Real Estate Market Update

H2 2022 and Opportunities

In 2023
Tuesday, December 13, 2022 | 3pm - finish
Today’s Speakers

Keynote Steve Atherton Monica Koesnovagril Ferry Salanto Bagus Adikusumo

Michael D. Broomell Head of Capital Head of Advisory Head of Research Head of Office Services
Managing Director Markets & Investment Services
Services

Sander Halsema Rivan Munansa Lenny van Es-Sinaga Satria Wei

Head of Retail Services Head of Industrial & Head of Residential Head of Hospitality
Logistics Services Services Services

Real Estate Market Update H2 2022 and Opportunities In 2023

Investment
Market
Steve Atherton
Head of Capital Markets &
Investment Services

Monica Koesnovagril
Head of Advisory Services
Global Inflation and Interest Rate Trend
Inflation Rate – Selected Countries Central Bank Interest Rate – Selected Countries

14.00% 6.00%

12.00%
5.00%

10.00%

4.00%
8.00%

6.00% 3.00%

4.00%
2.00%

2.00%

1.00%
0.00%

-2.00% 0.00%
Jan-20

Jan-21

Jan-22
Mar-20

Jul-20

Mar-21

Jul-21

Mar-22

Jul-22
May-20

Sep-20

May-21

Sep-21

May-22

Sep-22
Nov-20

Nov-21

Nov-22

Jan-20

Jan-21

Jan-22
Mar-20

Jul-20

Mar-21

Jul-21

Mar-22

Jul-22
May-20

Sep-20

May-21

Sep-21

May-22

Sep-22
Nov-20

Nov-21

Nov-22
-1.00%
Indonesia US Europe EU Indonesia US EU

Source: Various Sources Source: Various Sources

 0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20
US Situation

Aug-20

US New Home Sales (RHS)

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21

Feb-21

Mar-21

Apr-21

May-21

US Existing Home Sales (RHS) Jun-21

Jul-21

Aug-21

Sep-21

Oct-21

Nov-21

Dec-21

Jan-22

Feb-22
30-Year Mortgage Rate (LHS)

Mar-22

Apr-22

May-22

Jun-22

Jul-22

Aug-22

Sep-22
Fed Fund Rate (LHS)

Oct-22

Nov-22
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00

Source: Various Sources

in million units
Indonesia: Listed Developers Performance

Q3 2022 Marketing Sales Achievements (IDR bn) Aggregate Developer Marketing Sales (IDR bn)

3,000
2,559
2,500
2,046
2,000
1,533 1,461
1,500
1,178

1,000
612 585 549
500 369
185

-
Summarecon Pakuwon Alam Sutera Bumi Serpong Ciputra
Damai

Q3 2021 Q3 2022

Source: Companies Source: BRI Danareksa Sekuritas

Foreign Direct Investment (FDI)
Foreign Direct Investment – Big 7

FY2021 9M2022

Country Amount (USD mn) Country Amount (USD mn)

Singapore 5,338.52 Singapore 4370.19

China 5,075.63 China 2520.26

Hongkong 3,117.56 Hongkong 1510.88

Thailand 2,077.28 South Korea 1365.32

Japan 1,959.7 Japan 1198.02

US 1,481.29 US 1193.49

Source: Bank Indonesia

Indonesia’s outlook
towards the property investment climate in 2023
• Landed residential is safest
asset class by far.
• Logistics and data centers
remain on growth trend.
• Buyers market for land, office
and apartments.
• Niche markets like Bali villa
development show some potential.
• Pricing of most existing hotel or retail
assets for-sale remains above buyer
targets.
• Build to core hotel or serviced
apartment strategy possible.
Opportunities in 2023
In an effort to increase revenue, improved asset utilization could be a
solution – especially for Government assets.

Distressed asset could also become investment opportunities.

For individual end-users, 2023 will be excellent opportunity to buy

affordable apartments.

Commercial & apartment developers/owners: Find new partners

that can co-invest and/or operate assets that are under-utilized or
under-performed.

Local & foreign investors: Great opportunities to buy strategic land at

reasonable prices.
Indonesia Property Market is flustered
by these factors

Inflation and Interest rates Unstable

VAT geopolitics
High Inflation is triggered off by energy cost
Inflation Rate in Indonesia Inflation for each type of expenditure
2022 (YTD)
10% 16%
9% Triggered off by 14%
8% BBM price hike 12%
7%
Inflation Rate

Inflation Rate
10%
6%
5% 8%
4% 6%
3%
4%
2%
1% 2%

0% 0%

Information, communication…
Healthcare

Sports & recreation

Household

Education

Food & beverage/restaurant

Other private services

Clothing
Food & beverage (raw material)

Housing & utilities

Transportation
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Nov 2022 (YTD)

-2%

Period

Impact:
• Lower individual property purchasing power
Type of Expenditure
• Higher development cost for developer

Source: BPS Indonesia

Higher VAT means higher property cost
Based on UU No. 7/2021: VAT is increased from 10% to 11%

Impact:

For customer: For developer and investor:

• Higher cost in buying • Higher development cost
property
• Higher cost in buying property
• For landed house – the
cost will be much higher
especially with the end of
VAT incentive for housing
(PMK No. 6/2022) in
September 2022

1,2,3,4 Data by CNBC Indonesia

 Interest Rate

•
•
0%
1%
2%
3%
4%
5%
6%
7%

Impact:
21-Apr-16
21-Jun-16
21-Aug-16
21-Oct-16
21-Dec-16
21-Feb-17
21-Apr-17
21-Jun-17
21-Aug-17
21-Oct-17

Higher development cost for developer

21-Dec-17
21-Feb-18
21-Apr-18
21-Jun-18
21-Aug-18
increase in loan interest rate

21-Oct-18
21-Dec-18
21-Feb-19
21-Apr-19
Higher property buying cost for individual buyer – with KPR, KPA or KPG

21-Jun-19
21-Aug-19
21-Oct-19
BI 7-Day Repo Rate

21-Dec-19
21-Feb-20
21-Apr-20
21-Jun-20
21-Aug-20
21-Oct-20
21-Dec-20
21-Feb-21
21-Apr-21
21-Jun-21
An increase in BI 7-Day Repo Rate will be followed by an

21-Aug-21
21-Oct-21
21-Dec-21
21-Feb-22
21-Apr-22
21-Jun-22
21-Aug-22
21-Oct-22
Source: Bank Indonesia
 UMP (in IDR)

-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Aceh

North Sumatera

West Sumatera

Riau

Jambi

South Sumatera

Bengkulu

Lampung

Bangka-Belitung

Riau Islands

Jakarta

West Java

Central Java

Yogyakarta

East Java
Province Banten
UMP - 2023

Bali

West Nusa Tenggara

have their operations in those provinces

East Nusa Tenggara

West Kalimantan

Central Kalimantan

South Kalimantan

East Kalimantan

North Kalimantan

North Sulawesi

Central Sulawesi

South Sulawesi

Southeast Sulawesi

Gorontalo
With lower UMP in most provinces in Java (except Jakarta and

West Sulawesi
Banten), labor-intensive manufacturing will be more efficient to

Maluku

North Maluku
Source: compiled from several resources

Papua
Interest in investment in Indonesia is still high. Albeit political issues
and the global economic recession
Domestic Investment
500,000 250,000
Investment (Rp Billion)

400,000 200,000
300,000 150,000

Project
200,000 100,000
100,000 50,000
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3Q 2022

Domestic Investment (Rp Billion) Project

Foreign Investment
40,000 80,000
US$ Million

30,000 60,000

Project
20,000 40,000

10,000 20,000

0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3Q 2022

Foreign Investment (US$ million) Project

Source: BKPM
Investment in property sectors was 12% for domestic investment
and 7% in foreign investment (2022 YTD)
Domestic Investment (Value) Foreign Investment (Value)

Transportation,
Chemical and Others Warehouse, and Metal, except
17% Telecommunication Others
Pharmaceutical Machinery and
15% Food Crops, 23%
Industry Equipment
Plantations, and
5% 25%
Livestock
Mining 4%
Electricity, Gas 11%
and Water
6%

Mining
Construction Food Industry 10%
5% 6%
Housing,
Industrial Estate,
and Office
Trade and Building Electricity, Gas,
Reparation 12% and Water
6% Supply
Other Services 9% Housing,
Food Industry Transportation,
7% Food Crops, Chemical and Industrial Estate,
9% Warehouse, and
Plantations, and Pharmaceutical and Office
Livestock Telecommunication
Industry Building
7% 8%
8% 7%

Source: BKPM
Potential alternative sectors

• Healthcare
• Senior housing
• Student housing
• Education
• Cold storage
• Fulfilment centres
Office
Market
Ferry Salanto
Head of Research

Bagus Adikusumo
Head of Office Services
 Office Market Remains Challenging for Landlords
Average Occupancy Rates CBD - Annual Supply & Demand (in sq m)
100% 600,000
95%
400,000
90%
85% 200,000
80%
75% 0
70% 2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E
-200,000
65%
60% Annual Supply Annual Demand

55%
50%
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E Outside CBD - Annual Supply & Demand (in sq m)
300,000
CBD Outside CBD

200,000

100,000
• The occupancy rate in the CBD is 75.1%, and outside the CBD: 75.7%.
• There have been several leads & inquiries coming in for expansion or relocation. 0
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E
• Given the high supply, the occupancy rate will continue to decline until 2023. -100,000
• The occupancy will improve in 2024-2025. Annual Supply Annual Demand
• The renewable energy sector remains resilient and will propel office market.
 Supply Pipeline Remains High in 2023
Annual Supply (in sq m)
600,000

500,000

400,000

300,000

200,000

100,000

0
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E

CBD Outside CBD

• No new building operates during Q3.

• Total supply is 7 million sq m (CBD) and 3.7 million sq m (outside CBD).
• Several projects experienced a setback in the completion schedule from 2022 to the next year.
• Supply will continue to grow until 2023 and will slow down in 2024.
The Tenant’s Market Condition Pushed Rents Down
Average Selling Price (/sq m) of Strata-title Building Average Asking Base Rent (/sq m/month)
IDR 70,000,000 IDR350,000
IDR300,000
IDR 60,000,000
IDR250,000

IDR 50,000,000 IDR200,000

IDR150,000
IDR 40,000,000 IDR100,000
IDR50,000
IDR 30,000,000
IDR0

2022E

2023E

2024E

2025E
2016

2017

2018

2019

2020

2021
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E

CBD Outside CBD CBD Outside CBD

Rents in Different Regions in Jakarta

IDR 600,000 • Rental rate in the CBD: IDR 234,342 and outside the CBD: IDR 176,711.
IDR 500,000
IDR 400,000 • Rents in Premium and Grade A buildings tend to be stable.
IDR 300,000
IDR 200,000 • The tenants’ market forces landlords to be accommodating and flexible.
IDR 100,000
IDR 0 • Flexible/co-working space will survive with a revenue-sharing/joint
venture scheme.
Gatot Subroto

Satrio

North Jakarta
South Jakarta

East Jakarta
Kuningan

West Jakarta
Sudirman
Thamrin

Rasuna Said

Central
Jakarta
Mega

• The overall rents will increase mainly because of the influx of many
premium buildings.
Possibility of Global recession
Some companies prefer to stay
Many companies are
in their current location and
becoming more cautious
reduce and reconfigure space.
when planning to relocate
and improve their facility.
Opportunities in 2023
ESG and Green Building
More companies consider relocating to a
certified green building.

This requirement comes mostly from

multinational companies.

Green building application may help

secure new leases.
Opportunities in 2023
Office activities based on number of mobile phone users
Jakarta CBD Office Area

100%
Many multinational companies will continue to
implement the hybrid working system.
74%

Demand for office space: limited.

45%
Developers: need to remain flexible and
29%
accommodative.

Tenants: provide opportunities to lease and achieve

a competitive market rental rate.
2019 Average 2020 Average 2021 Average Oct-22
Monthly Monthly Monthly
Data per October 2022. By PT Locator Logic Solutions
Opportunities in 2023
Demand for offices where occupants will commute less

In Europe (source: irei.com) In Indonesia (Colliers Point of View)

of employees prefer Satellite Proper office buildings are
60% remote work or hybrid
system. offices
not common in Jakarta’s
suburbs.

of the workforce willing to There may be a possibility

79% work from office within 10
mins from home.
Opportunity that satellite offices will be
a trend in the future.

Satellite as a solution for countries

where suburban areas are
offices quite spread out.
Retail
Market
Ferry Salanto
Head of Research

Sander Halsema
Head of Retail Services
 The Moderate Supply Addition Has Helped Stabilize
Retail Market
Annual Supply of Retail Space (sq m)
250,000

200,000

150,000

100,000

50,000

0
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E

Jakarta Greater Jakarta Area

• No additional supply Jakarta and greater area.

• Total supply remains 4.9 million sq m in Jakarta and 2.9 million sq m in Bodetabek.
• Total supply in Jakarta is estimated to reach 5 million sq m if the two new ongoing mall projects are completed.
 Retail Market is on the Way to Recovery
Vacant Spaces & Occupancy Occupancy by Mall Classes & Area
1,200,000 100%
100%
1,000,000 80% 90%
800,000 80%
60%
600,000 70%
40% 60%
400,000
50%
200,000 20%
40%

Middle Upper

Middle

Tangerang

Bekasi
Premium

Depok
Middle Lower

Bogor
0 0%
2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E

Vacant Space (Jakarta) Vacant Space (Greater Jakarta Area)

Occupancy (Jakarta) Occupancy (Greater Jakarta Area)

• The mandatory booster vaccine has had a significant impact, as seen from the decrease in the number of mall visits.
• The occupancy rate in Jakarta and Bodetabek is currently below 70%.
• Businesses that previously focused only on shophouses are starting to expand into malls, especially the F&B sector.
• The tenants of the fashion sports sector are still expanding.
• New supply will continue to put pressure on the occupancy rate, at least until 2023.
• The F&B sector is still attracting visitors.
 Rent will increase in 2023 by at Least a Similar to the Inflation Rate
Asking Base Rent Average Asking Base Rent by Classes • Rents have not
800,000 (in Jakarta) & by Area (outside Jakarta) changed and stay at
600,000 1,200,000 IDR566,095 (Jakarta) and
400,000
1,000,000
800,000
IDR384,121 (greater
600,000 Jakarta).
200,000 400,000
200,000
0 0 • Maintenance costs
hover at IDR148,971

Bekasi
Premium

Middle
Middle Upper

Middle Lower

Tangerang
Depok
Bogor
2022E

2023E

2024E

2025E
2016

2017

2018

2019

2020

2021
(Jakarta) and IDR117,812
Jakarta Greater Jakarta Area
(greater Jakarta) since
2021.
• Rent will still be
Service Charge Average Service Charge by Classes relatively stable, but
200,000
(in Jakarta) & by Area (outside Jakarta) maintenance costs may
150,000 250,000 start to be adjusted in
200,000
2023.
100,000 150,000
100,000
50,000 50,000
• The increases on
0 minimum regional
0
wages, interest rate and

Bekasi
Premium

Middle
Middle Upper

Middle Lower

Tangerang
Depok
Bogor
2022E

2023E

2024E

2025E
2016

2017

2018

2019

2020

2021

inflation will trigger

the adjustment in the
Jakarta Greater Jakarta Area
maintenance costs.
H1 2022

Colliers saw positivity

returning in the retail market.
H2 2022

Expect an increase in F&B continued to be the Strong foreign retail

both the rental rates and main driver of leasing brands opened outlets
service charges starting in demand. in Jakarta, Surabaya,
H1 2023. Yogyakarta, and Medan.
Shopping Malls
The middle-upper and The middle and
upper segments: middle-lower
performing very well in segment: continued to
terms of sales and struggle to recover from
traffic. the covid era.

Expansion: more risk New market entrants

averse approach from with fresh new concept
retailers in the middle- and creative fit out can
low segment. help boost the overall
tenancy mix.
Retail in the Office Building
Improvement: more retail
space being occupied.
Higher-end F&B businesses
involving fresh food and
cooking found difficulties
to run a profitable business
at an office location.
Most retailers opening at
office locations are the
convenience stores, drug
stores and QSR brands.
Office landlords could
consider to be a bit more
flexible towards higher-end
F&B businesses in terms of
rent.
E-commerce slows down, but still
higher compared to pre-covid levels

Although e-commerce sales are still

above pre-pandemic levels, 2022 has
shown that the covid-era did not
decrease consumers appetite to go to
shopping malls.
Consumer confidence concern
for many retailers

The main driver for Uncertainty in terms of It seems though that

growing retail sales is inflation, pressure on Indonesia, which has been
consumers’ confidence household spending on relatively stable, is not
which right now is quite energy and basic goods is as severely impacted
low. leaving many consumers compared to other
anxious for the coming countries in the region.
months.
Opportunities in 2023

Retail outlook for the H1 2023 is relatively positive.

International and national retailers continue to invest in

Indonesia.

Expansion plans have been revised and are generally less

aggressive.
Industrial & Logistics
Market
Ferry Salanto
Head of Research

Rivan Munansa
Head of Industrial &
Logistics Services
 We Expect More Transactions to Come by the end of 2022
Annual Land Absorption Transaction During Q1 - Q3 2022
1,400
GIIC (Greenland)
1,200
Krakatau Industrial Estate Cilegon
1,000 KIIC
Hectares

800 Modern Cikande

Bekasi Fajar
600
Jababeka
400 Karawang New Industry City
200 Artha Industrial Hill
Suryacipta
0
CCIE
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 YTD
Griya Idola
Sentul Industrial Estate

Serang Bekasi Karawang Tangerang Bogor - Sukabumi 0 5 10 15 20 25 30 35 40 45

• Q3 2022 sales was lower than Q2 2021, at 24.5 ha. • The largest sales during Q3 occurred in Karawang,
• Total transactions in 2022 YTD was 139.7 ha, about amounting to 7.5 ha by a textile company from Korea and
66.4% of total sales of 2021. two data centre companies (10.2 ha) in Bekasi.
• Data center companies are still the most active
throughout 2022.
Data Centre Sector Continue to Underpin the Market
Active Industrial Sectors in 2022 YTD • Sales of industrial land will still be
supported by the logistics and data center
Technology Automotive sectors as well as high-tech based industries.
Building Food Electronics
1% 7%
Material 5% 1%
• Another sector that will still actively
1%
Others absorb land is automotive related to
7% electric vehicle technology, energy, food and
Packaging
basic chemicals.
2%
Chemicals
7%
Manufacturing
5%

Logistics/
Warehousing
Data Centre 17%
40%
 Land Price Remains Stable
Asking Land Price (/ sq m)

USD 350

USD 300

USD 250

USD 200

USD 150

USD 100

USD 50

USD 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD

Serang Tangerang Bekasi Karawang Bogor

There is no adjustment to the selling price of the land, and it is unlikely that there will be a price
increase until the end of the year.
Q3 and Q4 2022
Developers and investors are
on a “wait and see” mode

The "wait and see” gesture is

encouraged due to the current
and future economic instability
in 2023.
Impact of inflation and interest rate
to the industrial sector?
Inflation Interest Rate
Developers: Building costs increase, and margin It will affect developers and investors who are still
may possibly decrease. in the development phase and taking loans.

Occupiers: Purchase prices and rental rates will The weakening of the economy can lead to more
slowly increase. potential distress assets.
Opportunities in 2023

A stable economy will not happen

separately from the contributions
of the domestic market, which
drives economic growth.

The industrial sector will remain

stable amid uncertain global
economic conditions and become
more competent with other ASEAN
countries, such as Vietnam.
Opportunities in 2023
Stable:
• Data centre
• Pharmaceutical

Slowly increase:
• E-Commerce
• FMCG

Potential growth in the near future:

• Electronic vehicle (early stages)
Opportunities in 2023
Pockets of land that are starting to form:
Subang, Purwakarta and Central Java.
Purwakarta
Subang

Central Java
Residential (Apartment)
Market
Ferry Salanto
Head of Research

Steve Atherton
Head of Capital Markets &
Investment Services
 Less Confidence in Launching New Project
Cumulative and Annual Supply
300,000

250,000 5,923 6,363

6,019 3,014
2,698 4,325
9,769
17,524
200,000 8,115
19,271
Unit

13,862
150,000

100,000

50,000

0
2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F

Existing supply Annual supply

• Southgate Residence Prime tower is the newest project completed in Q3.

• The current macro condition resulted in the absence of new project launching.
• The building materials increase and raising inflation might postpone project launching.
 Price Remains Stable
Annual Unit Absorption Average Occupancy Rate Strata-title Apartment
12,000 10,620 (Serviced Apartment) • The total sales during 2022YTD are only
10,000 8,867
8,243 80% 782 units, 61% of the total 2021 sales.
68.05% 68.16%
8,000 70% 67.95%
5,898 61.10% • The 2022 sales level will not exceed 2021
Unit

6,000 4,682 60% 65.03% 65.01%

4,000 59.80% due to below-expected market conditions
50%
1,927
1,289
55.16% and limited stimulus from the government.
2,000 782 40%
0 30% • Few new projects particularly those almost
completed, increase the selling price.
2015

2016

2017

2018

2019

2020

2021

2015

2016

2017

2018

2019

2020

2021
2022YTD

2022YTD
• The average selling price for Jakarta
apartments is IDR 35.2 million.

Average Asking Price (All Classes) Average Asking Rents Serviced Apartment
(Serviced Apartment)
IDR36,000,000 IDR500,000 • A new project in the CBD is Citadines
IDR34,000,000 IDR400,000
Sudirman, providing 253 units.
IDR32,000,000 IDR300,000 • The occupancy rate fell slightly to 59.9%
IDR30,000,000 due to the addition of new service
IDR200,000
2015 apartment units.

2016

2017

2018

2019

2020

2021

2022 YTD
IDR28,000,000
• Serviced apartment market slightly
2015

2016

2017

2018

2019

2020

2021

2022 YTD

recover compared to the pre-Covid period,

CBD South Jakarta (incl. Non-prime) reflected in the increasing number of
expatriates looking for housing in Jakarta.
Apartment Buyers are Dominated by Investor-Buyers
Purpose of Buying Payment Method • Investors-buyers vs end-users is 60% to
40%.

• On contrarily, about 80 – 90% of landed

Hard Cash houses buyers are end-users (for upper-
14.64% middle-class housing).
Installment
End-User 41.00% • While for lower-class housing, most
41.88%
buyers are end-user.
Investor • The increases in loan interest do not have
58.13% too much impact on apartment sales
because buyers prefer cash
installment payments.
Mortgage
44.35% • For landed house-type properties, the
increase in interest rates has a more
impact than apartments because about
90% of buyers use mortgage facilities.

• The apartment with the most demand in

the range of IDR1 to 2 billion.
Apartment demand slowing everywhere

Globally/Regionally Globally/Regionally

Rental Apartment Market demand • New launches are fewer

softening as rentals are frothy and • Take-up has flattened
job market less secure.
• Prices are dropping in general
Apartment Market Outlook
in Indonesia

Factors reinforcing market softening

Holding costs
Global recession uncertainty further
constrains demand.
Limited number of renters

Unpredictable capital gains

Apartment Market Outlook
in Indonesia
When apartment and landed
housing prices are close,
Indonesian buyers prefer
landed houses.

Pandemic Covid-19 reinforced

the pattern of end-user market
softening, investor caution and
new hybrid work pattern.
Apartment Market Outlook
in Indonesia

Rising interest rates, increasing Uncompleted partly built project

construction costs and job create perception of higher risk to
instability make new launches buyers.
increasingly difficult.
Apartment Market Outlook
in Indonesia

Annual absorption continue NJOP steady, and asking prices of

downward trend since 2015 from land increasing due to recent
10,000+ units/year to 1,281 (2021) increases in plot ratio
and 782 (YTD 2022).
Transit Oriented
Development (TOD)

MRT and LRT in Mixed-use Colliers sees that

2023 equals projects can be other major
opportunities attractive Asian markets
for mixed-use options for the have quite
and apartment urban successful
developments. millennial. histories of
mixed-use and
apartments near
TOD.
Transit Oriented
Development (TOD)

When jobs start to

increase, rental demand
should return (local and
foreign) which will
Convenience and lifestyle support and improve
should ultimately win the investment returns.
hearts and expenditure of
end-users.
Opportunities in 2023

The recently updated city plan gives higher

plot ratio for many properties in strategic
TOD or city centre locations.

With less purchasing demand, shift from strata

title for sale to serviced apartments, co-living or
branded residence for targeted markets.
Expatriate Housing
Market
Ferry Salanto
Head of Research

Lenny van Es-Sinaga

Head of Residential Services
Expatriate Market: Profile & Budget
Number of expats • Out of 88,271 foreign workers in
140000 Indonesia comprises:
120000 - 38,745 professionals
100000
- 20,807 consultants
80000
60000 - 19,127 managers
40000 - 9,592 as board members
20000
0
• According to the Immigration Office,

2022F

2023F

2024F

2025F

2026F

2027F

2028F

2029F

2030F

2031F
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021
at least between 40% and 50% of
expatriates live in the Greater
Jakarta area.
Number of expats as per 2021
Budget Allocation/ Budget Allocation/
Level
month (USD) month (IDR)

9,592
Supervisor 1,000 – 1,200 14.5 – 17.5 million
Professional
Manager – Senior
1,500 – 3,500 21.75 – 50.75 million 19,127 Consultant
Manager 38,745
Manager
Director 3,500 – 4,500 50.75 – 65.25 million
Board member

CEO/CFO >5,000 >72.5 million

20,807
USD1=IDR14,500
Overall Outlook
Expatriate Housing

Expatriate housing demand has

experienced growth compared to
2021.
Overall Outlook
Expatriate Housing Number of Foreign Workers in Indonesia

109,546

95,335 93,761 96,574

85,974 88,271
Based on data from the Indonesian Ministry of
Labour until the end of May 2022, number of foreign
workers in Indonesia is

96,574 workers

2017 2018 2019 2020 2021 2022

Source: Indonesia Ministry of Labour (2017-May 2022)

Overall Outlook
Possibility of global recession

If prolonged it may impact towards

expatriate arrival in Indonesia, as
their company may also affected
by the economic condition.
Opportunities in 2023
Landlords
• High demand residential began to
show an increase in prices.
• Rental period begins to improve.

Tenants
• Rental prices remain stable.
• Some of the landlords are still
flexible with tenant’s wishlist.
Opportunities in 2023
Foreigners may now own Hak Milik Satuan Rumah
Susun that are built on land that has Hak Guna
Bangunan or Hak Pakai.

Foreigners only need to prove ownership of a visa,

passport or residence permit as a stipulation for
obtaining a housing.

Apartments and landed housing which can be

owned by foreigners: new units and old units (in a
certain price range, depending on the province
where the properties are located).
Hospitality
Market
Ferry Salanto
Head of Research

Satria Wei
Head of Hospitality Services
 Hotel Sector Has Shown Sign of Recovery
Number of Foreign Visitors
8,000,000 Annual Supply of Hotel Project
1,000
6,000,000
800
600
4,000,000
400
2,000,000 200
0
0 -200 2018 2019 2020 2021 Q1 Q2 Q3 2022E 2023E 2024E 2025E
2017 2018 2019 2020 2021 Jan - Jul 2022 -400 2022 2022 2022

Ngurah Rai Soekarno-Hatta 3-star 4-star 5-star

Average Occupancy Rate

100%
• There 220 new additional rooms in Jakarta, while in Bali
80%
there was no new hotel this quarter.
60%
• Overall, hotel performance in Ja`karta and Bali in Q3 2022 has
40%
improved.
20%
• One of the triggers is the quarantine for foreign travelers has
0%
2017 2018 2019 2020 2021 Q1 2022 Q2 2022 Jan-Aug
begun to be abolished. This appeals to both business and
2022 leisure travelers.
Jakarta Bali • The number of foreign tourist arrivals has started to
increase significantly, especially in Bali.
In Jakarta, this Year Occupancy has Caught Up with the Performance
Before Pandemic
Average Occupancy Rate (AOR) • The increasing number of business trips
100% organized by the government, corporations,
80% or individuals has helped increase the
60% occupancy level.
40%
20% • The start of many offline activities also helped
0% boost the level of occupancy in several
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec regions.

2018 2019 2020 2021 2022 • As the occupancy rate increases, the monthly
ADR figure also slowly increases.
Average Daily Room (ADR)
USD 125 • The G20 Summit and its activities will help
USD 100 boost hotel performance. The number will be
USD 75
seen in January next year.
USD 50
• In 2023, it is estimated that the number of
USD 25
foreign visits will increase so hotel
USD 0 performance will improve. This is a
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
momentum for hoteliers to prepare to receive
2018 2019 2020 2021 2022 more guests.
Bali Will Need to See More Inbound Visitor Before Really Recovers
Average Occupancy Rate (AOR) Number of Visitor to Bali
100% 800,000

80% 600,000
60%
400,000
40%
200,000
20%
0
0%
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022

Average Daily Room (ADR) • Number of tourist visits to Bali continues to increase but still a
USD 150 minimal.
USD 125 • The current market conditions are much better compared to the
USD 100 beginning of the pandemic (2020).
USD 75
• Several things have marked the beginning of the improvement
USD 50 in tourism activities in Bali, including:
USD 25 - The easing of travel regulations (related to vaccines, PCR tests,
USD 0 and quarantine)
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec - The opening of foreign tourist borders
2018 2019 2020 2021 2022 • In 2023 the number of foreign tourists who will come to Bali will
increase, considering that two big markets of foreign tourists
(Australia & China) have not fully returned.
Hospitality industry current market landscape
Time to ensure the performance can return
to normal

Do not invest excessively when the

current property has started to
move/operate again.
How will inflation impact
the hospitality industry?

If high inflation is prolonged, it may

decrease consumer purchasing power,
especially in the mid-and lower markets.

Price increases for hotel and airline

tickets may be unavoidable.
Will the possibility of a global recession
weaken hospitality performance?

It may not be as rough as the impact

from Covid-19 pandemic.

Possibility of the global recession may

affect the middle to low market, while
the middle up to upper market may
still contribute to hospitality industry.
Conditions entering
political year in 2023

Many MICE and meetings adhered

usually during political year. This will
become a distribution of income for
the hotel industry.
Opportunities in 2023

The effect of Covid-19 pandemic is greater

towards the industry rather current
economic condition.

Hospitality industry operator need to ensure

that the indicators and quality offered are
proportioned to the price paid by
consumers.

Applying ESG to all integrated hospitality

business.
Opportunities in 2023
Budget hotel operator – Have confident to
start sell to a higher market and increase
the value of the hotel.

Invest in the quality of services and crew.

The ease of earning Visa on Arrival (VoA)

becomes more attractive to foreign tourists.
VoA's long period of validity is relevant for
most foreign tourist.
Contacts

Michael D. Broomell Ferry Salanto Steve Atherton Monica Koesnovagril Bagus Adikusumo
Managing Director Head of Research Head of Capital Markets & Head of Advisory Services Head of Office Services
Investment Services

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Sander Halsema Rivan Munansa Lenny van Es- Sinaga Satria Wei
Head of Retail Services Director of Industrial & Head of Residential Head of Hospitality
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Real Estate Market Update H2 2022 and Opportunities In 2023