Office space in Jakarta to increase

Foreign investors looking to expand their presence in Indonesia over the upcoming four years will find generous office options to choose from in Jakarta, according to a report from worldwide real estate services firm Colliers International.

Whilst total office space in Jakarta rose by just 1% during the first half of 2014, the capital will see an accumulated 10.7million square metres of new office space developed by 2018, up 51% from today‘s 7.1million square metres, according to the report released last Wednesday.

The projection assumes 74 buildings currently under construction or being planned will be completed on schedule. The increase will result in a decrease in office occupancy to under 90% from 96% at the end of the former half.

A sizeable supply projection in the CBD will definitely have a great impact upon the weakening figure of asking base rental and occupancy rates, as reported by Colliers.

Average asking base rental rates increased to Rp252,114 ($21.54) per square metre each month during the first half, up 2% year-on-year. The asking base is dollars, increased by 4.5% to $36.30 per square meter each month.

Demand for new office space is usually increased by a boost in foreign direct investment. Foreign investors contributed Rp78trillion or $7.4billion, towards the country between April and June. FDI during the second quarter grew by 6.9% from last year and 8.3% from the previous quarter, according to the Investment Coordinating Board.

Colliers also noted that retail space supply in Jakarta and the capital’s satellite cities remained steady at 6.56 million square metres during the first half of 2014, boosting asking base rental rates by 11% in those areas.