 220 2022
Waldorf Astoria Luxury Thamrin CBD 183 2023
4
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
About Colliers
Legal Disclaimer

Q1 2022 ColliersQuarterly Jakarta

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Quarterly | Office | Jakarta | 6 April 2022

Market upturn is underway, but

Insights & recommendations

Cumulative supply is expected to grow 2% per

There is a likelihood of stronger demand this year 2.70% 0.84% 3.27%

0.36 1.61 0.67

Selling prices look to be stable with minimal 0.6% 0.76% 1.01%

projection, 2022 will remain a CBD Outside the CBD

tough period 8,000,000

Annual supply 4,800,000

CBD Outside the CBD 3,200,000

around 200,000 sq m of new supply in the

45 constantly adjusted over the past two years.

Source: Colliers Indonesia

Autograph Tower (within

Luminary Tower (within

Jakarta Office Tower by

Indonesia-1 North Tower Thamrin Media Group 79,486 For Lease

Indonesia-1 South Tower Thamrin Media Group 72,814 For Sale

Outside the CBD

One Belpark Office Fatmawati Harmas Jalesveva 17,800 For Lease

Lippo Tower Holland

Menara Jakarta Office

Source: Colliers Indonesia

Mixed sentiment this year

Insights & recommendations

Sales performance was weaker than in Q4

One project was completed in Q1 2022 and

Source: Colliers Indonesia. Note: IDR 14,416 = USD 1.00

Source: Colliers Indonesia 60%

From now up to 2025, there will be additional 40%

Impact of rising commodity prices

However, there is likely to be a time lag of some

Most projects are maintaining existing prices and

slow at first, and it may take more time than IDR600,000

Hence, rents are expected to remain under IDR100,000

Source: Colliers Indonesia

Source: Colliers Indonesia

Name of Development Location Region Developer #units

Vasaka Solterra Pejaten South Jakarta Waskita Karya 521

Source: Colliers Indonesia

Under construction projects

Apartment Name Location Region Developer #Units

PT Itomas Kembangan Perdana

Le' Parc Jl. Thamrin CBD PT. Putragaya Wahana 100

The Residences at The Jl. H.R Rasuna

Fatmawati City Center (2

Solterra Place (Tower 2) Pejaten South Jakarta Waskita Realty 521

Southgate Residence Jl. Tj Barat Raya,

Vittoria Residence (tower

PT Griya Karunia Sejahtera

Menara Jakarta (Tower Central

Tomang Park Apartment Jl. Tawakal Ujung

Dharma Tower Jl. Dharmawangsa PT Dharma Tatemono

57 Promenade Jl. Kebon Melati CBD Intiland 496

Jl. Sinabung Raya

Cleon Park Apartment (2 Cakung, Jakarta

South Quarter Residence TB Simatupang South Jakarta Intiland 336

Arumaya Residence TB Simatupang South Jakarta Astra Land 262

Jl. D.I. Pandjaitan,

LRT City Ciracas - Urban Jl. Pengantin Ali,

Jl. Yos Sudarso, No

Sentra Timur Residence

The Newton 2 at Ciputra