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Colliers Market Report 4Q 2011
Colliers Market Report 4Q 2011
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.
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.
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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
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.
For Lease
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| colliers international
For Lease
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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.
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| colliers international
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.
colliers international |
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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.
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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.
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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
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.
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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.
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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.
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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
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
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.
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East jakarta 9%
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.
Duta anggada 4%
Intiland 5%
Pikko 11%
Gapura Prima 4%
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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)
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BY nUmBer of projects
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.
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.
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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
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.
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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.
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.
South jakarta
Non CBD
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.
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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.
Rp/sq m
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.
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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.
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)
developer name Pt Senayan trikarya Graha agung Sedayu Group & Pt jakarta Propertindo Pt Intiland Development
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.
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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.
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$5,000/ unit/month. However, over the next year, quite a few apartment units for lease, particularly serviced apartments are planning to increase asking rental rates by 5 - 20%. the anticipation for inflation and increase in the regional minimum wages are the main reasons for increasing the rental tariffs. On the other hand, some nonserviced apartment developers are taking a wait and see position regarding the amount they intend to increase rental rates until they are sure of the percentage of rental increase decided on by serviced apartment operators.
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p. 19
CBD
South jakarta
Non CBD
average
Colliers International Indonesia - research
Outlook
With continued increases in land prices and sound pre-sales performance, apartment prices are expected to further increase in 2012. this will largely take place in the CBD and South jakarta areas. thus far, prices of upper scale apartments have gone up quite substantially and they will likely climb along with heightening absorption rates. Looking at the projected supply of 2012, there are quite a few upscale projects which will also cause the overall prices to increase next year.
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colliers international |
p. 21
size (sQ m) 500 - 900 600 - 1,500 135 - 200 250 - 700 500 - 1,200 550 - 1,000 350 - 600 400 - 1,500 220 - 240 300 - 500 400 - 700 400 - 750 550 - 1,000 200 - 300 400 - 700 300 - 500 400 - 800 400 - 600 500 - 900
rental rates (in Us$/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.
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apartments
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p. 23
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
p. 24
| colliers international
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.
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West jakarta
0 - 15,000 sq m 45%
0 - 15,000 sq m 27%
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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.
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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
Puri Indah
kH Mas Mansyur
Central jakarta
Bogor tangerang
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
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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).
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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.
2013F
2013F
2012F
2012F
2011
2011
sq m
sq m
Colliers International Indonesia - research
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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
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
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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.
2011
Middle Upper
Middle Low
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%.
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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.
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Serang 21%
jakarta 10%
karawang 36%
tangerang 5%
Colliers International Indonesia - research
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.
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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.
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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.
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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
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| colliers international
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.
$0.06 $0.04 $0.02 $0.00 1Q 2009 2Q 2009 Bogor 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011
tangerang
karawang
Bekasi
Serang
Land Price (sq m) Lowest US$ 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
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.
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jakarta | 4q 2011
$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.
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