You are on page 1of 40

4Q 2011 i the knowledge

jakarta rEaL EStatE

research & forecast report

Property Sector Overview


office sector
average asking base rental rates soared by 25% Y-o-Y for both the US dollar and rupiah denominated buildings. average base rental rates for all classes of buildings in the last quarter of 2011 were recorded at US$21.21/sq m/month and rp127.527/sq m/month. Occupancy rates moved upward from 89% in 2010 to 94% in 2011. the competition to secure good office space will continue because office space coming on the market during the year will be limited while inquiries from tenants will continue to flow. as a result, rental rates are projected to continue to increase in 2012. additionally, the market will remain vibrant given the fact that around 60% of the total space in under-construction office buildings projected to begin operation in 2012 have been pre-committed.

apartment sector
a total of 15,058 new apartment units were completed during 2011; this is the historical high for the annual supply of apartment units. Of the total annual supply in 2011, around 80% has already been absorbed. Meanwhile developers claim that 66% of the 27,000 units projected to be completed in 2012 have been sold before they even finish construction. Meanwhile, the average apartment price per sq m forged ahead by 7% Y-o-Y, mainly due to the influx of new apartment projects with higher prices than the market average. apartment prices in the CBD rose from rp16.6 million/sq m to rp18.1 million/sq m.

eXpatriate hoUsinG sector


the supply of expatriate-standard houses tapers off and this heads toward a landlord market situation where they have more bargaining power. average asking rental rates for expat housing in the last six months eased by US$100 to US$500 per housing unit. Instead of giving discounts, landlords would cut housing rental rates provided that the lease term is set at a minimum of three years with an advance payment of rent. according to Colliers residential tenant representation Division, there was a substantial increase in the number of expatriate accounts handled while the number of expatriates enrolled in orientation were up by 50% compared to 2010. additionally, some of the International schools have confirmed that it is now difficult to find a seat for new students.

retail sector
Like the other sectors, pre-commitment levels for retail centres projected to begin operation in 2012 has reached 70%. Nothwithstanding this strong absorption the average rental rates for typical floors remained flat with most landlords in a position to maintain their current asking rental rates (an average of rp350,621/sq m/ month in jakarta area andrp253,173/sq m/month for cities outside of jakarta) while some shopping centres landlords have become more discerning in selecting new tenants which will potentially lure more crowd to their centres.

indUstrial estate sector


total industrial land sales during 2011 has reached an enormous 1,239 hectares having grown almost 2.3 times larger than the total sales recorded in 2010 (543 hectares). Such superb sales has consequently resulted in a significant increase in industrial land prices, which have jumped by 40% Y-o-Y with karawang and Bekasi regions contributing the highest increases of 98% and 62% respectively. the average land price in the greater jakarta area was US$113.55 sq m while the highest average industrial land price was found in Bekasi at US$150.33/sq m.

www.colliers.co.id

jakarta | 4q 2011 | oFFiCe

office sector

Supply
limited sUpplY dUrinG 2011
two new office towers in jakarta, tempo Scan tower and Menara 165, officially became operational during 4Q 2011. the two towers jointly contributed a total of 69,927 sq m of office space to the market. total office space for the whole jakarta area was recorded at
jakarta annUal office sUpplY
300,000 250,000 200,000 sq m 150,000 100,000 50,000 0 2011 2012F 2014F 2014F 2008 2010 2013F 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007

6.24 million sq m, with around 70% being located in the CBD area. the combined new office supply of the CBD and the outside CBD area in 2011 accounted for 220,981 sq m, of which 69% is being marketed as space for lease.

CBD

Outside CBD
Colliers International Indonesia - research

sUpplY in the cBd


In the early part of the year, supply for 2011 was projected to see four new buildings accounting for a total of 117,699 sq m. However, one building, 18 Park, located at the Sudirman CBD, has announced that it would not be operational until the early part of 2012. During 4Q 2011, the CBD saw the official opening of tempo Scan tower following the other two buildings, allianz tower and k-Link tower, that had become operational earlier. With these three office buildings contributing a combined total semi gross area of 94,563 sq m this year, the cumulative supply for the CBD area was recorded at 4.36 million sq m.

Despite sluggish supply this year, the office market is anticipating a significant amount of office space, totalling of more than 400,000 sq m, in the CBD over 2012. Even though the market will see more office for strata-title sales next year, during the 2000 2011 period, the average annual office space for lease reached 77,444 sq m compared to the annual supply of 35,890 sq m of office space for strata title sale.

cBd annUal office sUpplY Based on marketinG scheme


300,000 250,000 200,000 sq m 150,000 100,000 50,000 0 2011 2012F 2008 2000 2002 2004 2006 2001 2005 2003 2009 2007 2010

For Lease

For Strata-title Sale


Colliers International Indonesia - research

p. 2

| colliers international

jakarta | 4q 2011 | oFFiCe

sUpplY in the oUtside cBd


there were six new office buildings, which started operating in the outside CBD area during 2011. two small office buildings, MtH Square and Graha kramat, totalling a semi gross area less than 10,000 sq m, became operational early in the year. these were followed by Menara Citicon and alstom tower. the largest building this year to become operational was aPL (agung Podomoro Land) tower, formerly known as the Central Park Office tower. the year closed with the Menara 165 becoming fully operational. aPL tower is the tallest building outside of the CBD to operate in 2011. the total semi gross area provided by the six office buildings accounted for 126,418 sq m. this year the outside CBD area provided more space than the CBD, bringing the cumulative supply to 1.88 million sq m. the annual supply during 2011 was higher than it had been previously. Year 2011 was seemingly just the beginning of office supply growth, since in 2012 the office market in the outside CBD area will see 178,896 sq m more office space. Unlike the CBD where all new office buildings in 2011 were marketed for lease, the majority of new office in the outside CBD area during the year was offered as strata-title office. the strata-title office concept is becoming more common and will continue to grow further in 2012 in terms of the number of office spaces available. We anticipate around 180,000 sq m of office space coming on stream in 2012 of which around 53% of this area will be office for sale. Despite having larger office space (278,527 sq m), the office market will only see 37% of total office space in 2013 is offered for sale. Looking forward, the office market in the outside CBD area will become very active and will be highlighted by a number of office spaces projected to enter the market over 2012. Historically, the number of annual office supply hardly ever achieved more than 100,000 sq m. the growing economy has resulted in business expansion, which requires more commercial space, which will drive the bourgeoning office development of the future.

oUtside cBd annUal office sUpplY Based on marketinG scheme


300,000 250,000 200,000 sq m 150,000 100,000 50,000 0 2011 2012F 2014F 2008 2010 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007

For Lease

For Strata-title Sale


Colliers International Indonesia - research

colliers international |

p. 3

jakarta | 4q 2011 | oFFiCe

fUtUre office BUildinGs

projected completion Year cBd area 1Q 2012 1Q 2012 1Q 2012 2Q 2012 2Q 2012 2Q 2012 4Q 2012 4Q 2012 4Q 2012 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 oUtside cBd 1Q 2012 2Q 2012 2Q 2012 4Q 2012 4Q 2012 4Q 2012 4Q 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 Menara Satu Grand Soho Slipi Sovereign Plaza Wisma Pondok Indah 3 Chitatex tower Blue Green Office Boutique jewel tower a alamanda tower Galery West DIPO Bussiness Centre talavera Suite Graha Elnusa 2 18 Office Park Naras tower Signum tower Green kosmo Mansion Green tebet kelapa Gading Slipi tB Simatupang Sultan Iskandar Muda tB Simatupang Meruya Pantai Indah kapuk tB Simatupang kebon jeruk Slipi tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang Mt Haryono 18 Park Multivision tower Office 8 Ciputra Office tower World trade Centre 2 aXa tower Eighty8 the City Centre tower One Office at Setiabudi Menara Prima 2 rasuna tower Chase tower Life tower rifa 2 International Financial Center 2 the City Center (Phase 2) the City Center (Phase 3) Sudirman Center tower Mangkuluhur tower B Graha Surya Internusa 2 GP Plaza SCBD Hr rasuna Said Senopati Satrio Sudirman Satrio Casablanca kH Mas Mansyur Setiabudi Mega kuningan rasuna Said Sudirman Hr rasuna Said Satrio Sudirman kH Mas Mansyur kH Mas Mansyur Sudirman Sudirman rasuna Said Gatot Subroto BUildinG name location

sGa (sQ m)

marketinG scheme

statUs*

23,136 Strata-title and For Lease 22,000 Strata-title and For Lease 48,000 Strata-title 64,000 For Lease 57,000 For Lease 60,995 Strata-title and For Lease 56,500 Strata-title and For Lease 84,000 Strata-title and For Lease 11,000 Strata-title and For Lease 40,000 For Lease 80,000 For Lease 60,000 For Lease 30,500 For Lease 30,000 Strata title 40,000 For Lease 34,000 Strata-title 40,000 For Lease 126,600 Strata-title 39,356 For Lease 40,000 For Lease 12,204 Strata-title

Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning

18,770 Strata-title and For Lease 52,000 Strata-title 16,020 Strata-title and For Lease 36,106 For Lease 28,000 For Lease 20,000 For Lease 8,000 Strata-title 33,000 Strata-title and For Lease 22,800 Strata-title and For Lease 19,600 Strata-title 16,250 For Lease 40,000 For Lease 36,627 Strata-title 20,000 For Lease 58,500 For Lease 23,000 Strata-title 8,750 For Lease

Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning

*) Under Construction: where construction activity is in progress, including either foundation or superstructure. Under Planning: no contruction activities on site but all permits have been approved by the fovernment.

Colliers International Indonesia - research

p. 4

| colliers international

jakarta | 4q 2011 | oFFiCe

Demand
sUBstantial demand
the closing occupancy rate for the year stood at 93.3%, reflecting an upward trend compared to last quarter. the overall increase in the occupancy rates increased both in the CBD area and outside CBD area. Quite a few quality office buildings reported heightening occupancy during the quarter, which mainly contributed to the increase in the overall occupancy rate. Nowadays the quest for quality office space has intensified with many tenants vying for the same space.

demand in the cBd


the harvest time for office buildings in jakarta has heightened. the overall occupancy rates at the end of the year were 94.1%. this reflects an upward trend of around 5% Y-o-Y. the general occupancy performance suggests that this period is a landlord-market situation, where tenants will become increasingly active in their attempts to find office space in a market providing a limited number of quality premises. the stock of office space in 2011 was quite limited, as it has been over the last five years. this has resulted in a rise in the occupancy levels this year. Not only existing buildings experienced the continued office space absorption, but also the buildings, like allianz tower, k-link tower and tempo Scan tower, which were completed during 2011. these three buildings all recorded a high precommitment level early on after becoming operational. tempo Scan tower for example, has recently secured significant transactions by mining (adaro) and media investment management (GroupM). another significant deal occurred between Landmark tower a and adira, a finance company, which involved more than 10,000 sq m and helped the building reduce its vacancy rate. another Landmark tower is approaching oil and gas companies to enhance occupancy performance. another notable transaction of more than 1,000 sq m took place in the Plaza at jalan MH thamrin. It involved acer Indonesia securing more than 1,700 sq m. In the Patra Office tower in jalan Gatot Subroto, asian Outsourcing Services took around 1,200 sq m. these were not the only sizeable transactions that boosted the occupancy level. there were a number of mid-sized transactions that also helped. For example an insurance company (Great Eastern) and a medical services company have secured spaces at Graha Surya Internusa and Menara karya, which are both located in jalan Hr rasuna, Said with respective sizes of 400 sq km and 576 sq m. transactions dealing with properties hundreds of sq m in size also sustained the occupancy level, like the addition of a software company to Sequis Plaza, Bank Sulut entering Plaza Gani Djemat and Maybank moving to Plaza BII tower 2. Some office buildings had to release tenants, as was experienced by Gedung jaya, which lost finance and insurance company tenants and artha Graha, which lost a mining company. thus far, in the office market, relocation has not been a problem for maintaining occupancy performance in general, because in most cases, new tenants have absorbed the vacant office spaces left by old tenants. Bank Permatas recent case is a good example of this. the company will relocate to a newer building next year leaving around 7,000 sq m of vacated space, which has already been secured by Zurich, an insurance company. this has been the case quite commonly, occurring many times. If we recall a few years previously, Standard Charter Bank left their premises to relocate to a newer building in jalan Satrio. their presence in the old building was replaced by aNZ. Over time, such cases have helped to maintain an occupancy level at around 90%, notwithstanding the influx of new buildings.

colliers international |

p. 5

jakarta | 4q 2011 | oFFiCe

annUal sUpplY, demand and occUpancY of office space in the cBd


400,000 300,000 200,000 100,000 0 2005 2009 2003 2010 2001 2000 2002 2004 2006 2007 -100,000 2008 2011 100% 80% 60% 40% 20% 0%

sq m

Supply

Demand

Occupancy (%)
Colliers International Indonesia - research

oUtside cBd
throughout 2011, the occupancy only dropped temporarily during 2Q. Starting in 3Q, occupancy gradually went up and reached its peak in 4Q when occupancy reached 91.6%. Occupancy increased slightly by 2.18% Y-o-Y. Steady performance by existing buildings helped maintain the occupancy level. During 2011, all the newly operating buildings posted excellent leasing and sales activities that also underpinned the overall occupancy performance for the year. For example, Menara 165, operating in the last quarter of this year, achieved 75% occupancy and Menara Citicon has reached 90% occupancy. the major tenants within these two buildings include Gamma Group, Indo Menaratama, Mitra Inti Selaras, terralog and a food supplement producer. Of the office buildings operating in the previous quarter, Menara Citicon has also enjoyed rapidly increasing occupancy. this building, which is owned by a local contractor company, is expected to have a committed occupancy rate above 90% by 4Q. the latest transaction for the building, Pt Singa Langit jaya, a food supplement company, occupies around 1,200 sq m.

performance BY reGion
Office buildings in East jakarta are dominated by buildings, which have been operating for over 15 years, with Menara MtH as the latest supply to operate in 2010. In its second year of operation, Menara MtH has registered a notable occupancy level. thus far, with limited office stock in this region, its occupancy stands at above 90%. Meanwhile in the North jakarta region, office buildings are mainly concentrated in the kelapa Gading, Sunter, Pluit and ancol areas. So far kelapa Gading is the most preferable location in the North due to its growing commercial and residential area. the tenants in the East and North jakarta regions are mostly local business entities that generally serve the neighbourhood. Cental jakarta in proximity to the CBD area registered 92.7% occupancy for the quarter. the latest building being built in 2010, Graha kramat has been used up by one political party. While office performance in South jakarta is mostly characterised by offices in the jalan tB Simatupang area, in South jakarta, an office building located in the Mampang area has been vacated by its major tenant, johnson & johnson, which moved to k-Link tower in jalan Gatot Subroto.

p. 6

| colliers international

jakarta | 4q 2011 | oFFiCe

annUal sUpplY, demand and occUpancY of office space in the oUtside cBd
400,000 300,000 200,000 100,000 0 2005 2009 2003 2010 2001 2002 2004 2006 2007 -100,000 2008 2011 100% 80% 60% 40% 20% 0%

sq m

Supply

Demand

Occupancy (%)
Colliers International Indonesia - research

pre-commitment level
Occupancy rates in 2012 are expected to remain robust considering that the upcoming new office developments have secured high precommitment levels from several notable tenants. For example, the World trade Center 2 (WtC 2) has closed a deal with two leading within cBd area banks, Bank Permata and Standard Chartered Bank, and an oil and gas company, total E & P. these major transactions together with other smaller ones have used up more than 85% of the space at WtC 2. another under-construction office tower, Ciputra World jakarta (CWj), has a commitment with a leading bank from Singapore, which will be occupying most of the office building (10 floors) together with Grohe (bathroom equipment from Germany) and regus (an office services provider). this indicates that more than 50% of office space has been transacted. In the same Corridor as CWj, aXa tower (part of the kuningan City commercial centre) has also secured a high pre-commitment level. Meanwhile, the 18 Park located in the SCBD commercial area has also confirmed several tenants commitments before being officially operational in 2012. In the Outside CBD, around 60% of the total office space projected to come in 2012 has been reserved by several tenants. For example Indo tambang, which will occupy Wisma Pondok Indah 3 after previously being based at Ventura, another building located in tB Simatupang. Menara Satu, located on the main road of kelapa Gading closed out 2011 by securing commitments that will account for more than 70% of its occupancy. It is very likely that occupancy will continue to rise in 2012, considering the quality of the premise and its strategic location in kelapa Gading. Meanwhile, two other neighbouring buildings in tB Simatupang, Sovereign Plaza and Chitatex tower enjoyed pre-committed occupancy of above 70%. Oil and gas companies are still the main generator in both Chitatex tower and Sovereign Plaza.

colliers international |

p. 7

jakarta | 4q 2011 | oFFiCe

annUal: sUpplY, demand and occUpancY of office space in the oUtside cBd cBd
Space absorbed annual Supply

oUtside cBd
Space absorbed annual Supply

2013F

2013F

2012F

2012F

2011

2011

150,000

300,000

450,000

150,000

300,000

450,000

sq m

sq m
Colliers International Indonesia - research

rental rates, Service Charge and Prices


askinG rental rates: a vast leap
Limited space during the year combined with increasing expansion activities have inevitably caused the average rental rates for buildings in rupiah to soar by 14% and by 5% for buildings quoted in US$, Q-o-Q. Finding a good office space during 2011 was challenging because new office stock is very limited and also because tenants relocation and expansion was very active. this is undeniable because the average rental rates since last year have changed substantially by 24% (for rupiah denominated buildings) and by 26% (for US Dollar denominated buildings). jalan Sudirman as the main thoroughfare in the CBD contributed the highest increase in the overall CBD rental rates. We have recorded several office buildings located along jalan Sudirman that increased their asking rental rates by 30%. Several new buildings entering the market over the last two years have been
averaGe askinG rental rates in jakarta
rp270,000 rp225,000 rp180,000 rp135,000 rp90,000 rp45,000 rp0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 rp US$
Colliers International Indonesia - research

able to achieve peak performance, while the other older buildings have been offering higher rents, particularly those with limited office space. Some office buildings located along jalan rasuna Said also adjusted asking rental rates. a 14% increase raised the average asking rental rate to rp127,527/sq m/month for all classes of office buildings denominated in rupiah in 4Q 2011. this figure is a jump of 24% Y-o-Y. Meanwhile, the average rental rate in US Dollars has also climbed by 5% this quarter, making this quarters figure stand at US$21.21/sq m/ month. this is a big leap Y-o-Y of 26%. average asking rental rates in US Dollars during the last quarter of 2010 was only US$16.69. average asking rental rates for grade a office buildings have reached US$21.3/sq m/month, while those quoting local currency registered at an average above rp130,000/sq m/month.

$30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00

p. 8

| colliers international

jakarta | 4q 2011 | oFFiCe

average asking rental rates in the outside CBD area only increased by 2% Q-o-Q to an average of rp92,668/sq m/month. Nevertheless, a Y-o-Y increase posted a significant jump of 30%, where average rental rates in last quarter of 2010 were only rp71,411/sq m/month. Such a significant increase was triggered by the influx of new buildings, which adopted higher rates above the average market (because they are mostly high quality office buildings). On the US dollar front, average asking rental rates only eased moderately by 2% Q-o-Q to US$13.39/sq m/month, which also reflects an increase by 4.4% Y-o-Y. Overall, the average rental rates rose accordingly with the heightened activities of tenants looking for office space in the outside CBD area.

jalan tB Simatupang, as the most active business area in the outside CBD area, registered a moderate increase by 2% Q-o-Q due to the influx of two office buildings, Menara 165 (from the secondary market) and Plaza alstom, in 2011. average asking rental rates in rupiah were registered at rp95,690/sq m/ month, reflecting a 5% increase Y-o-Y. On the US Dollar front, nothing much changed. average rental rates only eased slightly to US$12.92 from the previous rate of US$12.85/sq m/ month, due to minor adjustments made by Menara talavera.

service charGe
Figures for service charge costs were relatively stable, only easing slightly by 3% Y-o-Y for rupiah denominated buildings to rp54,624/sq m/month. While for US Dollar buildings, service charges rose by 8% Y-o-Y to US$6.31/sq m/ month. In the outside CBD area, service charges were recorded at rp40,460/sq m/month, a moderate increase of around rp300 compared to last quarter. Meanwhile service charges in US Dollars, which were mainly applicable in the tB Simatupang and Pondok Indah area, moved slightly upward to US $4.93/sq m/month.

take-Up, sellinG price and forecast of strata-title office BUildinGs


Nothing new is notable for strata-title office supply during 2011. In the CBD and out of a total of 615 thousand sq m of space, more than 95% has been taken up, leaving around 13 thousand sq m of space unsold. In 2011, the price of strata-title office buildings in the CBD went up by 36% Y-o-Y for building with a US Dollar price tag from US$1,856/sq m last year to US$2,522. Similarly, the price of strata-title buildings in rupiah was up by 11% compared to last years figure of rp21.60 million/sq m. Meanwhile, the price of stratatitle buildings located in the outside CBD area was registered at rp17.14 million/sq m, reflecting a 17% increase compared to last year. In the outside CBD area, notable increases were particularly the result of price adjustments made by aPL tower, Gandaria 8, kEM tower and the Boulevard. Meanwhile, price increases in the CBD area were mainly due to the adjustments made by newer buildings.

price of strata-title office BUildinGs in jakarta


$3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Colliers International Indonesia - research

colliers international |

p. 9

jakarta | 4q 2011 | oFFiCe

Outlook
Notwithstanding the significant amount of new office space coming in 2012, the marketing task will be a lot easier because almost 61% of the total annual space in the CBD has been absorbed while 58% of total new office space in 2012, located in the outside CBD area, has been taken up before the buildings are even in operation. Further, with Indonesia regaining an investment grade rating from Fitch ratings for long-term foreign and local currency debts from BB+ to BBB-. the office market will be more confident in selling the remaining space to accelerate higher rental rates in 2012. as the city grows in terms of building construction and number of vehicles, the relief of intensifying traffic congestion is anticipated through the construction of the elevated road, which will connect the tanah abang area, pass through jalan Satrio (one thoroughfare in the CBD) and kasablanka and then end at kampung Melayu. this will ease traffic along jalan Satrio and jalan Casablanca, where three major mixed-use developments will be finished. Similar development will connect jalan tB Simatupang and Blok M area. Both projects are scheduled to finish in 3Q 2012. another heavy investment project is the Mrt connecting the south part of jakarta, passing through jalan tB Simatupang and jalan Sudirman (the main thoroughfare in the CBD), and ending at the Hotel Indonesia roundabout (Bunderan HI). this first stage Mrt project is scheduled to start in 2012 and finish in 2016. Part of the project will be elevated rail and part will be underground. Once this project is operational, it will not only reduce the use of private cars, but also it will raise land prices along the route (which has already happened recently). the jakarta Government is likely to allow higher plot ratios, particularly in the surrounding areas of every stop (station) of the Mrt.

p. 10

| colliers international

jakarta | 4q 2011 | apartment

apartment sector
apartment Strata-title

Supply
Six projects which became available in the market recently comprise 3,363 apartment units (exactly the same number as last quarter) scattered all around jakarta. Four projects are located in North and East jakarta while two project is situated in South jakarta and the CBD. Niffaro apartment, located in jalan Pasar Minggu, South jakarta, offers one tower (526 units) out of a total of three towers planned. two towers from Casa Grande residence are part of a mixed-use compound - kota kasablanka in jalan Casablanca comprising 660 units. Meanwhile, after being relatively dormant for quite some time, the East jakarta region started to see more apartment projects. this quarter, the region saw two middle-class apartment projects including Mt Haryono residence and list of strata-title small units. Signature Park which offerapartments operate dUrinG 3Q 2011
apartment name Niffaro (tower Mahoni) Casa Grande residence (tower avalon and Mirage) De Paradiso ancol Mansion Mt Haryono residence Signature Park location Pasar Minggu kasablanka Pluit ancol Mt Haryono tebet

In the North jakarta area, ancol Mansion introduced one- to three-bedrooms ranging from 60 to 165 sq m with panoramic sea views, something only available in areas like ancol. Meanwhile, De Paradiso apartment located in Pluit only provides two-bedroom units, ranging from 41 to 57 sq m. Overall, with a relatively large number of units, apartment projects available during the quarter are targeted mainly at middle-class buyers. these additional units brought the cumulative supply of apartments for strata-title sale to a total of 97,570 units as of the end of 2011. In other words, the total supply during this quarter alone contributed as much as 3.6% of jakartas apartment stock or an increase of 8.5% YoY. In total, 2011 has:

developer Pt Putra Indonesia Bersama Pakuwon Group agung Sedayu Group agung Sedayu Group Pt Bersaudara kagum Sejahtera Pikko Group

#Unit 526 660 418 560 599 600

price ranGe (rp/sQ m) 13 mio - 14 mio 18 mio - 19 mio 13 mio - 14 mio 13 mio - 15 mio 9 mio - 10 mio 11 mio - 12 mio

Colliers International Indonesia - research

With plenty of good hope for 2012, the ongoing plan for more apartment units to be built is very likely. the under-construction projects like Sudirman Suites, Ciputra World jakarta (CWj) Phase 2 and Setiabudi Sky Garden will fill the upper-class segment in the future. Sudirman Suites will sit on the land formerly known as Wisma Benhil and will provide one-bedroom and three-bedroom units. CWj Phase 2 will consist of four condominium towers and one

serviced apartment tower that will be managed by Fraser Hospitality. jakarta Setiabudi International will build Setiabudi Sky Garden, formerly taman Puri Setiabudi townhouse, consisting of two condominium towers and one serviced apartment tower. In the outside of the CBD, there are two new projects being introduced i.e. La Maison Barito in South jakarta and the H residence in East jakarta.

sUpplY analYsis dUrinG 2011


the annual supply of stratatitle apartments in 2011 was recorded as the highest for the last 14 years, after the economic crisis in Indonesia. a total of 15,058 apartment units entered the market during the year in the low- to upperclass segments scattered in five municipalities of jakarta. West jakarta was the largest contributor of apartment projects with eight projects ranging from low (rusunami the abbreviation of rumah susun sederhana milik or low cost er-multi-family residential) to mid- to upper-class, followed by South jakarta with five projects of low- (rusunami) to upperclass.

colliers international |

p. 11

jakarta | 4q 2011 | apartment

sUpplY distriBUtion of strata-title apartments in different mUnicipalities dUrinG 2011


West jakarta 36% CBD 4% Central jakarta 4% South jakarta 29%

East jakarta 9%

North jakarta 18%


Colliers International Indonesia - research

In reviewing the supply during 2011, the agung Podomoro Group was the most active development group in building apartment projects. Most of their projects are located in West jakarta including Central Park and royal Mediterania Garden which are part of the Podomoro City superblock. Lippo karawaci

ranked second with three apartment towers at kemang Village. along with the growth of the middle income class in jakarta, a number of low- to middle-class projects have been built by relatively new developers which represent 29% of all development during 2011.

the composition of the most active apartment developers in 2011


agung Sedayu Group 11%

Duta anggada 4%

Intiland 5%

Pikko 11%

Gapura Prima 4%

agung Podomoro Group 47% Lippo 16%


Colliers International Indonesia - research

analYsis of apartment market in 2012 - 2013


Based on the information we got from developers, we anticipate a further supply growth up to 2013 with an additional 40,784 units scheduled to be on the market. However, as some projects are still in the early stages of development, some adjustments are made in order to forecast future supply by taking into account the status of current construction progress for each project and their pre-sales rate. Based on that, Colliers International Indonesia came up with a number of 29,883 units to be completed by 2013. Shown in the next chart, the CBD and South jakarta remained as preferred locations for new developments over the next two years. In the CBD, the majority of future supply will be provided by superblock development, such as Ciputra World jakarta (CWj) I, CWj II, kota kasablanka and kuningan City. In South jakarta where the site coverage ratio is generally low, the character of developments is high-class with emphasis on the greenery.

p. 12

| colliers international

jakarta | 4q 2011 | apartment

list of Under constrUction of strata-title apartment

apartment name 2012 regatta rio de janeiro East Park Green Palace (8 towers) Belmont residence (tower Everest) ambassade residence (tower a) Senopati Suites Denpasar residence (tower kintamani and Ubud) the Grove residence 8 at Senopati (tower 2 & 3) the Wave Pancoran riverside Luxurious raffles residences at Ciputra World St Moritz (the Presidential Suite tower, the ambassador Suite tower & the royal Suite tower) Sentra timur residence tahap 1B Menteng Square Cervino Village Puri Park View the Grove Suite the royal Springhill (tower Marygold & Magnolia) thamrin Executive residence the East at Essence Darmawangsa Myhome apartment at Ciputra World Gading Nias residence block Grand Emerald One Park residence tamansari Semanggi kondominium Eksklusif Verde the H tower* Season City (tower C) 2013 Belmont residence (tower Montblanc) Westmark kebagusan City (tower B) GP Plaza Pasar Baru Mansion (2 towers) kemang Village (the tiffany & the Infinity) residence at Dharmawangsa Sentra timur residence (Stage 2) Green Bay Pluit Green Lake Sunter dGreen Pramuka (tower Faggio & Pino) the Windsor (2 towers) Pakubuwono terrace (tower I) the H residence

location Pantai Mutiara krt radjiman kalibata kebon jeruk kuningan Senopati Satrio rasuna Said Senopati rasuna Said Pengadegan timur Satrio Puri Indah Cakung Matraman kasablanka Meruya Utara rasuna Said kemayoran thamrin kebayoran Satrio kelapa Gading Gandaria Gatot Subroto rasuna Said rasuna Said Grogol

reGion North jakarta East jakarta South jakarta West jakarta CBD South jakarta CBD CBD South jakarta CBD South jakarta CBD West jakarta East jakarta East jakarta South jakarta West jakarta CBD Central jakarta CBD South jakarta CBD North jakarta South jakarta CBD CBD CBD West jakarta

developer name Badan kerjasama Mutiara Buana (jO Pt Intiland Development & Pt Global Ekabuana) Pt Cakra Sarana Persada agung Podomoro Group Gapura Prima Pt Duta regency Pt Mahkota asia Graha agung Podomoro Group Pt Bakrieland Development agung Sedayu Group Pt Bakrieland Development Pt Graha rayhan tri Putra (riyadh Group) Pt Ciputra Property tbk Pt Lippo karawaci tbk Pt Bakrieland Development Pt Bahama Development Pakkodian Pt Pelaksana jaya Mulia & Pt alam jaya Perkasa Pt Bakrieland Development Springhill Golf Group Pt jakarta realty (agung Podomoro Group) Pt Prakarsa Semesta alam Pt Ciputra Property tbk agung Podomoro Group Pt Intiland Development Pt Wika realty Pt Farpoint realty Indonesia Pt Hutama karya realtindo agung Podomoro Group

#Units 110 1,650 4,000 553 400 103 1,100 416 400 1,900 1,900 88 484 1,143 1,500 518 3,000 151 384 400 244 136 747 379 1,400 257 9 714

kebon jeruk tanjung Duren S Parman Gatot Subroto Pasar Baru kemang Dharmawangsa Cakung Pluit Sunter rawasari Puri Indah Ciledug Cawang

West jakarta West jakarta West jakarta CBD Central jakarta South jakarta South jakarta East jakarta North jakarta North jakarta Central jakarta West jakarta South jakarta East jakarta

Gapura Prima Cowell Development Gapura Prima Gapura Prima Pt trikarya Idea Sakti Pt Lippo karawaci tbk Pt Bina Puri Lestari Pt Bakrieland Development agung Podomoro Group agung Podomoro Group Pt Duta Paramindo Pt antilope Madju Puri Indah Pt Selaras Mitra Sejati Pt Hutama karya realtindo

350 550 588 320 520 415 89 1,000 3,200 2,400 2,900 340 750 505
Colliers International Indonesia - research

Note: *total 162 Units (Serviced apartment: 153 Units & Strata-title apartment: 9 Units)

colliers international |

p. 13

jakarta | 4q 2011 | apartment

distriBUtion of apartment projects schedUled to Be completed in 2012 - 2013 BY nUmBer of Units


18 East jakarta 15% West jakarta 15% 15 CBD 17% Central jakarta 13% South jakarta 24% 12 9 6 3 0 South jakarta CBD North jakarta West jakarta East jakarta Central jakarta

BY nUmBer of projects

North jakarta 16%

Colliers International Indonesia - research

Demand
In line with the growth of supply, the absorption rates started showing an upward trend. During 4Q 2011, we recorded an increase in the average absorption rates albeit moderate. Our survey revealed that the absorption rates for stratatitle apartments have risen to 75.7% from the previous 75.3% in 3Q 2011. the determinant of sales success includes location choice, architectural design, developer experience and reputation, and developers commitment in delivering the projects on schedule.

aBsorption rates of operatinG apartment projects in 2011, Based on reGion


reGion CBD South jakarta Outside CBD aBsorption 86.4% 75.2% 73.9%
Colliers International Indonesia - research

aBsorption rates of Under constrUction apartment projects, Based on reGion


reGion CBD South jakarta Outside CBD aBsorption 74.7% 66.8% 56.6%
Colliers International Indonesia - research

the pre-sale absorption rates of underconstruction apartment projects increased negligibly to 62.7% in 4Q 2011 from the previous 61.9% in the last quarter. the slight increase

was again triggered by the attractive promotional packages and flexible payment terms of the newly-built projects, in addition to new concepts and good locations.

p. 14

| colliers international

jakarta | 4q 2011 | apartment

there are three major types of apartment buyer in jakarta i.e. owner-occupier, investor and non-jakartan residents having business in the city. the latter are typically businessmen living outside of jakarta but frequently coming to the city for business purposes. Having an apartment in the city is better than hotel accommodation. the investor type of buyers are mostly looking for projects in the CBD and South jakarta area because rentals in these areas are quite active. Meanwhile, owner-occupiers are generally dominant in projects which offer different / thematic concepts (like resort, panoramic sea view, etc.)

the outside CBD areas such as East jakarta, West jakarta and North jakarta are still a favoured location for local investors particularly those looking for a more affordable price and situated in a location where the rental market is potentially strong i.e. near a university (targeted to students) or a commercial area (targeted to middle-class workers). Below is a cost comparison between living in an apartment and a non-apartment rented room (Indonesian term: rumah kost). rumah kost generally provides a small bedroom with private bathroom but not facilities or amenities as in an apartment.

cost comparison Between livinG in apartment and non-apartment rented room (per Unit/month)
reGion East jakarta West jakarta North jakarta apartment non-apartment rented room rp 300,000 - rp 900,000 rp 650,000 - rp 1,200,000 rp 450,000 - rp 1,000,000
Colliers International Indonesia - research

rp 1,500,000 - rp 4,000,000 rp 3,500,000 - rp 5,000,000 rp 2,500,000 - rp 6,000,000

pre-sales performance
annUal apartment sUpplY (Units) vs pre-sales performance
Supply 2013F Demand

2012F

2011

5,000

10,000

15,000

20,000

25,000

30,000

units
Colliers International Indonesia - research

the above graph shows pre-sales effort made before the apartment is ready to occupy. thus far, of the total of more than 15,000 units sold in 2011, around 80% have been absorbed. Likewise, the pre-sales rate for strata-title apartments projected to be completed in 2012 has reached 66%. the majority of middle- to low-class apartments and middle- to upper-

class apartments located in the CBD and South jakarta recorded an impressive sales rate of above 80%. Meanwhile, apartment projects anticipated to enter the market during 2013 are reported to have recorded a sales rate of approximately 44%. typical purchasers of these future developments are aiming at capital gains.

colliers international |

p. 15

jakarta | 4q 2011 | apartment

asking Price
the annual supply of stratatitle apartments in 2011 was recorded as the highest for the last 14 years, after the economic crisis in Indonesia. a total of 15,058 apartment units entered the market during the year in the low- to upperclass segments scattered in five municipalities of jakarta. West jakarta was the largest contributor of apartment projects with eight projects ranging from low (rusunami the abbreviation of rumah susun sederhana milik or low cost er-multi-family residential) to mid- to upper-class, followed by South jakarta with five projects of low- (rusunami) to upperclass.

averaGe askinG price in different reGions


reGion averaGe askinG price in rp/sQ m 4Q 2010 3Q 2011 4Q 2011

CBD South jakarta Outside CBD average

16,596,865 11,808,303 9,406,801 12,109,004

17,359,188 12,664,360 9,944,900 12,518,769

18,114,415 12,844,135 10,112,389 12,942,557

Colliers International Indonesia - research

the average asking prices grew slightly by 4.3%, 1.4%, and 1.7% QoQ for the CBD, South jakarta and non-CBD areas, respectively. the CBD area had a more significant increase compared to other areas because of many upper-class projects launched with high prices

as well as because of good take-up rates of existing apartments. Meanwhile, the moderate increase in sales prices in South jakarta and non-CBD was largely due to good pre-sales performance of under-construction projects.

averaGe askinG price of strata-title apartments Based on reGion


rp20,000,000 rp16,000,000 rp12,000,000 rp8,000,000 rp4,000,000 1Q 2Q 3Q 4Q 1Q 2009 2009 2009 2009 2010 CBD 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 average 4Q 2011

South jakarta

Non CBD

Colliers International Indonesia - research

During 2011, the asking prices for apartments in the CBD, South jakarta, and non-CBD areas showed an upward trend of an average of 2% per quarter. the CBD showed the most significant increase for the last two consecutive quarters, largely due to some new projects in this area, such as kota kasablanka (avalon and Mirage tower) and Denpasar residence which are approaching their scheduled hand-over dates.

the increasing trend of apartment prices in the CBD, South jakarta, and non-CBD areas will likely continue in 2012. Many upper-class projects such Denpasar residence, Ciputra World jakarta, Senopati Suites, residence 8 at Senopati, One Park residence in South jakarta, and one superblock in the non-CBD area like St. Moritz will enter the market. the influx of these projects will accordingly adjust the overall prices.

p. 16

| colliers international

jakarta | 4q 2011 | apartment

Based on our survey, payment methods like cash instalments and hard cash are the most chosen option for buying middle- to upper-class strata-title apartments in jakarta. the cash instalment method is facilitated by the developer

to ease buyers into owning units without having to be screened by a bank while with hard cash payments, buyers will earn a 10 to 20% discount from the total price.

annUal averaGe askinG price of strata-title apartments


16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 2008 2009 2010 2011 2012F 10 - 16%

Rp/sq m

Colliers International Indonesia - research

averaGe askinG price of strata-title apartments reGion 2011 2012f

CBD South jakarta Outside CBD

18,114,415 12,844,135 10,112,389

20,445,988 15,877,112 11,040,844


Colliers International Indonesia - research

In our assessment, the average price of apartment units in 2012 will increase in the range of 10 to 16% taking into account the expected price increases of existing apartments as well as the under-construction apartments projected to be finished in 2012. the most significant increment is anticipated for apartment projects in South jakarta areas like kebayoran Baru, Dharmawangsa, Senopati, and kemang, since the expatriate rental market is very strong there. as for the CBD, we expect to

see further growth of around 13% in apartment prices over 2012. the increase will be triggered by newly launched projects during the year, mostly from the upper-class segment. Meanwhile, in the non-CBD area more mid- to low-class and rusunami projects will be built and this will restrain the overall price from increasing substantially despite the existence of upscale developments such as the Windsor and St. Moritz in West jakarta and regatta in North jakarta.

colliers international |

p. 17

jakarta | 4q 2011 | apartment

apartment For Lease (Serviced and Non-serviced)

Supply
No new developments of apartments for lease (serviced and non-serviced) in jakarta will enter the market during the last quarter of 2011. In fact, the apartment for lease market witnessed a drop in total supply by 46 units as a result of the termination of operations at ratu Plaza apartment. this apartment building, built in 1981, is strategically located in jalan Sudirman; however with obsolete design, it cannot compete with modern apartment projects. It is now in the process of acquisition by a new owner. During 2011, the supply of apartments for lease (serviced and non-serviced) only saw an additional 108 units from Frasers residence in the CBD. thus the cumulative supply of apartments for lease stands at 8,012 units. additional supply up to 2013 will be composed of several new apartment developments listed in the table below. It is estimated that approximately 980 units of five serviced and one non-serviced apartment developments will invigorate the leasing market. they are targeted at business travellers and temporary workers who do not need facilities and have a limited budget.

list of Under constrUction of apartment for lease

apartment name 2012 Plaza Senayan (tower C & D) aston at Paradiso Pluit Whiz Hotel at the Park residence (tower E) 2013 Citadines rasuna (@the H tower) ascott Serviced residences at Ciputra World aston at Green Central (Cerberra tower)

location Senayan Pluit kelapa Gading

reGion South jakarta North jakarta North jakarta

developer name Pt Senayan trikarya Graha agung Sedayu Group & Pt jakarta Propertindo Pt Intiland Development

#Units 217 220 220

rasuna Said Satrio Gajah Mada

CBD CBD West jakarta

Pt Hutama karya realtindo Pt Ciputra Property tbk Pt Bumi Perkasa Permai

153 170 tBa


Colliers International Indonesia - research

Demand
the occupancy level has regained strength after the holiday season during 3Q 2011. Some apartments for lease (serviced and unserviced) performed well at the end of 2011. Demand was largely made up of existing tenants who came back after the holiday from government institutions who had short course training (they typically reside for long periods which is more economical than hotel accommodation), and new expatriates from newly established companies in jakarta.

occUpancY of apartment for lease in certain locations


area CBD South jakarta Outside CBD serviced 3Q 2011 82.6% 76.6% 53.4% 4Q 2011 86.4% 80.8% 57.1% non-serviced 3Q 2011 83.0% 76.2% 68.9% 4Q 2011 84.1% 78.0% 69.0%

Colliers International Indonesia - research

p. 18

| colliers international

jakarta | 4q 2011 | apartment

South jakarta experienced the highest increment for each class of apartment for lease. Inquiries during the quarter mostly came from manufacturing company groups from japan. Meanwhile the non-CBD area witnessed limited demand because there are not many new developments. all in all with better expectations for further economic growth in 2012, inquiries

for the leasing market will still continue to be derived from the oil, mining, embassies, banking, insurance, telecommunications and finance industries. Leasing activities generated from short-stay tenants are expected to remain active particularly from business travellers and transient workers.

averaGe occUpancY of apartment for lease


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2006 2007 Serviced 2008 2009 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 average
Colliers International Indonesia - research

Unserviced

rental rates
Nothing changed during the quarter and the average rental rates of apartments for lease remained stable. However, since the majority of apartments for lease are offered using US dollar currency while the remainder is offered in local currency, the average rental rates in US dollars dropped somewhat due to the strengthening US dollar against the rupiah during the quarter. this is because all of the rupiah rates have to be converted to US dollars to get the overall number for average asking rental rates. average rental rates of apartments for lease (serviced and non-serviced) decreased modestly to US$13.73/sq m/month. the CBD area remained the market leader in asking rents of US$17.67/sq m/month, followed by South jakarta and the outside CBD which were at US$12.40 and US$8.80/sq m/month respectively. In terms of rental tariff per unit (on average), rental costs for serviced apartments were US$2,933/unit/month. the lowest rent of this type of apartment was US$1,571/unit/month, while the highest was US$5,260/unit/month. Meanwhile, average rental rates per unit for non-serviced apartments were US$1,619/unit/ month. the lowest rent started at US$1,000/ unit/month, and the highest was US$5,000/ unit/month. However, over the next year, quite a few apartment units for lease, particularly serviced apartments are planning to increase asking rental rates by 5 - 20%. the anticipation for inflation and increase in the regional minimum wages are the main reasons for increasing the rental tariffs. On the other hand, some nonserviced apartment developers are taking a wait and see position regarding the amount they intend to increase rental rates until they are sure of the percentage of rental increase decided on by serviced apartment operators.

colliers international |

p. 19

jakarta | 4q 2011 | apartment

averaGe rental rates of apartment for lease


$20.00 Rental Rate/sq m/month $16.00 $12.00 $8.00 $4.00 $0.00 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011

CBD

South jakarta

Non CBD

average
Colliers International Indonesia - research

Outlook
With continued increases in land prices and sound pre-sales performance, apartment prices are expected to further increase in 2012. this will largely take place in the CBD and South jakarta areas. thus far, prices of upper scale apartments have gone up quite substantially and they will likely climb along with heightening absorption rates. Looking at the projected supply of 2012, there are quite a few upscale projects which will also cause the overall prices to increase next year.

p. 20

| colliers international

jakarta | 4q 2011 | residential expat housing

residential expatriate housing sector


Expatriate Housing

Supply and rental rates


the stock of three-bedroom houses is very limited nowadays, if there is, many of this type are too small to meet expatriate standards. In fact, large of the houses suitable for to expatriate needs are four-bedroom houses. the average asking rental rate for expatriate housing in the second half of 2011 in certain areas has changed during the last six months, ranging from US$100 to 500. Furthermore, the high demand and limited stock has led to a situation whereby landlords are more dominant than tenants. On the corporate side, this situation is challenging because big corporations typically maintain their housing budgets unchanged. Instead of giving discounts, landlords prefer to offer lower rents provided that the lease term is a minimum of three years with advance payment. the average asking rental rate of expatriate housing in jakarta ranged from around US$2,000 to 7,000 per month. Certain primary areas even reached as high as US$15,000 (rp136.5 million) per month for renting a house. Such luxurious houses are typically found in the Menteng or kebayoran areas. Preferred expatriate locations remain in the southern part of jakarta particularly Pondok Indah, kemang, Cipete and kebayoran Baru. Menteng is also a favourite but house stock is very limited and further new houses are very few in this area, not to mention that large houses with a pool and ample yard have seen a severe increase in rents.

averaGe land prices in several eXpatriate locations


locations kuningan kebayoran Baru Menteng Pondok Indah Permata Hijau kemang Cipete Pejaten Cilandak averaGe land price/sQ m in rUpiah 20.8 million 24.5 million 28.7 million 18.0 million 17.9 million 10.0 million 8.6 million 8.8 million 7.4 million in Us$ (eQUivalent) 2,286 2,708 3,156 1,981 1,974 1,104 946 973 818
Colliers International Indonesia - research

colliers international |

p. 21

jakarta | 4q 2011 | residential expat housing

eXpatriate hoUsinG rental rates


locations kuningan 4 - 5 Bedroom House kebayoran Baru 4 - 5 Bedroom House 2 Bedroom townhouse/complex 3 - 4 Bedroom townhouse/complex menteng 4 - 5 Bedroom House pondok indah 4 - 5 Bedroom House 3 - 4 Bedroom townhouse/complex permata hijau, simpruk 4 - 5 Bedroom House 3 - 4 Bedroom townhouse/complex kemang 3 Bedroom townhouse/complex 4 Bedroom townhouse/complex 3 + 1 Bedroom House 4 - 5 Bedroom House Cipete 3 Bedroom townhouse/complex 4 Bedroom townhouse/complex 3 + 1 Bedroom House 4 - 5 Bedroom House pejaten 3 Bedroom townhouse/complex 4 Bedroom House Cilandak 3 Bedroom townhouse/complex 4 Bedroom townhouse/complex 3 + 1 Bedroom House 4 - 5 Bedroom House 280 - 400 300 - 700 300 - 600 450 - 750 2,000 - 3,500 2,250 - 6,500 2,500 - 5,500 2,500 - 7,000
Colliers International Indonesia - research

size (sQ m) 500 - 900 600 - 1,500 135 - 200 250 - 700 500 - 1,200 550 - 1,000 350 - 600 400 - 1,500 220 - 240 300 - 500 400 - 700 400 - 750 550 - 1,000 200 - 300 400 - 700 300 - 500 400 - 800 400 - 600 500 - 900

rental rates (in Us$/Unit) 3,500 - 11,500 3,000 - 15,000 2,500 - 3,500 3,000 - 6,700 3,000 - 9,000 3,500 - 15,000 3,000 - 4,500 2,500 - 12,000 2,500 - 5,000 3,000 - 4,500 3,500 - 5,500 3,000 - 5,000 3,500 - 7,000 2,000 - 3,500 2,750 - 6,000 2,500 - 3,500 3,500 - 7,000 1,500 - 7,000 3,000 - 7,000

Demand
During the second half of the year, housing requests continued to predominantly come from oil and gas companies. apart from that, for the last six months we have witnessed notable requests from a wholesale retailer from Germany, who will deploy a number of expatriates as part of their expansion plans in Indonesia. One major concern for expatriates with family when first living in Indonesia is the proximity to international schools so a location like Pondok Indah, which is in the same neighbourhood as jakarta International School (jIS), is very much in demand. However, there is not very much housing stock in this area. the simplest and most minimal housing model would be more easily rented as long as it conforms to the size of expatriate standards. typical Indonesian architecture is an advantage, particularly those homes which have incorporated Balinese or javanese values into the design.

p. 22

| colliers international

jakarta | 4q 2011 | residential expat housing

apartments

Supply and rental rates


rental rates of selected expatriate apartments were relatively stable during 2H 2011. the asking rent for a three-bedroom apartment located in the CBD ranged between US$1,500 and 5,800 / unit / month, while in a preferred location like South jakarta, the rental rate was between US$1,500 and 4,000 / unit / month.

apartment rental rates


locations sudirman 1 Bedroom apartment 2 Bedroom apartment 3 Bedroom apartment 4 Bedroom apartment kuningan 1 Bedroom apartment 2 Bedroom apartment 3 Bedroom apartment kebayoran Baru 2 - 3 Bedroom apartment 4 - 5 Bedroom apartment menteng 1 Bedroom apartment 2 Bedroom apartment 3 Bedroom apartment pondok indah 1 Bedroom apartment 2 + 1 Bedroom apartment 3 Bedroom apartment 4 - 5 Bedroom apartment permata hijau, simpruk 1 Bedroom apartment 2 Bedroom apartment 3 Bedroom apartment kemang 1 Bedroom apartment 2 Bedroom apartment 3 Bedroom apartment Cipete 3 - 4 Bedroom apartment Cilandak 2 Bedroom apartment 3 Bedroom apartment 3 Bedroom apartment 90 - 114 125 - 315 262 - 300 1,500 - 1,900 2,000 - 3,500 3,450 - 3,950 2,200 3,000 3,400 220 - 295 3,500 - 5,000 45 - 76 78 - 143 165 - 200 1,500 - 2,000 1,500 - 1,800 1,750 - 2,600 2,400 2,700 4,700 45 - 75 90 - 175 165 - 300 1,500 1,500 - 2,000 1,700 - 4,000 1,900 - 2,200 2,450 - 2,500 2,750 - 3,900 91 - 149 117 - 190 190 - 300 285 - 500 1,500 - 2,000 1,800 - 3,500 1,800 - 2,700 2,500 - 3,000 2,900 - 5,000 5,250 - 5,750 70 - 100 112 - 142 147 - 213 1,500 1,800 - 2,500 1,500 - 1,700 1,800 - 2,400 2,000 - 3,500 120 - 350 400 - 500 1,750 - 4,000 4,500 - 6,000 62 - 80 95 - 145 96 - 323 1,500 - 1,800 1,500 - 2,200 1,500 - 4,300 1,900 - 3,000 2,000 - 3,800 2,100 - 4,200 50 - 121 84 - 180 106 - 370 236 - 513 1,500 - 1,700 1,500 - 4,000 2,200 - 5,000 4,000 - 8,000 2,200 - 3,500 2,500 - 4,000 3,000 - 5,800 size (sQ m) rental rates (Us$/Unit) Unserviced serviced

Colliers International Indonesia - research

colliers international |

p. 23

jakarta | 4q 2011 | residential expat housing

Occupancy
Upper-class apartments generally had high occupancy rates of between 88 and 93%. this figure was somewhat stable compared to what was achieved in the previous semester.
averaGe occUpancY rate of selected apartments preferred BY eXpatriates
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% a
Notes: a: Dharmawangsa, Sailendra B: Four Seasons, Plaza Senayan, the Plaza residence C: the residence, Golf Pondok Indah, Bukit Golf, ascott, Menteng Executive D: aston, Permata Berlian, Puri Casablanca, Casablanca E: taman rasuna, Puri Imperium

average

Colliers International Indonesia - research

p. 24

| colliers international

jakarta | 4q 2011 | retail

retail Sector

Supply
Four retail centres with emphasis on lifestyle and entertainment officially opened in the closing quarter of 2011, bringing 107,000 sq m of retail space. this additional retail space brought the total annual supply for all of 2011 to 255,693 sq m in jakarta and greater areas (which includes jakarta, Bogor, Depok, tangerang and Bekasi), which is higher than last years figure of 166,006 sq m. the operation of these four retail centres brought the cumulative supply to 5.95 million sq m, reflecting a supply growth of 4.5% YoY.
jaBodetaBek cUmUlative sUpplY
8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F2013F 2014F Existing Supply annual Supply
Colliers International Indonesia - research

Despite the retail moratorium issued by the jakarta Government, the supply of retail space will still grow because all of the developments planned over the next years were legally permitted before the moratorium was announced. In 2012, the cumulative supply in the greater jakarta areas will grow by 5.6% with a total new retail space of 335,456 sq m.

jakarta sUpplY
Of nine retail centres with a total of 255,693 sq m operating in the jabodetabek areas during 2011, around 32% were located in jakarta. In 2011, there were four retail centres categorised as small-scale retail centres with total leasable areas ranging from 2,000 to 12,000 sq m including MtH Square which was opened in the first quarter. then after having no new supply in the second quarter, kalibata City Square opened in the third quarter. two other smallsize retail centres opened during 4Q 2011, area 51 (an extension of Pondok Indah Mall 1 PIM 1 carrying F & B concept) and a small retail space part of Green tebet Megablock located in jalan Mt Haryono. thus far supply for opened in November 2011 to support the mixed-use development. Only kuningan City lifestyle and entertainment centre which opened in late 4Q 2011 period comprises a sizeable space of 56,000 sq m. Historically, the annual supply in 2011 is the lowest for the last three years. It was only in 2007 when retail annual supply last fell below 100,000 sq m. Based on marketing scheme, along 2011, only MtH Square with 2,663 sq m was marketed for strata-title sale while the remaining 90% were offered for lease. Furthermore, MtH Square is the only strata-title retail centre opened for the last two years. During some periods, strata-title retail centres grew at a slow pace and in 2012 there will be only 4,475 sq m added to the inventory. By contrast, retail for lease retail centres grew by 499,125 sq m from 2010 to 2012. the diminishing number of strata-title retail is triggered by the low performance experienced by operating retail centres. Many of new strata-title developments are now built small in size and are aimed at supporting the surrounding development.

colliers international |

p. 25

jakarta | 4q 2011 | retail

jakarta cUmUlative sUpplY


1,000,000 800,000 600,000 400,000 200,000 0 CBD Central jakarta South jakarta North jakarta Cumulative Supply Up to 2010 Supply 2011 East jakarta 2012F
Colliers International Indonesia - research

West jakarta

jakarta eXistinG sUpplY Based on nUmBer eXistinG fUtUre

30,000 60,000 sq m 16%

> 60,000 sq m 12%

0 - 15,000 sq m 45%

> 60,000 sq m 18%

0 - 15,000 sq m 27%

15,000 30,000 sq m 27%

30,000 60,000 sq m 37%

15,000 30,000 sq m 18%

Colliers International Indonesia - research

Greater jakarta sUpplY


Supply grew significantly in the greater jakarta area with four retail centres opening in 2011. the new retail developments added 174,030 sq m which amounts to a growth of 10% YoY. Citywalk in Cikarang began operations earlier this year and was followed by two large-scale retail centres, Living World and tangerang City, both of which are located in tangerang. the newest is Phase two of Summarecon Mal Serpong which added around 40,000 sq m to the total inventory in 4Q 2011. the growth of retail supply in Bodetabek is predicted to continue over the next two years. During 2012 2013, it is expected that there will be 450,720 sq m of new supply in the greater jakarta area. Of this, only 19.5% will be operating in 2012. retail for lease centres (shopping malls) continue to dominate the market in the greater jakarta area. Out of a total 1.91 million sq m of cumulative supply up to 4Q 2011, 59% was offered as shopping centres for lease. Meanwhile, in 2011 less than 10% was marketed for sale, all of it located in tangerang City. retail centres operating in the third quarter provided 20% of their net area for sale which is similar to the situation in the coming year. In the Bogor area, only Plaza Dua raja will be marketed for sale but this shopping centre seems to have problems since early 2011 and is still postponing operations due to a dispute with the traditional traders.

p. 26

| colliers international

jakarta | 4q 2011 | retail

Greater jakarta cUmUlative sUpplY


1,000,000 800,000 600,000 400,000 200,000 0 Bogor Depok Cumulative Supply Up to 2010 tangerang Supply 2011 2012F
Colliers International Indonesia - research

Bekasi

fUtUre retail
Within two years from 2012 to 2013, it is projected that there will be 21 new retail centres operating in the greater jakarta area. these retail centres will provide a total of 827,376 sq m of retail space of which 45% or 376,656 sq m will be located in jakarta. Of the projected supply mentioned above, half have completed more than 50% of the construction. among them are kota kasablanka, Ciputra World jakarta and kemang Village which are scheduled to be completed and in operation in 1Q or 2Q 2012. a significant number of retail spaces will pop up in 2012. Four new retail centres located in the southern part of jakarta will bring another 217,781 sq m to the market. From our field observations of the construction progress, it is likely that they will be able to meet the schedule in 2012. retail centres projected to be in operation in 2012 include a small-scale retail centre called Menteng Square, a retail arcade within the residential compound consisting of four apartment towers located around jalan Proklamasi and jalan Salemba raya, Central jakarta. another centre called Pondok Indah Mall Street Gallery is located adjacent to Pondok Indah Mall 1 and is part of the whole retail compound. In 2013, East jakarta will have a new mall in the kalimalang area called Cipinang Indah Mall. During the reviewed period, two new names appeared i.e. Urbana Lifestyle Mall located in Cinere and Cibinong City Mall located in Cibinong, Bogor. Urbana, the recent product of Megapolitan is located in Cinere. While Cibinong City Mall, located in Bogor. In tangerang, a shopping mall at alam Sutera has finished the building structure and is expected to be operating in 2012. In addition, Metropolitan Grand Mall located in Bekasi and owned by Metropolitan Land will have a ground breaking at the end of 2011. the growing residential areas which have triggered the increase in population is one of the driving factors for more shopping centres to be built. In order to capture this segment, quite a few shopping centres are designed as neighbourhood shopping centres. the moratorium policy to limit retail growth in the capital city would allow more opportunities for developers to expand outside of jakarta.

colliers international |

p. 27

jakarta | 4q 2011 | retail

list of fUtUre shoppinG centres

shoppinG centres name Jakarta area 2012 kemang Village Menteng Square kota kasablanka Pulomas XVenture Ciputra World jakarta Pondok Indah Street Gallery 2013 Cipinang Indah Mall Green Bay Pluit St Moritz 2014 Mall at the City Centre greater Jakarta area 2012 Plaza Dua raja Shopping Mall alam Sutera 2013 the Breeze Sinar Mas Land Urbana Lifestyle Mall Cibinong City Mall Cimandala City Mall Cimandala City trade Mall Mal Harapan Indah Bekasi junction Bekasi trade Centre 2 Citra Gran Mall Extension Metropolitan Grand Mall 2014 Summarecon Bekasi (Phase 1) Bintaro Lifestyle Centre Cipinang Pluit antasari

location

reGion

nla (sQ m)

statUs

South jakarta Central jakarta South jakarta East jakarta South jakarta South jakarta

56,052 Under Construction 4,475 Under Construction 74,629 Under Construction 25,200 Under Construction 78,000 Under Construction 9,100 Under Construction

Proklamasi kasablanka Pulomas Satrio Pondok Indah

East jakarta Pluit West jakarta

20,000 Under Construction 52,000 Under Construction 57,200 Under Construction

Puri Indah

kH Mas Mansyur

Central jakarta

60,000 Under Planning

Bogor tangerang

20,000 Under Construction 68,000 Under Construction

tangerang Cinere Bogor Bogor Bogor Bekasi Bekasi Bekasi Bekasi Bekasi

24,300 Under Planning 30,000 Under Planning 30,000 Under Planning 60,000 Under Planning 50,000 Under Planning
Colliers International 44,420 Under Planning Indonesia - research

14,000 Under Planning 30,000 Under Planning 20,000 Under Construction 60,000 Under Planning

Bekasi tangerang

50,000 Under Planning 15,000 Under Planning


Colliers International Indonesia - research

p. 28

| colliers international

jakarta | 4q 2011 | retail

Demand
jakarta area
the occupancy rate in jakarta was 84.7% as of the end of 2011 which reflects a moderate drop compared to the previous quarter. the downturn was mainly due to the termination of operations by some retailers during the quarter. two retail centres which have been operating since the 80s lost quite a few tenants. a retail centre located in Melawai, South jakarta, experienced a high vacancy in particular on the top floor after some F&B retailers pulled out. a similar situation was also experienced by one retail centre located in the Central jakarta area. In addition, we saw that some retail centres in West jakarta lost some of their tenants. In East jakarta, a retail centre located in the rest area of highway also recorded a downturn in occupancy due to the closing of some F&B outlets. Despite all of the vacated retail space, quite a few middle- to upper-class shopping centres are still enjoying healthy performance with occupancy reaching above 90%. tenants like amazing Places, jewel of Eden and Childrens Store have leased space at Pacific Place Mall, a premium shopping mall in the SCBD. across from Pacific Place mall is fX Lifestyle Xnter which filled the upper floor with fashion retailers while Body Shop, Hanamasa, Do It Best Pongs (replacing the space vacated by Farmers Market) have confirmed that they will open in 2012. Similarly, Plaza eX located in jalan MH thamrin has secured new tenants like Bengawan Solo, Pinot Bakery, Nutz and Wayang Force. Meanwhile, one of shopping destinations in Senayan i.e. Plaza Senayan has officially brought in Cost, Standard Denim, Chic, Little Moe, Mont Blanc, Mondial, La Perla and amante. Of the middle-class shopping centres, Pasar Festival brought in local retailers like Bakso Malang karapitan, Chicken Story and Yoshinoya. Pasaraya Grande in South jakarta is having kampong Main as their new tenant. In Central jakarta new tenants like Erafone as well as another pet shop and fashion retailers opened in Gajah Mada Plaza. In East jakarta, kramat jati Indah after being refurbished continues to attract new tenants. this shopping centre is currently focusing on setting up a zoning for a new concept as a family and entertainment mall. the grand opening will take place around 2Q 2012. Electronic City appears as new tenant to follow time Zone. Meanwhile, XXI cinema will open in the middle of 2012. Citraland Mall, a shopping mall located in West jakarta closes this year leaving less than 1,000 sq m space available. In the middle of 2011 Gunung agung Bookstore was out but new tenants came in including Warung Leko, Yoshinoya, Gohkana restaurant, Burger king, Best Denki, Blackberry Shop, Goldmart and Menstop. In addition to that, the existing tenants including Pizza Hut, Bengawan Solo and telesindo also expanded taking more space in the mall. Leasing transactions for space available in the next year occurred in the last quarter of 2011. In the middle of December 2011, Lotte Mart signed an agreement to occupy around 10,000 sq m at kuningan City while Grand Paragon in jalan Gajah Mada has secured new tenants for 2012 including Grand Lucky (2,000 sq m), ace Hardware (1,575 sq m) and amazone (1,455 sq m).

Greater jakarta area


the occupancy rates of retail centres in the greater jakarta area show an upward trend YoY closing at 84.4%. Margo City Mall located in the main street of Depok City has acquired several new tenants including toys kingdom, Office One, ace Hardware and Watsons (selling healthcare and pharmacy products). In the same area, Depok Mal, continued to receive more F&B tenants including Bakso Malang karapitan, Platinum restaurant and Bakmi GM who will officially become tenants in 2012.

colliers international |

p. 29

jakarta | 4q 2011 | retail

fUtUre demand
all retail centres which opened in 2011 showed a modest occupancy performance of 82%. Meanwhile, retail centres scheduled to open in 2012 have enjoyed a 70% pre-commitment level, a relatively good performance considering that all of the centres are still under construction. this number is very much fuelled by two retail centres located within the CBD area which have reached a pre-committed occupancy of 75% on average. Noted department stores like Debenhams, Lotte and Sogo will be occupying several major new developments in the future. they are followed by other active retailers including Gramedia, Burger king, Carrefour, Electronic Solution, Matahari, Fitness First, Best Denki, and ace Hardware who will occupy many future malls. additionally, kemang Village Mall is scheduled to open next year with a leasable area above 50.000 sq m has reported that Debenhams department stores has joined as their anchor tenants. Debenhams, together with other department stores like Sogo, Lotte and Centro in different locations will invigurate the competition of department stores. Home furnishing and electronics stores such as ace Hardware, Electronics Solution and Best Denki will also open at four retail centres belonging to four different well-known developers in jakarta. a branded hypermarket will also be added in
pre-commitment level dUrinG 2011 - 2013 jakarta area
absorbed Supply

2012. Carrefour will open in a retail centre located around East jakarta. In the greater jakarta area, some future shopping centres have engaged with several retailers and reached a high pre-commitment level. Some well-known active retailers include Sogo, Gramedia Book Store, Electronic Solution and Farmers Market. the leasing transactions of 2012 will continue to perform in 2013. two retail centres are ready to start the construction process and have captured major tenants as their anchors. the Mall at St. Moritz in West jakarta officially secured Debenhams as the anchor tenant, while outside jakarta, Grand Metropolitan will be officially occupied by Centro, Farmers Market and toy kingdom. Foreign retailers are also active and they are keenly looking for local partners to expand their business in Indonesia. Sahid Group, a local hotel chain operator, will open five johnny rockets restaurants in Indonesia within the next five years, two in Bali and three in jakarta. this restaurant is planning to open in 2012. Parkson department store will expand to Indonesia, and will open in several major cities such as jakarta, Medan and Surabaya aiming at Indonesian upper-class shoppers.

Greater jakarta area


absorbed Supply

2013F

2013F

2012F

2012F

2011

2011

100,000 200,000 300,000 400,000

100,000 200,000 300,000 400,000

sq m

sq m
Colliers International Indonesia - research

p. 30

| colliers international

jakarta | 4q 2011 | retail

list of committed tenants in fUtUre shoppinG centres in jakarta

shoppinG centres name Jakarta area area 51

committed occUpancY 75%

statUs Pepper Lunch, Yoshinoya, Meat Bar, kopitiam, Ichiban Sushi, Y&Y Steak Depo, Starbucks, Cold Stone, Barleys Beer, auntie anne, Hanamasa, Pandan Village, Fat Burger, teritori, Smooch Yoghurt

Cipinang Indah Mall Ciputra World Green tebet kemang Village

25% 100% 50% 70%

Carrefour (5,850 sq m) Lotte Department Store (6,000 sq m) Burger king, Starbucks, Warung Leko, Dominos Pizza, Steak 21, Sapo Oriental and Sago kitchen. ace Hardware (1,400 sq m) Debenhams (17,500 sq m), Zara, Next, Marks & Spencer, kidz Station, Starbucks, Burger king, Dominos Pizza, Hypermart (4,000 sq m), ace Hardware (2,300 sq m), Fitness First, Cinema XXI

kota kasablanka

50%

Sogo (19,000 sq m), ace Hardware (2,500 sq m), XXI, Electronic Solution, kem Chick, Carrefour (8,000 sq m), Informa (5,000 sq m), toys kingdom (1,100 sq m), Muji Store (400 sq m)

kuningan City

85%

Lotte Mart (10,000 sq m), Gramedia, Best Denki, Cinema XXI, Electronic Superstore, Flame karaoke, Lollipop Playland, amazing Zone, ace Hardware (1,200 sq m), jatomo Fitness

St. Moritz

50%

Debenhams (17,000 sq m), Zara, Next, Marks & Spencer, kidz Station, Starbucks, Burger king, Dominos Pizza, Matahari, Hypermart, Electronic City, Cinema XXI, ranch Market, Sea World Indonesia, tony romas, kiyadon Sushi, the Coffee Bean and j.Co

greater Jakarta area alam Sutera Grand Metropolitan Summarecon Mall Serpong 2 90% 70% 85% Sogo Department Store, the Food Hall, Fun World, Mango Farm, Gramedia, Cinema XXI, Chipmunks Playland & Cafe, Electronic Solution, Home Solution Centro, Farmers Market, toys kingdom, Fun World, Sate khas Senayan, Optik Melawai Eat and Eat (1,500 sq m), Centro Department Store, Best Denki, Do It Best Pongs Home Centre (3,000 sq m)
Colliers International Indonesia - research

rental rates and Service Charge


rental rates jakarta area
rental rates in jakarta were relatively stable during all of 2011. as of the end of the year, average asking rental rates for typical floor (excludes ground floor and space rented by anchor tenants) were rp350,492/sq m/month. to date many landlords are reluctant to raise asking prices because they generally want to focus on raising the occupancy levels. On the other hand, projects with high occupancy are more selective in deciding new tenants they want in their shopping centre particularly that it should have impacted project image as well as it should be able to increase the number of crowd to the centres.

colliers international |

p. 31

jakarta | 4q 2011 | retail

Looking at the good performance of the under construction retail centres, it is likely that asking rental rates will be adjusted next year. Overall, the average asking rates will move strongly upward, particularly because of the influx of upscale shopping centres with rental rates above the average market. Indeed, the overall performance of the retail market has given insight to the landlords of operating retail centres to adjust the asking rents which would

possibly materialise in the middle of 2012. From our findings, there are so far six shopping centres in jakarta which indicated that they will adjust their asking rental rates in the range of 10 to 30% next year. Likewise, we also found that four shopping centres are working to rejuvenate their premises in order to improve the performance of their centres and consequently will charge higher rents.

averaGe askinG rental rates of different class shoppinG centres in jakarta


rp700,000 rp600,000 rp500,000 rp400,000 rp300,000 rp200,000 rp100,000 rp0 2005 2006 2007 Middle 2008 2009 2010 on average
Colliers International Indonesia - research

2011

Middle Upper

Middle Low

Greater jakarta area


Nothing much changed in the greater jakarta area with relatively flat asking rental rates for some quarters. average rental rates stayed at rp253,173/sq m/month for typical floor areas. However, compared to last year, rental rates have gone up modestly by 5.1%. although there are signs of an increase ranging from 10 to 20% at shopping centres located in Bekasi and Depok, we do not expect significant changes for the average rental rates in the coming year.

service charGe
Similarly there have been minor changes in the service charges during the end of the quarter. Only two retail centres raised their service charge tariffs. to improve services for visitors, one retail centre in Setiabudi, South jakarta, increased service charges by 10% QoQ. In addition, a shopping mall situated in kramat jati, East jakarta raised its service charge by 35%. Overall services charges in jakarta were rp73,541/sq m/month which is higher by 7.32% YoY. In the greater jakarta area, service charges were increased modestly to rp60,236/sq m/ month. the only change we registered this quarter is the increase made by Metropolitan Mall located in south Bekasi by around 10%.

p. 32

| colliers international

jakarta | 4q 2011 | retail

averaGe service charGe of different class shoppinG centres in jakarta


rp120,000 rp100,000 rp80,000 rp60,000 rp40,000 rp20,000 rp0 2005 2006 2007 Middle 2008 2009 Middle Low 2010 average
Colliers International Indonesia - research

2011

Middle Upper

Outlook
Indonesia, the worlds fourth most populous nation with around 240 million people, is a lucrative market for retail businesses. Global retail brands (including Sogo, Carrefour, Metro Cash & Carry, Giant, Lotte, Mini Stop, etc.) are seeking to expand in the country due to its huge market and rising purchasing power thanks to stable economic growth. Indonesias retail sector will start to demonstrate solid growth next year despite escalating global uncertainties, with revenues expected to rise. the growth will be mainly driven by sales of consumer goods such as food and beverages, fashion items and electronics products. the World Bank Indonesia Economic Quarterly report showed that the middle class population with a minimum spending of US$2.00 / day grew by 61.7% to 131 million in 2010 from 81 million in 2003. the growth of the middle class community has tempted retailers to expand their business operations.

colliers international |

p. 33

jakarta | 4q 2011 | industrial estate

Industrial Estate Sector

Lack of Supply amid Continued Inquiries


a frequent phenomenon in most industrial estates is the continuing inquiries for industrial land versus the limited stock of land on offer. For the last two years, land scarcity has been a classic problem for most industrial estates and the substantial leap in land demand during 2011 is the peak of this entire problem. In some industrial estates, it was reported that potential buyers seeking industrial land have knocked on their door almost every day but most of the time it ends up with no transaction. amid the landlord market situation, some developers decided to sell raw land at the price of ready-to-use land. Buyers are taking the position of acquiring raw land at the current price anticipating a further increase when land is offered in a ready-to-use condition. they are now willing to buy raw land (at the ready-touse price) and wait another year before the landlord delivers the land with all of the infrastructure. In our records there were some industrial estates in Bekasi and karawang areas applying such a policy. the major problem is that the flow of supply cannot forestall the speedy demand. Preparing ready-to-use industrial land may take a year and the challenge for construction is unpredictable weather (which was the major problem in 2010) and high costs. One industrial estate in karawang mentioned that to move into the next level of selling, the subsequent phase of development has always been a challenge with the given conditions of the hilly land they have because it involves a high cost. One industrial estate in Cikarang area for example, took over around 23 hectare of land (non-saleable industrial land from the neighbourhood industrial estate to compensate the potentially saleable green area in their estate. this was done because they need to anticipate continued land inquiries in their project. throughout 2011 there was almost a negligible amount of new industrial land being offered in the market. Many landlords are still selling their existing land, but several have anticipated 2012 with new industrial land to be offered. For example, one industrial estate in Serang has prepared around 100 to 120 ha. Still in the same location, one industrial estate has indicated that it will develop another 200 ha but did not mention a definite timeframe for completion. a more confident statement was from one industrial estate in Bekasi saying that there will be around 50 ha of new industrial land available. Basically, quite a few industrial estates have land banks to be developed but the delivery time is another issue. With only selling the remaining land available, total sales for 2011 should have been greater. For example one industrial estate in karawang area has only 6.58 ha to sell in the form of four land plots. In the same region, one industrial estate belonging to the government reported that they have only 67 ha left. Meanwhile, two industrial estates in Bogor confirmed that they both have only a total of 15.53 ha land for sale and for lease. In Cikarang area, one big industrial estate reported that they have only 86 ha left out of a total saleable 749 ha due to continued absorption in the last two years. In short, lack of industrial land for sale remains a widespread problem in most industrial estates. In Serang, one new industrial estate, kawasan Industri terpadu MGM indicated that they have plans to open in 2012 but have yet to confirm a definite time for delivery. Should it materialise, the estate of around 662 ha would invigorate the market and add to the current total industrial land stock which remains at 8,666.3 ha.

p. 34

| colliers international

jakarta | 4q 2011 | industrial estate

distriBUtion of indUstrial land in siX reGions

Serang 21%

jakarta 10%

Bogor 2% Bekasi 26%

karawang 36%

tangerang 5%
Colliers International Indonesia - research

a Giant Leap in Demand


total industrial land sales for all of 2011 soared tremendously by 228% compared to the total sales in 2010. as of the end of the year we have recorded total transactions involving 1,238.73 ha in the six regions (jakarta and greater area including Bogor, Bekasi, karawang, tangerang and Serang). this figure went well beyond the 542.91 ha of land sales registered
annUal indUstrial land sales
1400 1200 1000 hectares 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

for 2010. the sign of a vibrant market has been in evidence since the first semester of 2011 when sales for the half-year outstripped total sales in 2010. accordingly, with the combination of land scarcity as mentioned above, some indicators such as land prices and take-up rates have moved forward.

Colliers International Indonesia - research

land aBsorption dUrinG 4Q 2011


total industrial land sales for 4Q 2011 is the highest compared to the previous quarters of 2011 and this has been a common pattern in the industrial market where sales jump at the end of the year. total land being transacted this quarter was recorded at 408.69 ha, higher than the 370.28 ha recorded in 1Q 2011. two areas, i.e. Bekasi and karawang, contributed most of the transactions this quarter. In Bekasi, total sales of 189.95 ha was from Greenland (116 ha), Bekasi Fajar (49 ha), Delta Silicon (12.85 ha), jababeka (9.3 ha) and MM2100 (2.8 ha). the substantial land sales in Greenland (kota Deltamas) was mainly derived from seven companies from japan and one local company in the automotive business. Bekasi Fajar sold land to their neighbour as compensation for the green area that the latter wished to sell while other significant transactions were made by a motorcycle producer from japan and a few automotive companies. total sales in Delta Silicon in 4Q was the lowest in 2011 but still

colliers international |

p. 35

jakarta | 4q 2011 | industrial estate

managed to record 12.85 ha composed of 10.7 ha of a chocolate factory and other small transactions done by developer to built SFB (Standard Factory Building) for sale. Meanwhile, sales recorded by jababeka comprised mainly transactions from auto-related industries and manufacturing and pharmaceutical companies. In MM2100, an automotive parts company and a frozen food company shared half of the total transactions made during the reviewed quarter. In the karawang region, kIIC led in the amount of land being transacted at around 59 ha; however, we are not able to identify two big transactions of around 31 and 15 ha due to the confidentiality agreement. the remaining smaller four transactions were done by businesses in the auto-parts industry. In the second rank, Suryacipta continued to make deals with auto-parts industry companies (four transactions), two steel-related companies and two pharmaceutical companies which altogether totalled 39.3 ha. kota Bukit Indah (Besland Pertiwi) sold a total of 20 ha of land to three auto-related companies and leased land an industrial building to an auto-related company as well. kI Mitrakarawang (kIM) completed a total of 6.36 ha of land where 4.5 ha was concluded by a local automotive industry. the last transaction made in karawang was concluded by kota Bukit Indah (Indotaisei) which concluded the sale of around 5.4 ha of land to astra Group. this was a surprising

transaction made by Indotaisei because the shape of the land plot is not ideal and was previously allocated for greenery. But because it is challenging to find industrial land within the estate at the moment, anything available is saleable. another active region is Serang where the two most active industrial estates operate. Modern Cikande saw a total transaction of 28.7 ha mainly made by Charoen Pokphand (12 ha). Six other smaller transactions were made by a food industry, two steel-related industries, one pharmaceutical, one industrial tools and one building material industries. kIEC, owned by the biggest national steel producers, recorded a total of 17.6 ha land comprising two steelrelated industries and one food industry. transaction activities in tangerang were relatively moderate either because of the lack of land to sell or a few industrial estates which are being used by their own group of companies. Only Millenium, which has plenty of land to be sold. During the quarter one automotive and one food industries composed a total of 40 ha of transaction in Millenium. Meanwhile, of the two industrial estates operating in Bogor, only Sentul Industrial Estate sold a total of 1.8 ha comprising three small parcels done by a medical equipment showroom, a printing company and the sole of a shoe factory.

land aBsorption dUrinG 2011


Suryacipta led the total sales for 2011 with most of the transactions made by automotive industries (70.6%) followed by consumer goods, steel-related and pharmaceutical companies. In second position was Greenland at kota Delta Mas with 100% of their transactions made by automotive and auto-related companies. Delta Silicon in Cikarang registered the highest number of transactions since the total of 163.81 ha they concluded was composed of many small transactions. the biggest transaction was made by Hankook tyre of around 60 ha. Other smaller transactions were made by logistics, warehouse and F&B industries. three other industrial estates with significant transactions included Bekasi Fajar (predominantly concluded by automotive industries at 39%) followed by jababeka (made mostly by automotive, consumer goods, manufacturing and pharmaceuticals) and kIIC.

p. 36

| colliers international

jakarta | 4q 2011 | industrial estate

land sales recorded dUrinG 2011 in each indUstrial estate


Suryacipta Greenland (kota Delta Mas) Delta Silicon Bekasi Fajar kIIC jababeka kota Bukit Indah Modern Cikande Millenium krakatau Industrial Estate Cilegon kI Mitrakarawang MM2100 Industrial town kujang Industrial Estate kota Bukit Indah (Indotaisei) CCIE kBN 0 50 100 150 200 250 hectares

Colliers International Indonesia - research

cUmUlative sUpplY, demand and take-Up rates


10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Cumulative Supply (ha) Cumulative Demand (ha) 2011 take-up rate (%)
Colliers International Indonesia - research

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

With more than 52% of the overall sales in 2011, automotive and related industries remained the key drivers for industrial land sales. Up to 2011, transactions concluded by automotive industries accounted for a total of around 642 ha. the majority of land transactions by automotive and

related industries occurred in either the Bekasi or the karawang area. another dynamic industry during the reviewed year (in order) were steel-related, F&B, tyres, logistics and warehousing, consumer goods, pharmaceuticals and manufacturing industries.

colliers international |

p. 37

jakarta | 4q 2011 | industrial estate

tYpes of active indUstries in 2011


Chemicals 1.5% Electronics 0.3% Heavy Logistics/ Metal Equipment Warehouse 0.1% 0.8% Clothing Molding 0.8% 4.7% 0.5% PackagingMachinery Manufacturing 0.5% Building 0.5% tyres 2.2% Material textiles 4.9% 0.6% 0.5% Developer 1.2% Others 11.1%

Steel-related 4.9% Pharmaceutical Printing 2.8% 0.1% Plastics 0.8% Consumer Goods Food & 4.1% Beverage 4.9%

automotive 52.2%
Colliers International Indonesia - research

Industrial Land Prices


Having reviewed the supply and demand performance, Colliers is not surprised to witness land prices rocketing by an average of 40.4% YoY. the karawang region recorded the highest jump of almost double (97.8%) that of last years figure while Bekasi registered a 61.6% jump. the determinant factors (supply and demand performance) have kept industrial land prices moving up. Industrial estates in karawang continued increasing their land prices. In this quarter alone, the market has witnessed price increases of 18.9% QoQ. almost all industrial estates in karawang introduced new prices. Continued inquiries and the scarcity of industrial land in this region pushed developers to raise land prices. Meanwhile, Bekasi saw a modest percentage of land price increase, at 5.6% QoQ. this relatively small increase was due to land prices in this area already being higher than other regions. three industrial estates initiated new land prices during the reviewed quarter. But reviewing the overall figures for the full year, the price increase in Bekasi was significant and the Bekasi region commanded the highest land prices compared to other regions excluding jakarta. two major industrial estates (Modern Cikande and kIEC) in Serang caused the most significant changes in the price of industrial land. Compared to last quarter, prices rose by 8.6%, mainly from adjustments made by Modern Cikande. Price increases compared to last years (2010) figures were up by 20.0%, in both estates. In Bogor, land prices increased by 14.7% YoY, while in tangerang, adjustment was made by Millennium during the quarter. Overall, compared to last year, prices in tangerang went up by 26.7%. Colliers expects that the continued upward trend of land prices will still take place in 2012. From our findings in the field, one industrial estate in Serang is planning to introduce higher prices next year with the expectation that sales will continue to move upward. another industrial estate in Bekasi has prepared for a price increase in 2012 although they already captured high price in the region. also, still in Bekasi, one major industrial estate has formulated prices to increase by 10% per year while another main industrial estate has indicated that it will raise their land price to US$150/ sq m in 2012. Meanwhile in tangerang, one industrial estate is set to raise its price from the previous rp800,000 to rp1 million/sq m/month in 2012.

p. 38

| colliers international

jakarta | 4q 2011 | industrial estate

indUstrial maintenance cost

Overall, maintenance costs stood at the same level as last quarter, with the only adjustment being made by one industrial estate in karawang area from US$0.05 to US$0.06/sq m/month. this adjustment, because it was very moderate,

maintained the overall average maintenance cost as in 4Q 2011. Meanwhile, one industrial estate in karawang has anticipated 2012 by adjusting their service charge cost from rp350 to rp400/sq m/month.

Greater jakarta indUstrial maintenance costs


$0.10 $0.08
US$/sq m/month

$0.06 $0.04 $0.02 $0.00 1Q 2009 2Q 2009 Bogor 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011

tangerang

karawang

Bekasi

Serang

Colliers International Indonesia - research

indUstrial land prices and maintenance costs*

region Bogor tangerang karawang Bekasi Serang


*1US$ = rp 9,000

Land Price (sq m) Lowest US$ 50.00 US$ 60.00 US$ 80.00 US$ 133.33 US$ 72.22 Highest US$ 166.67 US$ 166.67 US$ 120.00 US$ 166.67 US$ 94.44 average US$ 108.33 US$ 117.56 US$ 108.22 US$ 150.33 US$ 83.33

Maintenance Cost (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 US$ 0.03 Highest US$ 0.08 US$ 0.11 US$ 0.06 US$ 0.07 US$ 0.05 average US$ 0.07 US$ 0.06 US$ 0.06 US$ 0.06 US$ 0.04

Colliers International Indonesia - research

Outlook
the shortage of land will remain the challenge for the industrial market at least up to the second quarter of 2012 while requests for industrial land will continue. thus, the combined factors will still drive prices to further adjustments. Several industrial estates have been steadfast in their planning to accelerate prices in which may tempt the remaining estates to conform. In our assessment, industrial prices will edge higher by at least 15% next year with three main regions i.e. karawang, Bekasi and Serang remaining as the main causative factor for prices to increase. Putting forth the worst case scenario, if the land sales during 2012 are only half of the total sales in 2011 then it will remain problematic if the main industrial estate operators cannot provide enough supply. In short, the greatest challenge for next year is not the demand, because the Indonesian economy will strongly move on in particular after the Fitch ratings agency upgrade from sovereign debt risk for the country to investment grade. the challenge lies in how to anticipate demand amid the lack of supply.

colliers international |

p. 39

jakarta | 4q 2011

512 offices in 61 countries on 6 continents


United States: 125 Canada: 38 Latin america: 18 asia Pacific: 214 EMEa: 117

$1.5 billion in annual revenue 979 billion square feet under management Over 12,500 professionals

colliers international indonesia: World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 faX 62 21 521 1411 Michael Broomell Managing Director World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 faX 62 21 521 1411 Ferry Salanto associate Director, research World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 faX 62 21 521 1411
Copyright 2012 Colliers International the information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

accelerating success.

www.colliers.co.id