NOW! JAKARTA | Jakarta Property Trends
Jakarta Property Trends

Jakarta’s cityscape has changed significantly over the past decades, with new skyscrapers, office buildings, apartment towers, shopping malls and hotels dominating not only the Central Business District, but also its surrounding areas.

As an international property consultant, Colliers International Indonesia is part of Colliers International, the world’s third largest commercial real estate organization with 554 offices in 66 countries. Since its founding in 1988, Colliers International Indonesia has developed into the largest property consultancy in the country.

In its recently published “Colliers Quarterly”, the organization takes a look at the property market trends in Jakarta across different sectors.

Office Sector
Net demand weakened in 2016 and at the same time some existing office buildings currently maintained huge available spaces. For the first time since Q2 2015, not having any additional supply within the last two quarters in 2016 (some office buildings rescheduled completion) helped increase occupancy QoQ in the CBD. Rents continued to slide. Landlords offer softening rents in line with the tenant’s market situation.


In 2016, the CBD area was without additional supply in the last two quarters. Cumulative supply remained stable at 5.48 million as of Q4 2016. The projected supply in 2017 increased to 731,164 sq m due to relocating office buildings that expected to meet completion in 2016. Meanwhile outside the CBD, two office buildings in TB Simatupang began operations in 2016. Outside the CBD excluding TB Simatupang, six office buildings contributed an additional 157,297 sq m supply in 2016. TB Simatupang will see a limited future supply in 2017.

Occupancy continued to show a decreasing trend. Occupancy declined 4% the CBD, falling by 5.8% outside the CBD, YoY. TB Simatupang currently recorded occupancy at 79.2% and remained relatively flat YoY. Occupancy is expected to see tougher days in 2017.

Decreasing premium rent hit the average rent of lower classes office buildings, particularly Grade B and C office buildings, which dropped 20% YoY. Increasing rents were contributed by three newly operating office buildings outside the CBD that confidently offer rents above market prices.

Apartment Sector
Measures introduced in 2016 were meant to boost property demand, including six policy rate cuts, relaxation for second home buyers and tax cut final sales tax for developers (to 2.5% from previously 5%), and on title transfer, on the acquisition of rights to property (BPHTB). Nonetheless, the overall takeup rate, particularly for projects under construction, has not improved significantly. In the current soft market, developers tended to set the price carefully in order to keep sales active and attract potential buyer, but were unsuccessful. However, several developers still have positive perception toward the market, as reflected by the number of newly introduced and launched projects in the end of the year, with 3,972 units, more than doubled the previous quarter’s number.


We expect a huge supply of newly completed apartments in the next two years, with 28,014 and 24,298 units in 2017 and 2018, respectively. By location, apartment stock will be concentrated in West Jakarta and South Jakarta, representing around 22% and 20%, respectively.

We foresee an improvement in the demand for apartments in the next year, due to the impact of a set regulation relaxation introduced in 2016, as well as better macro environment in 2017.

We expect further easing in the rental of apartments for lease amid a weak demand. With the market generally looking pessimistic, management continues to offer rental discounts ranging between 10% and 15% from the asking rents

Expatriate Housing Sector
The tenants’ market situation continued to happen during the whole year of 2016 as a result of diminishing number of expatriates working in sectors that have been shore up expatriate housing business, such as oil and gas and mining industry. On the other hand, besides South Jakarta, BSD (Bumi Serpong Damai) and Lippo Karawaci have good potential as secondary choices as those areas are still within the catchment of the expatriate community and proximity to the international school as well as easy accessibility to Soekarno-Hatta International Airport.

Today, the number of houses being offered in the sublease market is a lot due to some multinational companies have had to cancel projects or have decided to pull back on projects which has resulted with early termination of the expatriates they hired. Further, the current market situation creates opportunities for the tenants to get competitive rental rates of homes that offer more value for their rental budgets from the sublease market.

Retail Sector
Almost one million sq m of total future supply is expected to come from JaBoDeTaBek between 2017 and 2019. However, less than 50% of this projected additional supply is under construction in 2016. Newly operating shopping centres have secured highly committed tenants. Most of them opened already and helped the overall occupancy improve despite slightly. Food and beverages continued to become demand generator.


Four shopping centres began operation and brought an additional 121,000 sq m supply in 2016. These four shopping centres delivered a cumulative supply of 4.57 million sq m, showing a 2.7% increase YoY. Jakarta is expected to see two future shopping centres and bring a projected additional supply of 68,000 sq m in 2017. Meanwhile, two shopping centres began operation in Greater Jakarta in 2016. The cumulative supply was registered at 2.47 million sq m, showing a 4% growth YoY. More shopping centres are expected to be developed in Greater Jakarta, most of which are still in planning stage, including future supplies in Jakarta.

Most newly operating shopping centres have secured about 85% commitment occupancy before opening. However, only less than 50% of the total committed absorption was occupied by the end of 2016. Food and beverages will continue to perform its role as demand generator, whilst supermarket, home furnishing and entertainment (cinema) continue to expand.

After slumping at three previous quarters, this was the first time occupancy registered an increase at 85.4% in Q4 2016. As forecasted, occupancy is likely to continue increasing in 2017, with smaller additional supply. Occupancy fluctuated during 2016 in Greater Jakarta. A large number of additional supplies caused occupancy to decline 2% to 82% for the rest of 2016.

Rents grew 4.1% YoY to IDR563,238/sq m/month in Jakarta, whilst Greater Jakarta showed a moderate increase at IDR344,734/sq m/month. Asking rent is forecasted to increase in 2017, mainly contributed by upper class shopping centres in Jakarta. Sales volume will largely impact projected asking rents.

Hotel Sector
The hotel market performed relatively poorly throughout 2016, based on the occupancy and room rate indicators. As business condition has yet to recover due to the fairly low hotel room enquiries, the Presidential Instruction to implement efficiency in state spending and continued influx of new hotel projects have rubbed salt into the wound.


In 2017, we anticipated hotel room stock to reach almost 5,000. Supply profile for 2017 will be mainly characterised by 4-star hotels, which will provide 2,609 rooms, followed by 5-star hotels with 1,603 rooms and 3-star hotels with 787 rooms.

With inadequate economic growth, the hotel market would continue to be challenging for hotel operators, particularly in anticipation of new hotel projects operating in 2017. Such condition will force an increasing competition amongst hoteliers.

NOW! Jakarta

NOW! Jakarta is the magazine for both international visitors and the international community of Jakarta. It comes with quality content and gives readers a healthy portion of everything the city has to offer: exploring Jakarta, hospitality and chamber updates, dining, arts and culture, events, profiles of Jakarta’s prominent inhabitants, all written in a modern and concise style. NOW! Jakarta is definitely the ultimate guide to keep yourself updated with what is happening in the international communities living in Jakarta!

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