Indonesia property sector set for further growth

Indonesian property businesses, particularly in Jakarta, are viewing favourable conditions allowing for further growth next year.

However, it must be noted that the magnitude of the sector’s growth next year will not be great as that in the recent three years. Analysts agreed that significant growth would be seen, according to Amran Nukman, the Jakartan branch chairman of the Indonesian Real Estate Association (REI).

Chairman Nukman explained property businesses will continue to gradually grow next year. During 2012 we saw the sector rise from 40 to 60%. Next year, 10 to 20% growth is expected. This growth is considerably good with next year’s likely favourable economic conditions.

The optimism that the sector is to develop next year, takes into consideration the Jakarta administration’s support on property businesses in the city. 

Cushman and Wakefield's worldwide retail report - Brought to you first by Commercial People

A global retail report from Cushman and Wakefield today, showed global trends continue to stay positive for shopping centre development. Crucial additions to supply are expected between now and 2016 within major emerging markets such as Brazil, China, India, Indonesia and Russia.

Signaling well for the property industry are the remarkable increase in ultra-high net worth individuals worldwide and improving global economic fundamentals, plus stronger consumer confidence. Global GDP is assumed to grow at a 3.4% rate, the highest since 2011. Household spending will contribute significantly to GDP gains, lead by spending in the U.S., E.U. and China. China is still assumed to record a global best at a 4.5% rise in consumer spending during this year, which will rise further to 5.1% next year.

Property investment volume increase in Asia Pacific

This year, Cushman and Wakefield assume that the Asia Pacific’s markets will continue to strive, parallel to the rising worldwide economy and growing domestic demand.

The gradual rise in property investment within the Asia Pacific supports the assumption – Cushman and Wakefield predict a 7 to 8% increase in the activity.

The Asia Pacific region saw an increase in investment within all areas of the Asia Pacific in 2013, with a 25% increase delivering a volume of US$568.6billion at the end of the year, equivalent to 48% of the global market.

Cushman and Wakefield concluded that rises would continue for at least two years as economic growth results in growing demand within the property industry, which in turn pushes rent higher.