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apartment sector
New apartment projects were completed in the first quarter which added 4,273 new units and bringing the overall apartment supply in jakarta to 101,776 units, a 18.7% Y-o-Y increase. the average price all completed apartments in the jakarta area edged higher by 12% Y-o-Y to rp13.62 million/sq m and the average price of completed apartment units in the CBD moved up by 11% Y-o-Y to rp18.53 million/sq m.
retail sector
a total of 247,456 sq m of retail space to be completed during all of 2012 has already been 81% pre-committed. Further 59% of the 129,200 sq m of retail space scheduled to be completed in 2013 has already previously been pre-committed. Similarly, in the cities surrounding jakarta, 86% of total retail space of 93,000 sq m scheduled to be completed in 2012 has already been taken up. Both average asking base rental rates andoccupancy rates increased modestly in the last year, but we anticipate that both will grow at a faster pacethis year as retail space inventory grows moderately.
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office sector
Supply
jakarta supplY
two new buildings were completed during 1Q 2012 while one building was taken out from our database. New buildings during the quarter include Multivision tower, located in jalan rasuna Said and Menara Satu in kelapa Gading, East jakarta. these two supplied an additional office stock of 40,770 sq m. Meanwhile, an office building in the Barito area, South jakarta was demolished and will be replaced by a new apartment tower. all in all, the total office space in jakarta is now 6.27 million sq m with 70% of it located in the CBD area. jakarta office supplY
9,000,000 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 2011 1Q 2012 2012F 2014F 2008 2010 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007
Office completions during 2012 in jakarta will be quite significant. Several buildings have shown rapid construction progress towards completion. the office supply grew by only 3% annually over the last ten years while the office supply from 2012 - 2014 will grow by 8.7% annually. this shows a greater amount of office supply, however most of the future buildings have confirmed high commitment levels even before their completion.
sq m
Existing Supply
annual Supply
Colliers International Indonesia - research
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| colliers international
under construction
Several under-construction office buildings are chasing completion targets this year including 18 Park in the SCBD and aXa tower in jalan Prof. Dr. Satrio. this is not confined to new buildings, as the refurbishment of Exim Melati, which will be called as thamrin Nine, is reaching its final stage. Other office projects under construction will likely to meet with schedule as monitor in the field. Office buildings under construction are seemingly committed to meeting their completion schedules. Should these future office buildings be able to enter the market on time, the total annual office space within the CBD in 2012 will be 356,131 sq m. the projection for the total annual supply in 2012 will be the second largest since 1995 at 405,567 sq m. Office space scheduled for 2013 will be less than in 2012 but we note that three buildings are rushing with the completion target including rasuna tower and Life tower, both located in jalan rasuna Said and are in the middle of basement works. the other tower, Menara Prima 2 located in Mega kuningan area is doing the structure work. according to our new office grading system, most of office buildings projected to be completed in 2012 - 2014 period are categorised as Grade a buildings. Given a recent increase in land prices in the CBD, developers try to justify their income due to increasing cost.
in planning
While some projects have reached the construction stage, several other projects are in the pipeline and in the planning stage. Most of the projects will be located in jalan jenderal Sudirman including the new Chase tower, Sudirman Center tower, International Financial tower 2 and Menara Selaras. Other projects in planning include Mangkuluhur tower in Gatot Subroto, Graha Surya Internusa 2 in jalan rasuna Said and rifa 2 in jalan Prof. Dr. Satrio.
sq m
150,000 100,000 50,000 0 2011 1Q 2012 2012F 2014F 2008 2010 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007
For Lease
For Strata-title
Colliers International Indonesia - research
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Implementing the new grading system, around 72% of office buildings in the outside jakarta area are categorised as Grade C particularly because of the location and the size and quality of the buildings.
Offices for sale will dominate the market during 2012 with a composition of strata-title offices of around 76%. However such conditions will not occur over the next two years when offices for lease will rule the market with a 65% share.
under construction
after the operation of Menara Satu, there will be an additional upcoming office space of 208,626 sq m during 2012. the great thing is that entire office buildings scheduled for 2012 are rushing construction work, which brings an optimistic sense that these buildings will be finished as planned. Of the total of 227,936 sq m of annual office space during 2012, new office buildings will be concentrated in and around South and West jakarta at 65% and 35%, respectively. Of the supply in South jakarta, the majority will be located in tB Simatupang and surrounding areas. the office supply in the tB Simatupang and surrounding areas grew very rapidly. With the additional supply of 80,126 sq m during 2012, the cumulative supply in tB Simatupang and surrounding areas will be 431,191 sq m, which represents20% of the total supply in the outside CBD. Even further, around 79% of the total 286,527 sq m of future office building projected for 2013 are located in tB Simatupang and surrounding areas. Five of the 12 buildings projected to be completed in 2013 in the outside CBD area have started construction including Green kosmo Mansion and alamanda tower in tB Simatupang, DIPO Business in Gatot Subroto, tebet Green in Mt Haryono and Office tower within the kota kasablanka commercial compound.
in planning
Besides office buildings under construction, several developers have announced their plans for new office developments during 2013 2014. this includes several buildings in tB Simatupang like talavera Suite, 18 Office Park, Manhattan Square and South Quarter. Up to this quarter, Manhattan Square, talavera Suite and South Quarter are actually in the early stages of construction. In North jakarta an office building called De Suites was also announced while Wisma 77 tower 2, Gallery West and GP Plaza were also planned to be built in West jakarta. although the tB Simatupang area contributes the most office development in South jakarta, other office areas like kebayoran Baru will have new office towers located within Pasaraya Grande.
sq m
150,000 100,000 50,000 0 2011 1Q 2012 2012F 2014F 2008 2010 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007
For Lease
For Strata-title
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| colliers international
building name
location
sga (sQ m)
marketing scheme
status*
SCBD Satrio MH thamrin Sudirman SCBD kH Mas Mansyur Setiabudi Satrio Mega kuningan Sudirman Hr rasuna Said Hr rasuna Said Satrio Sudirman kH Mas Mansyur kH Mas Mansyur Sudirman Sudirman Hr rasuna Said Mega kuningan Hr rasuna Said Gatot Subroto
23,136 For Lease 60,995 For Lease and For Strata-title 8,000 For Lease 57,000 For Lease 48,000 For Strata-title 84,000 For Lease and For Strata-title 11,000 For Lease and For Strata-title 64,000 For Lease and For Strata-title 40,000 For Lease 57,406 For Strata-title 30,500 For Lease 80,000 For Lease 30,000 For Strata-title 36,596 For Lease 34,000 For Strata-title 40,000 For Lease 40,000 For Lease 126,600 For Strata-title 50,000 For Lease 40,000 For Strata-title 40,000 For Lease 39,356 For Lease
Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning
aXa tower thamrin Nine (Exim Melati) World trade Center 2 Office 8 tower One at the City Center Perkantoran Setiabudi DBS tower at Ciputra World 1 jakarta Menara Prima 2 Chase tower Life tower rasuna tower rifa 2 Menara Selaras the City Center (phase 2) the City Center (phase 3) International Financial Center 2 Sudirman Center tower Menara Palma 2 Menara Pertiwi Graha Surya Internusa 2 Mangkuluhur tower B
outside cbd area 2Q 2012 2Q 2012 2Q 2012 3Q 2012 4Q 2012 4Q 2012 1Q 2013 2Q 2013 2Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 Wisma Pondok Indah 3 Grand Soho Slipi Sovereign Plaza Chitatex tower Blue Green Office Boutique Eighty8 De Suites alamanda tower Gallery West Green kosmo Mansion (GkM) tower talavera Suite Graha Elnusa 2 18 Office Park (Cityland tower) tebet Green Signum tower DIPO Business Park Sultan Iskandar Muda S. Parman tB Simatupang tb Simatupang Meruya kasablanka Pantai Indah kapuk tB Simatupang kebon jeruk tB Simatupang tB Simatupang tB Simatupang tB Simatupang Mt Haryono tB Simatupang Gatot Subroto 36,106 For Lease 52,000 For Strata-title 16,020 For Lease and For Strata-title 28,000 For Lease 20,000 For Lease 56,500 For Strata-title 8,000 For Strata-title 33,000 For Lease and For Strata-title 22,800 For Strata-title 23,000 For Strata-title 16,250 For Lease 40,000 For Lease 36,627 For Lease 8,750 For Lease 58,500 For Lease 19,600 For Strata-title Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction In Planning Under Construction In Planning Under Construction In Planning In Planning In Planning In Planning In Planning Under Construction continued
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continuation 1Q 2014 2Q 2014 2Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 the Manhattan Square Wisma 77 tower 2 Graha kirana 2 GP Plaza Beltway Office Park tower B Beltway Office Park tower D South Quarter Office tower at Pasaraya Grande La Venue tB Simatupang S. Parman Yos Sudarso Gatot Subroto tB Simatupang tB Simatupang tB Simatupang Sultan Iskandaryah Pasar Minggu 37,699 For Strata-title 24,200 For Strata-title 25,000 For Lease 12,204 For Strata-title 10,500 For Lease 49,675 For Lease 40,000 For Lease 40,000 For Lease and For Strata-title 37,168 For Strata-title In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning
Colliers International Indonesia - research
*) 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.
Demand
cbd existing demand
the absorption of existing office space within the CBD continues to show an upward trend. In 1Q 2012, occupancy reached 94.5%, slightly higher than the previous quarter. Continued business expansion coupled with limited space availability are two factors which pushed the vacancy rate down. In certain hot area like Sudirman, the vacancy level is low (only 4%) particularly owing to the limited number of new buildings along this corridor while on the other hand, demand is robust. Likewise, finding quality office space along jalan thamrin is tough given the domination of old buildings in this area. Notable office space absorption during the quarter includes the occupation of around 3,000 sq m in Menara Bidakara, located in jalan Gatot Subroto. around 1,200 sq m of office space was leased by a shipping agency to Graha Paramita which is situated around the rasuna Said area. a transaction made by a telecommunication operator leasing around 2,000 sq m at the East building located in the Mega kuningan area. this transaction represents general cases occurring in the jakarta office market where tenants have to expand to the surrounding buildings due to limited space in their current premises. the common problem of buildings with low vacancy occurs when their current tenants need more space for expansion. When the presence of occupiers is relatively new, finding a neighbourhood space is the best option but relocation to the newer building will be preferred when they have occupied the premises for a long period. Other smaller office space transactions involving around 200 to 400 sq m were completed during the quarter mainly by insurance companies, trading, mining, oil and medical related companies.
sq m
2,000,000 1,000,000 0
Cumulative Supply
Cumulative Demand
Occupancy (%)
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| colliers international
cumulative supplY, demand and occupancY of office space in the outside cbd
5,000,000 4,000,000 3,000,000 100% 80% 60% 40% 20% 0% 2011 1Q 2012 2000 2002 2004 2006 2008 2001 2005 2009 2003 2007 2010
sq m
2,000,000 1,000,000 0
Cumulative Supply
Cumulative Demand
Occupancy (%)
Colliers International Indonesia - research
pre-commitment demand
Despite huge supply projections, the office market during 2012 is predicted to perform well as new buildings projected to operate this year has secured a high commitment level of 77%. With three quarters remaining in this year, the office market is quite confident of maintaining a high occupancy level. the majority of offices for lease have secured occupancy of more than 60% and even buildings like WtC 2 and aXa tower have recorded very high precommitment levels before the buildings are in operation. Similarly, four buildings projected to operate this year have announced their major tenants with an average pre-commitment occupancy of 80%. three new buildings are located in the Pondok Indah and tB Simatupang areas where they get big tenants like oil and gas, mining, bank and technology product companies. For buildings planned to operate in 2013, only alamanda tower has reported of having precommitment agreement with their tenants. Strata-title buildings in the outside CBD area include partial space in Sovereign Plaza, Grand SOHO Slipi and partial space in Menara Satu. Except for the Grand SOHO with a relatively low pre-commitment level, other two buildings have been sold out. thus far, of the total 126,527 sq m of strata-title space projected to be completed in 2013, around 18% have been reported sold.
On the strata-title front, sales rates of underconstruction buildings projected to operate in 2012 have generally reached 82% with only a building having low absorption rates (mainly due to location considerations). the only empty building is a small office building located around the rasuna Said area but this is mainly because the owner is selling the building as an en-bloc investment. However, the other four buildings have registered very high sales rates of above 90%.
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outside cbd
Space absorbed annual Supply
sq m
sq m
Colliers International Indonesia - research
p. 8
| colliers international
building was US$29.71/sq m/month. Meanwhile, Grade a buildings charge an average of US$24.26/sq m/month and the average rental rates in rupiah was rp180,242/sq m/month. the average rental rates for Grade B buildings was US$17.64/sq m/month and rp111,093/sq m/month. Grade C buildings charge US$16.85/ sq m/month and rp98,259/sq m/month.
$35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Grade B Grade C
service charge
In general, service charge costs remained stable QoQ. During our review, we found that several landlords anticipated a service increase should fuel prices rise, nevertheless with the recent plan to maintain fuel prices at the current level at least for the next six months, landlords will potentially postpone service tariff hikes in the short term. this quarter, the service charge tariff was rp55,086/sq m/month in the CBD area. In the outside CBD, the service charges grew by 2.4% QoQ. the overall increase was initiated by several office buildings which introduced additional tariffs ranging from rp5,000 to rp10,000/sq m/month. Overall the adjustment brought the overall service charges tariff to rp41,447/sq m/month.
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Outlook
Land price increases in the main commercial area will be unavoidable. the CBD area of jakarta has recorded substantial increases in land prices particularly because of the scarcity of land, the plans for the Mrt that will potentially lift the commercial value of the land and the limited number of willing sellers. Most are unmotivated sellers who offer their land at a very high price because they do not really wish to sell. Having said that, developers are pushed to build high-quality buildings to achieve high price and/or high rent to justify the land costs they have incurred. the good news is that the jakarta government is considering an increase in the plot ratio to justify the commercial value of the land mainly in certain area within the neighbourhood of the Mrt station. thus, in the future, prime commercial areas like jalan Sudirman and jalan thamrin will be adorned with skyscrapers. rents will continue to soar during 2012. the under-construction buildings projected to operate this year have secured high commitment levels meaning that the remaining vacant space will be limited. With great optimism over the outlook for the Indonesian economy, business expansion is expected to be rosy and demand for business location buoyant. this combination will bolster landlords position and accordingly will lead occupancy tariffs to increase. the positive side of land scarcity in the CBD is that it allows other parts of jakarta to grow as commercial areas. Indeed, the profile of the prestigious CBD is still needed for multinational companies or high profile local companies but there are other growing business entities which do not require high profile locations, particularly the non-service industries, consumer goods, data centres, etc. We have noted some plans for developing office buildings outside of the main commercial areas like the CBD or tB Simatupang area.
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| colliers international
apartment sector
apartment Strata-title
Supply
the year 2012 began with 4,273 new completed units at five apartment projects. the addition brought the cumulative total of strata-title apartments to 101,776. In other words, the total supply during the quarter contributed as much as 4.31% of the total apartment supply in jakarta. these 4,273 units or 16.37% of the total projected 26,098 units which will be completed this year are scattered in the CBD, South, East, and West jakarta. Furthermore, of the total supply coming this quarter, around 44.2% are considered middle- to low- and 38.2% are considered low-class developments (categorised as rusunami low-class multifamily housing), while the remaining 17.5% are middle- to upper-class.
the early part of 2012 began with great optimism among developers as they launched several new projects, taking advantage of the growing property market and economy. apart from the completed projects mentioned above, there were six apartment projects entering the ground-breaking stage during 1Q 2012 including the H residence; Woodland Park residence; the Hive tamansari; Ciputra World 2 jakarta; Setiabudi Sky Garden and Senopati Penthouse. Meanwhile, quite a few new projects ranging from the middle to upper classes scattered in five municipalities in jakarta made early bird offers to potential buyers. these include new projects from reputable developers such as:
Metro Park residence (agung Podomoro Group) and aeropolis residence (Intiland) both located in West jakarta; the Heritage (Wika realty) located in Central jakarta; and Botanica apartment (Pikko Group) located in South jakarta. Other than that, the new line of developers includes the aspen residence (Harmas jalesveva), Lavenue apartment (Pt. Bintang rajawali Perkasa), and the royal Olive residence (Pt. aD realty) located in South jakarta; followed by Sudirman terrace (Pt. tristar Gemilang abadi) located in the CBD; and t - Plaza residence (Pt. Prima kencana) located in Central jakarta.
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apartment name 2012 regatta rio de janeiro Green Palace (5 towers) Belmont residence (tower Everest) ambassade residence (tower a) Senopati Suites Denpasar residence (tower kintamani and Ubud) the Grove residence 8 at Senopati (2 towers) the Wave Pancoran riverside Luxurious raffles residences at Ciputra World jakarta 1 St Moritz (the Presidential Suite tower, the ambassador Suite tower & the royal Suite tower) Sentra timur residence (phase 2) Menteng Square Cervino Village Puri Park View (2 towers) the Grove Suite the royal Springhill (tower Marygold & Magnolia) the East at Essence Darmawangsa Myhome apartment at Ciputra World jakarta 1 Gading Nias residence block Grand Emerald One Park residence tamansari Semanggi Verde Condominium 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 kalibata kebon jeruk kuningan Senopati Satrio rasuna Said Senopati rasuna Said Pengadegan timur Satrio Puri Indah Cakung Matraman kasablanka Meruya Utara rasuna Said kemayoran kebayoran Satrio kelapa Gading Gandaria Gatot Subroto rasuna Said rasuna Said Grogol
region North 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 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) 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 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 3,150 553 400 103 1,100 416 400 1,900 1,900 88 484 1,143 1,500 518 2,000 151 384 244 136 747 379 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
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| colliers international
Despite having the lowest number of projects compared to other areas in jakarta, East jakarta is now starting to have more new development particularly in places like Mt Haryono and Cawang. these areas are becoming popular most recently since there are newly launched projects targeting the middle to low segment. Developers are interested in
developing these areas compared to other locations in East jakarta because of their strategic location, having better infrastructure, and the proximity to the central business area. It is projected that over the next two years, there will be four apartment buildings along the Mt. Haryono - Cawang corridor, adding 2,705 units targeting the middle to low segment.
location
class Middle Low Middle Low Middle Low Middle Low CBD
the supply of new apartment units during 2012 will be substantial, i.e. 26,098 units; in 2013, the strata-title apartment annual supply will be 14,788 units. according to our research, from
2012 - 2015 there will be a total of 53,519 additional new units representing a more than 50% increase in the current total supply.
Demand
the vibrant economic projections for the country attributed to the rise of Indonesian sovereign debt to investment grade have brought good sentiments to the apartment market in jakarta. During the first three months of 2012, the take-up rate for all marketed projects (including projects which are under construction but have been marketed) was 77.7%, up slightly from the previous quarters 75.7%. In other words, there are around 21,251 unsold units in jakarta of which 67.8% are scattered in the outside CBD area.
the table above shows that the operating strata-title apartment buildings located in South jakarta and the outside CBD area experienced an increase in take-up rates from the previous quarter. the majority of existing strata-title apartment buildings in the outside CBD area are middle-class projects. Several promotional programmes were offered like taking the moment of Chinese New Year during the
quarter and other promotional campaigns like free holidays to Bali, gold rewards, cash vouchers (from rp5 to 75 million), and electronic gadgets or furniture to furnish the apartment units are incentives provided to boost sales of apartments. the other major marketing enticement to accelerate sales is flexibility on terms of payment.
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In the pre-sales activity of apartment projects under construction, there was a declining trend in the CBD area. In the CBD, the absorption of new apartment projects slowed down because many new projects from mostly the upper-class came into the market during the first three months of 2012. Meanwhile, in the South jakarta area, the upper-class to luxury segment of under-construction projects is largely located in prime residential areas like kebayoran Baru. One of the projects with good performance is Pakubuwono Signature, developed by agung Podomoro where more than 95% of the total units are claimed to have been absorbed by the market. Other projects having the same condition are Senopati Penthouse, Senopati
Suites, and residence 8 at Senopati, all of which are located in a very strategic area close to the CBD and which recorded a sales rate above 65%. Furthermore, the outside CBD area enjoyed good performance mainly due to affordable prices. a large number of the projects are targeted at the middle class segment. this apartment segment is quite active in promoting their products in other cities of Indonesia like Bandung, Surabaya and Balikpapan, trying to capture local, potential, wealthy buyers. this strategy seems to work well because there are quite a few wealthy businessmen in rich cities outside of java.
2,000 1,000 0
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| colliers international
asking Price
Given the relatively high sales rate of ongoing projects, the overall apartment market in jakarta experienced a somewhat high price increase, from an average of rp12.94 to 13.62 million / sq m this quarter. Besides the good sales performance of under-construction projects, price increases were also driven by the influx of many upper-class projects which offer above average market prices which resulted in an overall price rise.
average
the highest increases were at apartment projects located in the South jakarta area, where the asking price was up by 12.8%, to an average of rp14.48 million / sq m. this average increase was fuelled mostly by several new projects located in this area and targeted at the
middle- to upper- and upper-class segment which impacted the overall price. again, due to the influx of new projects offered at higher prices, the overall price in the outside CBD area also rose this quarter registering an increase of 7.5% over the last quarter.
the same marketing strategies were still applied up to the reviewed quarter including flexible terms of payment. One of the marketing breakthroughs is combining a bank mortgage (the Indonesian term is kPa or kredit kepemilikan apartment) and cash instalments. Providing cash in advance is always a typical
problem of buyers of middle- to lower-class apartments and therefore the developers offer the buyers the opportunity to pay the down payment by cash instalments within 12 to 24 months while the monthly instalment is paid through the mortgage.
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Basically there are three payment methods of buying apartments, mortgages (kPa), cash instalments and hard cash. From our survey it was found that cash instalments is the most frequent method used (55 to 70% of buyers, ranging from the lower to upper segments). Most buyers opt for this because they have the capability to pay cash instalments and it offers simplicity, flexibility, and privacy (because they do not want to reveal their income). It is interesting to note that payment through a bank mortgage is not widely chosen even for lowerclass apartment projects. these units (the
Indonesian term is rusunami) were originally government-subsidised projects for the low to middle income levels, however the fact is that buyers of these apartments preferred to pay using cash instalments. this indicates that the target buyers have deviated because the fact is that buyers are not middle income occupiers but are investors. For buyers of middle to upper class apartments they may pay cash installment or hard cash because buyers are mainly those with strong financial capability and they do no want to endure the hassle of dealing with bank procedures.
the graphs follow give an overview of new apartment sales and price performance from middle to upper class. We take some samples of operating and under-construction apartment projects to show the price differences between
the first launching price and the current price. this has been a common practice among developers where prices are always reviewed in accordance with the sales performance.
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| colliers international
price differences between the first launching price and the current price for apartment middle to low class
apartment Located in kebon jeruk (2012 ; 840 unit ; 40% sold) apartment Located in Fatmawati (2011; 526 unit ; 60% sold) apartment Located in Latumenten (2011 ; 2,907 ; 70% sold) rp0 Current Price rp10,000,000 Initial Price rp20,000,000 rp30,000,000
apartment Located in Gatot Subroto (2013 ; 320 unit ; 79% sold) apartment Located in kasablanka (2011 ; 890 unit ; 73% sold) apartment Located in thamrin (2011 ; 414 unit ; 98% sold) rp0 Current Price rp10,000,000 Initial Price rp20,000,000 rp30,000,000
rp20,000,000
rp30,000,000
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Supply
the apartment for lease market saw only the opening of the 112-unit Centro City Serviced apartments early this year. this serviced apartment project consists of only studio-type units. With the completion of this development, the cumulative supply for serviced apartments in the first three months of 2012 rose gently by 2.46% QoQ to 4,659 units. Meanwhile, the nonserviced apartment (apartments purely for lease), supply subsided due to the operational conversion of taman Pasadenia Pulomas from previously being non-serviced apartments for lease to strata-title apartments for sale. With a total of 50 units, the owner of taman Pasedenia Pulomas sold 45 units and kept the remaining five units for lease. thus, with the addition of 112 units at Centro City Serviced apartments and the reduction of 45 units at taman Pasadenia Pulomas , the number of total apartments for lease is up this quarter to 8,079 units.
Serviced
apartment name
region
4Q 2012 plaza senayan (tower c & d) 2013 ascott kuningan 2014 Somerset kentjana jakarta 2014 Fraser Suites @Ciputra World jakarta 2
Demand
In general, the apartments for lease market in jakarta saw a minor drop in the occupancy rate from 76.1% to 75.1% this quarter. the occupancy level for non-serviced apartments slowed mildly during early 2012, when occupancy slowed by 0.93% to 73.8%. Similarly, occupancy levels for serviced apartments eased moderately during the quarter decreasing from 78.75% last quarter to 77.56% as some projects reported contract expirations with their tenants.
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| colliers international
Geographically, apartments located in the CBD area captured the highest occupancy level compared to other areas although the occupancy level showed a minor drop QoQ to 84.4%. Compared to the occupancy performance in the outside CBD area that was only 66.5%, the CBD area is still the best location for renting apartments. In general, apartments for lease,
either serviced or non-serviced, are occupied by expatriates who are looking for proximity either to the workplace or an international school. therefore, the performance of apartments for lease in South jakarta is much better despite having a minor drop in occupancy (76.2%) this quarter.
rental rates
While absorption rates showed a slightly downward trend, the average asking rental rate of apartments for lease saw a minor increase in this quarter, up to an average of US$13.93 from US$13.73/sq m/month in the previous quarter. the increase in the rental rate was largely experienced by the pre-eminent serviced apartments in the CBD, such as Shangri-La, Frasers, ritz-Carlton, kempinski, and the ascott Group, with an average increase of US$100 US$200/unit/month. as mentioned earlier in our previous report, several apartments for lease, especially serviced apartments, have anticipated adjusting the asking rental rates upward in response to inflation and to the increase in the regional minimum wage.
average
Colliers International Indonesia - research
as most prominent apartments for lease reported an increase, the average rental rate for the CBD area improved mildly by less than 3% to US$18.18/sq m/month. the average rental rate in the CBD area was US$2,650 / unit. In
the outside CBD, rental rates are relatively stable at US$8.81 / sq m / month. Similarly, apartments in South jakarta area showed a minor increase of an average of US$12.43/sq m/month.
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Outlook
the prospects for the apartment market will remain favourable as long as underlying local market conditions and business confidence continue to be rosy. We do not expect too much land reform concerning the foreign ownership of Indonesian property but as long as the conducive business atmosphere can be maintained there is plenty of room for the apartment market to grow, particularly benefiting from the potential spending of wealthy Indonesians from the other rich provinces of Indonesia. as we predicted earlier, apartment prices will surge ahead this year and this has already proven to be the case in the early part of 2012 when the average apartment price went up albeit moderately. Price increases will not only be a result of the new and under-construction projects with above average market prices; they will also be impacted by the continued adjustments made by pre-selling apartment projects (i.e. apartments under construction but which have already been marketed). New projects in the CBD area will surely experience the most increases as land prices soar and in anticipation of the fuel price hike which will be implemented in six months, increasing construction costs which will be a significant factor in adjusting apartment prices.
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| colliers international
retail Sector
Supply
a retail centre located in Depok, Cimanggis Square, is the only new retail centre in 1Q 2012. this centre provides around 15,000 sq m of lettable retail space, which moved the cumulative figure for retail space slightly upwards to 5.97 million sq m. In jakarta and greater areas (including cities like Bogor, Depok, tangerang and Bekasi, formally abbreviated as jabodetabek) more retail space is expected to flood onto the market. there will be 395,827 sq m of leasable retail space entering as new retail space in jabodetabek during 2012. retail space is growing not only from the development of new shopping centres, but also from the expansion of existing shopping centres. three shopping centres in the greater jakarta area are planning for expansion in response to the dynamic market. Citra Gran Mall is one example where they are expanding the space due to the growing residential market in the Cibubur area. Likewise, Plaza Cibubur, targeting lower-end shoppers, will also expand in response to growing demand. Lastly, Supermall karawaci is also moving to enlarge their retail space.
jakarta
Greater jakarta
Colliers International Indonesia - research
jakarta supplY
No new retail centre is on-stream, and thus cumulative retail supply closed the quarter at 4.04 million sq m for the jakarta area. Further, during the Y-o-Y period (1Q 2011 to 1Q 2012) there were only 81,663 sq m of retail space. Nevertheless, 2012 will see a significant influx of retail space. a total of 244,052 sq m of retail space will be contributed by three large centres, including kota kasablanka, kemang Village and Ciputra World. among the three centres, kota kasablanka will provide the largest retail space comprising 38% of the total retail supply for 2012. In jakarta, there are only six shopping centres providing retail space of more than 100,000 sq m, and kota kasablanka is one of these. Other than the abovementioned, there are three more retail centres projected to begin operations in 2012, including Menteng Square, Pulomas XVenture and Pondok Indah Mall Street Gallery, which comprise a total of 38,775 sq m of retail space. thus in total, there will be six new shopping centres during 2012, contributing 282,827 sq m of retail space. Supply is not only about new retail space, but also about the new look of existing retail space. Ciputra Mall, located in jalan S. Parman and surrounded by new and fresh shopping centres like Central Park, is planning to rejuvenate their premises this year in order to retain their loyal visitors and tenants. Such renovation is needed after 19 years of operations and in view of the tough recent competition.
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2014F
Colliers International Indonesia - research
development 2012 kota kasablanka kemang Village Ciputra World jakarta 1 Menteng Square Pulomas XVenture Pondok Indah Mall Street Gallery 2013 Cipinang Indah Mall the Baywalk @Green Bay Pluit St Moritz 2014 Mall @the City Center the Gateway Pondok Indah Mall 3
location kasablanka kemang Satrio Menteng Pulomas Pondok Indah Cipinang Pluit Puri Indah kH Mas Mansyur Pondok Gede Pondok Indah
region South jakarta South jakarta South jakarta Central jakarta East jakarta South jakarta East jakarta North jakarta West jakarta Central jakarta East jakarta South jakarta
nla (sQ m)
status
110,000 Under Construction 56,052 Under Construction 78,000 Under Construction 4,475 Under Construction 25,200 Under Construction 9,100 Under Construction 20,000 Under Construction 52,000 Under Construction 57,200 Under Planning 35,000 Under Planning 10,000 Under Planning 40,000 Under Planning
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| colliers international
Bekasi 31%
Bogor 17%
Depok 14%
tangerang 38%
Colliers International Indonesia - research
In terms of area distribution, the existing retail supply in BoDetaBek area is highly concentrated in tangerang and Bekasi. those areas represent 38% and 31% of the total stock. Following renovation, the Citra Gran Mall will be reopened in 2013 with a more appealing concept, and will represent a serious threat to the existing Cibubur junction, which is so far the principal shopping destination for the Cibubur community. Still in the same street, Plaza Cibubur is also planning to expand to the backside of the existing building, adding a leasable area of about 2,000 sq m, and projected to finish in early 2013. Meanwhile, Supermall karawaci in tangerang is also planning to expand its leasable area to approximately 20,000 sq m. Other centres like Cibinong
Square, located in Bogor, are also considering expanding. the owner is thinking of extending their shopping area as they are currently holding sizeable vacant land. Overall, up to 2014 there will be 443,720 sq m of new retail space entering the market. For the remainder of 2012, the market expects to see the operation of the new Shopping Mall alam Sutera and Mall Balekota, both of which are located in the tangerang area. Meanwhile, two shopping centres projected to begin operations in 2013, i.e. Cibinong City Mall and Metropolitan Grand Mall, have started construction in line with the completion schedule.
Bekasi
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development 2012 Plaza Dua raja Shopping Mall @alam Sutera Mall Balekota 2013 Metropolitan Grand Mall Cibinong City Mall Citra Gran Mal (extension) Plaza Cibubur (extension) Cimandala City trade Center Mal Harapan Indah the Breeze Sinar Mas Land Bekasi junction Bekasi trade Center 2 Urbana Cinere Bintaro Lifestyle Center 2014 Lippo Cikarang Citywalk (phase 2) Summarecon Bekasi (phase 1) Bekasi Bekasi Bekasi Bogor Bogor Depok Bogor Bekasi Bogor
location
nla (sQ m)
status
20,000 Under Construction 68,000 Under Construction 25,000 Under Construction 40,000 Under Construction 30,000 Under Construction 26,000 Under Construction 2,000 Under Construction 30,000 In Planning 44,420 In Planning 24,300 In Planning 14,000 In Planning 30,000 In Planning 30,000 In Planning 15,000 In Planning 10,000 In Planning 35,000 In Planning
tangerang tangerang
*) 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.
Demand
retail centres for lease in jakarta are enjoying a good leasing performance in 1Q 2012, albeit with only a small increase, as occupancy levels registered at 89.6%. the North jakarta area showed the highest demand growth at 4.7%, due in particular to the performance of Mall kelapa Gading. Some of the leasing transactions were toys kingdom, which is going to start fitting-out work on around 600 sq m at Mall artha Gading, and Informa, which expects to occupy around 2,000 sq m. Other than that, we also recorded leasing activities for F&B retailers at Pluit junction, as well as Mall of Indonesia and Emporium, which continue to maintain increasing occupancy levels by obtaining new tenants in significant numbers. In Central jakarta, Samsung, Minimal Fashion, Icon 99 and Fanco are new tenants at Gajah Mada Plaza. Despite being an old mall, this retail centre remained as a destination in the Gajah Mada area. In the upper class segment, Plaza Senayan filled up with new tenants like all Dress Up, Dunhill, Hermes Watch and Swatch. these two retail centres have helped bring down the vacancy levels in Central jakarta to around 3.2%. In the West jakarta area, Central Park Mall also helped the overall leasing performance in this area by having several new tenants open their retail outlets.
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In East jakarta, kramat jati Indah is still being renovated, but a number of tenants are preparing to return to a better concept in the mall. XXI cinema will be occupying this shopping centre, and it will be the first XXI in East jakarta. list of new major tenants during 1Q 2012
In South jakarta, food and beverages (F&B) retailers are quite actively expanding their outlets in several retail centres, along with other mini-anchors, to complement tenancy mainly in the newly operating malls.
retailers Metrox Store Informa Office One toys kingdom Informa ace Hardware Eat n Eat Hypermart
line of business Footwear Home Furnishing Stationary kids & toys Home Furnishing Home Equipment Food and Beverage Hypermarket
size (sQ m) 2,000 kuningan City 2,000 Mall artha Gading 500 Mall artha Gading 600 Mall artha Gading 1,200 Grand Paragon 1,200 Grand Paragon 2,000 Mal ambasador 4,500 Cimanggis Square
location South jakarta North jakarta North jakarta North jakarta Central jakarta Central jakarta South jakarta Depok
retailers Coffee Bean Ming Chinese Outback Steak House Starbucks tiramisu keizia Samsung Minimal Fashion all Dress Up Dunhill Hermes Watch Swatch roppan Payless kingscobra Grand Duck king BMk BMk the Executive Et Cetera
line of business Food and Beverage Food and Beverage Food and Beverage Food and Beverage Food and Beverage Body treatment Electronics Fashion Fashion Fashion jewellery, Watches and accessories jewellery, Watches and accessories Food and Beverage Footwear Hobbies Food and Beverage Food and Beverage Food and Beverage Fashion Fashion
size (sQ m) 200 kuningan City 200 kuningan City 200 kuningan City 170 kuningan City 46 Slipi jaya 60 Slipi jaya 120 Gajah Mada Plaza 60 Gajah Mada Plaza 200 Plaza Senayan 200 Plaza Senayan 200 Plaza Senayan 200 Plaza Senayan 200 Plaza Semanggi 200 Pejaten Village 60 Pejaten Village 300 Cilandak town Square 200 Bintaro Plaza 200 Depok Mall 200 Supermal karawaci 200 Supermal karawaci
location South jakarta South jakarta South jakarta South jakarta West jakarta West jakarta Central jakarta Central jakarta Central jakarta Central jakarta Central jakarta Central jakarta South jakarta South jakarta South jakarta South jakarta tangerang Depok tangerang tangerang
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By contrast, there were also several termination cases during the reviewed quarter. the first case occurred in Pasaraya Grande, where they are now trying to deliver a new concept to accommodate and attract more visitors. this brings consequences for underperforming tenants who may pull out from their premises in order for the mall to become more competitive in the retail business. Similarly, this also happened to old shopping centres like ratu Plaza, where the new owner demanded a better performance for the mall and introduced a fresher concept to entice new prospective tenants and to lure more visitors. Consequently, a number of tenants could leave their premises. the expansion of convenience stores has impacted those F&B retailers which leased food court area in a retail centre located around Pasar Baru. Such F&B retailers are seeing
fierce competition from convenience stores and decided to close down in order to save themselves from greater loss. this was not exclusive to local brands, as an international prominent burger restaurant has had to close their store in Pondok Indah Mall following their previous closure at Gandaria. Overall occupancy rates in greater jakarta area rose modestly by 2% compared to the previous quarter, which registered at 86.3%. the strong performance of new retail centres such as Summarecon Mal Serpong 2, tangerang City, Living World, Metropolitan Mall, Supermal karawaci, Depok Mall, teraskota and Margo City has helped contribute to the overall performance. Even the newly operating Cimanggis Square operates with two major tenants (of their own group) i.e. Hypermart and Matahari Department Store.
1Q 2012
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bodetabek area
Space absorbed annual Supply
2013F
2013F
2012F
2012F
2011
2011
sq m
sq m
Colliers International Indonesia - research
retailers
toys kingdom ace Hardware Informa QQ kopitiam
line of business
kids & toys Home Equipment Home Furnishing Food and Beverages
size (sQ m)
600 Cibubur Square 1,800 Cibubur Square 2,600 Cibubur Square
location
East jakarta East jakarta East jakarta tangerang
date
4Q 2012 4Q 2012 4Q 2012 4Q 2012
shopping center
jakarta area kuningan City tebet Green Ciputra World kemang Village
committed occupancY
90% 50% 100% 85%
major tenants
Lotte Mart (10,000 sq m), Gramedia, Best Denki, XXI, Electronic Superstore, Flame karaoke, Lollipop Playland, amazing Zone, ace Hardware, (1,200 sq m), jatomo Fitness, Metrox (2,000 sq m) Burger king, Starbucks, Warung Leko, Dominos Pizza, Steak 21, Sapo Oriental and Sago kitchen, ace Hardware (1,400 sq m) Lotte Department Store (6,000 sq m) Debenhams (17,500 sq m), Zara (1,500 sq m), Next Boutique (500 sq m), Marks & Spencer (1,000 sq m), kidz Station, Starbucks, Burger king, Dominos Pizza, Hypermart (4,000 sq m), ace Hardware (2,300 sq m), Fitness First, XXI, Chipmunks Playland and Cafe (1,500 sq m)
kota kasablanka
90%
Sogo (19,000 sq m), ace Hardware (2,500 sq m), XXI, Electronic Solution, kem Chicks, Carrefour (8,000 sq m), Informa (5,000 sq m), toys kingdom (1,100 sq m), Muji Store (400 sq m), Nautica, Marks & Spencer, Giordano, jack Nicklaus, Family karaoke, Charles & keith, Sate khas Senayan, Batik keris, Planet Sport, Duck king, rockport
St Moritz
80%
Debenhams (17,000 sq m), Zara, Next, Marks & Spencer, kidz Station, Starbucks, Burger king, Dominos Pizza, Matahari, Hypermart, Electronic City, XXI, ranch Market, Sea World Indonesia, tony romas, kiyadon Sushi, the Coffee Bean, jCo
25% 50%
Carrefour (5,850 sq m) ace Hardware, XXI, Farmers Market, Electronic Solution, Bandar Djakarta, Informa, time Zone, toys kingdom, Burger king, Optic Seis, Giordano continued colliers international | p. 27
continuation greater jakarta area Living World alam Sutera 85% Han Gang korean Food, Sushimise, Steak 21, Canton Boy, Sate khas Senayan, ajisen ramen, kopitiam, Informa (30,000 sq m), ace Hardware (15,000 sq m), toys kingdom, XXI, Gramedia, (1,200 sq m), kampoeng Nelayan, Breadtalk, Hero Summarecon Mall Serpong 2 Shopping Mall @alam Sutera 95% 90% Eat and Eat (1,500 sq m), Centro Department Store (10,000 sq m), Best Denki, Do It Best Pongs Home Center (3,000 sq m), takigawa, Dante, Secret recipe Sogo Department Store (10,000 sq m), the Food Hall (3,000 sq m), Funworld, Mango Farm, Gramedia (1,200 sq m), XXI, Chipmunks Playland & Cafe (2,100 sq m), Electronic Solution, Home Solution, Giant (5,000 sq m), Guardian Grand Metropolitan CitraGran Mall Mall Balekota 70% 75% 75% Centro, Farmers Market, toys kingdom, Funworld Sate khas Senayan, Optik Melawai Matahari (10,000 sq m), Hypermart (6,000 sq m), Gramedia (1,200 sq m), Starbucks, Bengawan Solo Hypermart (7,300 sq m), Electronic Solution (4,500 sq m), ace Hardware (1,000 sq m), Gramedia, Informa, XXI, Matahari (7,000 sq m), toys kingdom (2,000 sq m), amazone (900 sq m)
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average asking rental rates of different class shopping centres in jakarta and greater jakarta
rp700,000 rp600,000 rp500,000 rp400,000 rp300,000 rp200,000 rp100,000 rp0 2005 Middle Upper 2006 Middle 2007 2008 Middle Low 2009 2010 average 2011 1Q 2012
Greater jakarta
service charge
In the jakarta area there were only minor changes on the operating costs per square metre where service charges stayed at rp77,155/sq m/month, reflecting only a 3% increase q-o-q. the overall change was mainly attributed to two retail centres in Central and South jakarta which decided to increase service charge costs after doing renovation work. In the greater jakarta area, teraskota (located in tangerang) adjusted the service charge tariff and thus brought a slight increase to the overall service cost for the greater jakarta area to rp60,380/sq m/month.
average service charge of different class shopping centres in jakarta and greater jakarta
rp120,000 rp100,000 rp80,000 rp60,000 rp40,000 rp20,000 rp0 2005 Middle Upper 2006 Middle 2007 2008 Middle Low 2009 2010 average 2011 1Q 2012
Greater jakarta
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Outlook
2012 will be a brisk period for retail business, highlighted by retailers business expansion and landlords efforts to deliver underconstruction projects on time due to precommitment agreements with tenants. In fact, several macro indicators suggest that the economy has a positive outlook. Further, domestic consumption and lifestyle shifts will be increasing, and these will be the key drivers for retail business growth. On the retailers side, several lines of business have reported enjoying surging profits from growing consumption. For example, Hero is a robust prospect as it acquired franchising licenses from Swedish home furnishing stores brand IkEa which will start in 2014. the attempt to bring in this well-known brand is aimed at growing middle and upper-middle customers which have been pampered by home furnishing retailers like ace Hardware. Likewise, a subsidiary of South korean retailer Lotte Group, Lotteria Co Ltd, will open more Lotteria fast food franchises in addition to their three retail outlets. this retailer will serve meals featuring organic food and expects to become one of the top three fast food restaurants in Indonesia by 2020. For some time now, branded products have benefitted from the improving standard of living of the middle class. Such a phenomenon continues to encourage more foreign retailers to expand their operations to Indonesia, as they endeavour to capitalise on the growth momentum. thus, both retailers and consumers will propel the countrys retail markets. More business expansion by operating retailers, combined with the expanding business of overseas retailers will lead to lower levels of vacant retail space, and accordingly occupancy costs will head upwards. Given the solid performance of the retail business, vacancy levels are projected to fall further to less than 10% over the next two years in jakarta.
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Supply
Over the last two years, the major challenge facing the industrial market has been sourcing industrial land ready for development. Over the same time period, the fear of limited industrial land stock has been identified, as several industrial estates failed to anticipate a vibrant industrial market in which absorption rates exceeded the rate at which new industrial land was introduced. For some industrial estates, it can be quite frustrating to lose transaction opportunities due to limited stock of industrial land. this quarter, the industrial market failed again to see the development of any new industrial land. all of the expansion activities currently underway require a few more months before they will be ready to operate. For example, Bekasi Fajar is developing a total of 300 hectares, but they require around one year to clear the land and build infrastructure before the site is ready for operation. Meanwhile, within the same area, MM2100 cannot sell the remaining land. In fact, the company needs to acquire more land to substitute for the green area. another industrial estate in Bekasi is still actively selling despite its limited land stock. In certain cases, buyers are willing to pay in advance before the land is ready in order to take advantage of the current price. the condition of limited supply also occurred in karawang, where two industrial estates are now running out of stock to sell. One industrial estate in karawang reported that the main obstacle to its own expansion is the contour of the land, which requires major work and investment. In our view, limited new industrial land stock will be completed in 2012. In short, the general problem facing most industrial estates is delivery time, as they are now rushing to counterbalance the increasing demand for land. By the end of 2012 or early in 2013, three new industrial land plots will potentially be supplied by several industrial estates in Bekasi, measuring 300, 200 and 153 hectares (gross). an industrial estate in Serang and a 188hectare industrial estate in karawang will also enter the market. So far, the supply position remains the same, with operational and serviceable industrial land at a total of 8,666 hectares scattered across six regions (jakarta, Bekasi, tangerang, Bogor, karawang and Serang).
Serang 21%
jakarta 10%
karawang 36%
tangerang 5%
Colliers International Indonesia - research
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Demand
It is expected that 2012 will be a brisk year for the industrial market, since enquiries for industrial land continue to flow in. However, land availability remains the main obstacle. We expect to see a significant number of land transactions, primarily in karawang or Bekasi, as long as industrial estates can provide sufficient industrial land. total land sales recorded during 1Q 2012 were only half of the total sales seen in 1Q 2011. However, this still reflects good absorption, where the total land transacted was registered at 193.7 hectares. again, this is good enough to change the performance indicators in the industrial market, such as land prices and take-up rates. With three quarters ahead in 2012, enquiries for industrial land is projected to stabilise or even peak in the third or fourth quarter of the year, provided that the land is ready and available within the year.
60
again, automotive and related industries are the main drivers for industrial sales. Up until 1Q 2012, transactions by automotive industries weighed in at around 58.1% of total sales, accounting for a total of 112.58 hectares. Like the sales composition in 2011, Bekasi and karawang continue to carry out transactions in
annual industrial land sales
1400 1200 1000 hectares 800 600 400 200 0
the automotive and related industries, with the automotive industries occupying the top spot in these two regions. For this quarter, supporting industries such as vendors and auto parts manufacturers have produced greater numbers of transactions than the automotive industry itself.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
1Q 2012
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aside from the automotive industry, no other industry dominated the total transactions this quarter. according to our records, among active industrialists are food and beverages, plastics, pharmaceuticals, steel-related products, manufacturing, oil and gas, logistics, metals, textiles, building materials and developers (they typically buy a small plot of land, develop it and sell it as a ready-to-use industrial building). We did not see any transactions in tangerang, as many operating industrial developers have reported that they have no available land. this includes industrial estates like Cikupamas and taman tekno BSD, while other industrial
tYpe of active industries up to 1Q 2012
estates such as Pasar kemis and Millennium have only limited ready-to-use land for sale. In the Serang area, Modern Cikande and krakatau Industrial Estate Cilegon (kIEC) are the only industrial estates with consistent sales. Modern Cikande sold a total of 9.7 hectares of land to the gas, beverages and textile industries. another active industrial estate is kIEC, which continued to record sales from five companies, including two from the expanding food industry (local and overseas) and three from the new overseas steel-related companies. these five transactions in kIEC composed a total of 12 hectares.
Steel-related 4.1% Pharmaceutical 2.1% Plastics 2.7% Food & Beverage 3.0%
Metal textiles 3.1% 0.6% Building Material 2.1% Developer 4.9% Others 12.1%
automotive 58.1%
Colliers International Indonesia - research
colliers international |
p. 33
this period, karawang recorded the largest number of transactions in the quarter (ahead of Bekasi), with five industrial estates registering considerable volume. Despite being lower than the previous quarter, the total number of transactions in karawang was substantial, with Suryacipta outselling any other industrial estate with a total of 57.6 hectares. Large transactions in Suryacipta were mainly contributed by automotive component manufacturing companies (seven different transactions), totalling 87%, while the remaining sales were mainly carried out by catering, ceramics and plastics companies. the karawang region registered a total of 106.86 hectares of land being transacted, with 46% of this transacted in kI Mitrakarawang, kIIC, kota Bukit Indah (Indotaisei) and kota Bukit Indah (Besland Pertiwi). kI Mitrakarawang concluded seven transactions, mainly concerning automotive companies across a total of 18.46 hectares. Of this, less than 1 hectare was sold to non-autorelated industries. kIIC recorded a total of 16 hectares worth of transactions this quarter, mostly to new japanese companies in a yet-tobe-disclosed industry. Meanwhile another single-hectare transaction in kIIC was completed by existing automotive-industry tenants for their own expansion. kota Bukit Indah, operated by Indotaisei, reported land sales to three companies a glass production industry (almost 3 hectares) and two auto parts companies (totalling 8.3 hectares). Overall, kota Bukit Indah - Indotaisei sold 11.2 hectares, leaving around 3.5 hectares unsold. kota Bukit Indah, Besland Pertiwi released 3.6 hectares of land to their operating tenant, an automotive company from japan. Besland Pertiwi focused on leasing land and industrial buildings, but would only consider selling to tenants that will operate for a long time. the total industrial land sold in 1Q 2012 equalled
only one-third of what was sold last quarter. this is not due to sluggish demand for location in Bekasi, but is mainly attributable to limited land availability within the area. thus far, only jababeka and Delta Silicon have enough land to be sold. Meanwhile, despite having spacious land for sell, there are limited ready-to-use plots in kota Deltamas, and these will only available several months in the future. Furthermore, it is now almost impossible to find immediate land for sale in either Bekasi Fajar or MM2100. thus, Bekasi only sold 65.13 hectares during 1Q 2012. Even Bekasi Fajar, one of the best-performing industrial estates, reported no sales due to the lack of availability of ready-touse land. In both Bekasi Fajar and MM2100, new tenants or those who wish to expand have to wait several months before acquiring new land. Delta Silicon again recorded the highest sales in Bekasi, thanks to contributions from the automotive and related industries as well as logistics and small transactions made by warehouses or industrial building developers that buy, develop and sell land. a total of 26.6 hectares of land was transacted during the quarter. Greenland at kota Deltamas sold a total of 19.6 hectares of land to eight automotive companies, but they have reported that the delivery time to the buyers will not take place as soon as was hoped. jababeka, an important estate developer with significant land stock, reported selling land to various clients in industries including manufacturing and electronics (comprising the biggest transaction), pharmaceuticals, food and beverages, automotive and workshop and logistics. this quarter, they sold around 15.6 hectares, exceeding the previous quarters sales. Small transactions were completed by MM2100, which sold a total of 3.26 hectares of land to two auto parts companies.
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$120 $90 $60 $30 $0 2006 Bogor 2007 2008 tangerang 2009 karawang 2010 Bekasi 2011 Serang 1Q 2012
Meanwhile, only a few industrial developers sell industrial buildings. as a point of reference, one industrial estate in Bekasi sells 1,000-sq m industrial buildings on a 1,400-sq m for rp8.4 billion (approximately US$923,810). For a smaller building (356 sq m) standing on a 480sq m plot, the price is set at rp2.7 billion (US$300,160).
Maintenance expenses were unchanged from the previous quarter. However, two industrial estates are expecting to introduce new service
$0.06 $0.04 $0.02 $0.00 2006 Bogor 2007 2008 2009 karawang 2010 Bekasi 2011 Serang 1Q 2012
tangerang
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jakarta | 1q 2012
Land Price (sq m) Highest US$ 164.84 US$ 164.84 US$ 125.00 US$ 173.08 average US$ 107.42 US$ 116.40 US$ 116.98 US$ 164.75
Maintenance Expense (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 Highest US$ 0.08 US$ 0.11 US$ 0.06 US$ 0.07 average US$ 0.07 US$ 0.06 US$ 0.06 US$ 0.06
Colliers International Indonesia - research
Outlook
the hurdle that industrial developers have to overcome is the lack of availability of industrial land. Last years incredible sales were not wellanticipated by many landlords, as they are now running out of industrial land stock to sell. two industrial areas, namely Bekasi and karawangare, are the most active regions in selling land. Expansion activities and the active searching for new industrial sites in these two regions is providing solid infrastructure and ensuring good accessibility to jakarta as well as to the primary ports for distribution. On the demand side, the industrial market in greater jakarta will potentially continue to attract industrialists. thus, we believe that demand will maintain performance comparable to last years. Nonetheless, the supply side will continue to hinder the industrial markets performance. although most industrial estates with brisk sales are rushing for land preparation works, the short-term momentum will be insufficient for tenants with immediate expansion needs. Given such conditions, land prices will unavoidably be corrected this year. During this landlord market in which land stock is depleting and the economic outlook is promising, industrialists will have limited options for expanding or buying industrial land. In Bekasi, there are two industrial estates with adequate ready-to-use land for sale, while in karawang, there is only one industrial estate that will potentially record high sales throughout the year. automotive (and auto-related), food, steel, consumer goods, manufacturing and pharmaceutical industries will remain active and continue to look for land.
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.
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