Research & Forecast Report Q2 2016
Jakarta Property Market Report
Accelerating success.
Highlight Office Sector
Retail Sector
Office demand has dwindled for the last two years, bolstering the negotiating position of tenants in the market. Newly operating office buildings added further downward pressure on rents because of the additional vacant space they have added to the supply.
Bassura City Mall was the only new shopping centre in Jakarta during H1 2016 contributing around 21,000 sq m of retail space. Thus far, occupancy performance and rental rates are relatively stable. Average asking rent was recorded at IDR566,087/sq m/month as of Q2 2016.
Apartment Sector During the quarter, apartment sales performance continued to languish with a moderate 0.5% growth in price compared to the previous quarter. There were 4,777 new units from the handover of a total of eight apartment towers from five projects. The cumulative supply of strata-title apartments in Jakarta grew by 2.9% QoQ or 12.4% YoY to a record 167,697 units. Prices of apartments have been relatively flat as most of the projects hold prices in order to attract buyers. The average asking price of apartments in Jakarta was recorded at IDR31 million/sq m (excluding VAT), increased modestly by 0.5% QoQ.
Expatriate Housing Sector There were signs of recovery during H1 2016 with number of repeat corporate clients who signing new one-year lease contracts. Many companies employing expats are currently only willing to commit to a maximum one-year contract; very few of them are willing to accept two years rent in advance.
2
Industrial Estate Sector The industrial market has yet to recover from the generally slow sales performance which has led to further downward pressure on industrial land prices. Two industrial estates reportedly introduced prices which were lower this quarter by an average of 8%.
Hotel Sector Three new hotel projects began operation in Jakarta during the last quarter. In the 3-star category, Archipelago International (131 rooms) and Liberty hotel (60 rooms) opened. In the 4-star hotel category, Accor opened a Mercure brand hotel providing 207 rooms. Total star-rated hotels in Jakarta now total 37,695 rooms from 182 projects. The AOR increased 4.9% to 56.7% QoQ and the Jakarta ADR slightly increased by 0.15% to USD82.65 in Q2 2016Q.
Quarterly Report | Q2 2016 | Jakarta | Colliers International
CBD Office Cumulative Supply 8,000,000 7,000,000 6,000,000 5,000,000
Demand
Rent
About 30 buildings considerably lowered asking base rental rates during the first semester this year. Newly operating office buildings are most often prioritizing occupancy levels; therefore, we expect to see more discounted rental rates.
2,000,000 1,000,000
Existing Supply
Additional Supply
Supply YTD
2019F
2018F
2017F
2016F
0
2015
Occupancy continued its two year declining trend and this quarter was recorded at 85.6%, the lowest since 2005. Going forward, given a moderate GDP growth projection and huge projected supply, occupancy rates might drop an additional 3% by the end of 2016.
3,000,000
2010
Occupancy
4,000,000
sq m
Infrastructure-related companies including those building roads and power plants are becoming more common tenants while insurance, bank and other finance-related companies remain active in searching for space.
2014
Three office buildings (Sinarmas MSIG, IFC 2 and Capital Place) began operation this quarter contributing 215,511 sq m bringing the cumulative office supply in the CBD to 5.46 million sq m. A total of 11 office buildings are expected to be completed in 2016 adding 670,000 sq m of office space to supply.
CBD
2013
Supply
Office Spaces Offered For Lease
2012
Forecast at a glance
Supply
2011
Office Sector
Future Supply
Source: Colliers International Indonesia - Research
Eleven office buildings are expected to be completed, providing a total of around 670,000 sq m of additional office spaces in 2016. As of Q2 2016, after Centennial Tower officially began operation last quarter, three office buildings opened afterwards, which include Sinarmas MSIG, International Financial Centre 2 and Capital Place. These three office buildings contributed 215,511 sq m of spaces, bringing about a total, cumulative office area in the CBD to 5.46 million sq m, as of Q2 2016. With several office buildings in the pipeline, we expect more new buildings to be completed in the second semester to provide about 5.81 million sq m by the end 2016, or a growth of 12.2% YoY.
CBD Annual Supply
More office buildings in the CBD are being demolished. Two old and relatively small office buildings – Wisma Sudirman and Nugra Santana – will likely be torn down in the future. Thus far, these buildings are still in operation.
750,000
600,000
In Rasuna Said, Graha Surya Internusa was demolished last year and will be replaced by SSI Tower. Construction has already commenced. Other office buildings are on schedule to be completed in 2020. Two land plots in Sudirman will potentially become future office buildings developed by two foreign developers. Pertamina also indicated to build a new tower in Rasuna Said.
Quoted from Colliers’ earlier report, 35 office buildings will be completed between 2016 and 2019, creating 2.38 million sq m of new office spaces. However, we revised this projection as of Q2 2016 due to the change in the completion schedule of a few buildings. The current projected number for the same period slightly decreased to 2.28 million sq m, contributed by 34 office buildings. Three office buildings decided to reschedule their completion after 2019.
CBD Cumulative Supply Based on Area Satrio Gatot Subroto Mega Kuningan Rasuna Said
Looking at how things are progressing, the construction of most of the new office buildings is already underway. Around 70% of the total number of office buildings that are scheduled for completion in 2018 – 2019 have already began construction works.
Sudirman Thamrin
There is also a very likely option to redevelop existing projects, to allow landlords to maximise plot ratio of the land. With a primary location near future MRT stations in Sudirman, at least four developers plan to redevelop their existing office buildings and replace them with modern and taller buildings. Two office buildings within a commercial compound were already demolished in 2015. By this quarter, the developers have started redeveloping a new tower, Centennial Millennium, after demolishing two office towers – CIMB Plaza and Sequis Plaza. Scheduled for completion in 2019, Centennial Millennium would provide around 100,000 sqm of office spaces.
4
0
On the back of a buoyant, long-term growth projection of Indonesia’s economy, some developers (international and local) plan to launch their new office projects in the CBD. Five office buildings (not yet included in the pipeline list) with leasable area around 80,000 sq m will be developed around Rasuna Said and Sudirman.
3,500,000
Source: Colliers International Indonesia - Research
3,000,000
2019F
In Planning
2,500,000
Under Construction
2018F
2017F
2016F
2015
2014
2013
2012
Supply YTD
2,000,000
Additional Supply
2011
2010
0
Four office buildings that will occupy more than 50,000 sq m will make the Gatot Subroto submarket the biggest office space contributor in 2016. Gatot Subroto will contribute 47% of the total additional office spaces in 2016, larger than Sudirman by 19%. However, given a huge projected supply in 2017 – 2018, Sudirman will still be the major contributor of office spaces in the future. Sudirman will see a total of 754,805 sq m of additional office spaces that will be contributed by nine office buildings.
1,500,000
150,000
1,000,000
300,000
500,000
sq m
450,000
sq m Cumulative Supply by 2015
Supply in 2016
Projected Supply 2019F
Source: Colliers International Indonesia - Research
In the CBD, the “office for lease” type is the most common office type. After a dormant 2013 – 2014, the “office for sale” (strata-title office) type started to inflate in number. The annual supply projection of strata-title offices will be 320,000 sq m per annum, from 2016 to 2019. Except in 2019, the annual supply might go down, but the number is not fixed because anything that would be available in 2019 could only be seen in the next quarters. From 2016 to 2018, about 14 future office buildings will produce 842,820 sq m of office spaces for sale, 59% higher than office spaces for lease.
Quarterly Report | Q2 2016 | Jakarta | Colliers International
CBD Annual Supply Based on Marketing Scheme 500,000 450,000 400,000 350,000
From 2016 to 2019, the projected cumulative supply in TB Simatupang will grow moderately, with an additional seven new office buildings. Cibis Tower, South Quarter Tower 3 and Zuria Tower will become available and are expected to begin operation by the end of 2016.
Outside the CBD Cumulative Supply
300,000
3,000,000
sq m
250,000 200,000
2,500,000
150,000 2,000,000
100,000 50,000
2010
2012 For Lease
2014
2016F
2018F
sq m
1,500,000
0
1,000,000
For Sale 500,000
Source: Colliers International Indonesia - Research
0 2010
Outside the CBD
TB Simatupang
West Jakarta East Jakarta North Jakarta South Jakarta Central Jakarta
1,200,000
1,000,000
800,000
600,000
TB Simatupang
sq m Cumulative Supply by 2015
Supply in 2016
Source: Colliers International Indonesia - Research
Meanwhile, some developers have a different perspective and see such construction developments over the next few years with alarm, and therefore might reschedule their project launch time.
5
2018F
Outside the CBD Cumulative Supply Based on Area
400,000
We expect to see additional 381,059 sq m of office spaces outside the CBD in 2016, 40% of which has already begun operation in the first semester. All future office buildings for 2016 will likely be finished as scheduled this year, based on how the current construction is progressing. Thus far, from the list of future office buildings in 2017 to 2019, almost 50% are already under construction. About three office buildings will probably start construction faster than scheduled, two of which – The Manhattan Tower 2 and Arkadia Tower G – are located in TB Simatupang.
2016F
Source: Colliers International Indonesia - Research
200,000
At least 10 office buildings have been in operation outside the CBD YoY. The market is anticipating another nine office buildings to be completed by the end of 2016, and this will bring a cumulative supply to over 3 million sq m. In 2016, new office buildings will still be mainly found in South Jakarta (50% of the total office spaces in 2016). In South Jakarta, Mampang and Pasar Minggu corridors arose as new potential commercial areas for office development, besides the already established TB Simatupang and Pondok Indah areas.
2014
Outside CBD excl. TB Simatupang
0
As of Q2 2016, five office buildings officially began operation outside the CBD. Some of these buildings are found in South Jakarta – L’Office, Office Tower at Niffaro and Nariba Office Tower. One is in West Jakarta (Soho Capital at Podomoro City) and another in North Jakarta (Altira). The total area of new office spaces this quarter is 150,000 sq m, bringing a cumulative supply to 2.89 million sq m, for a growth of 12% YoY.
2012
Quarterly Report | Q2 2016 | Jakarta | Colliers International
Projected Supply 2019F
Outside the CBD excluding TB Simatupang Annual Supply
TB Simatupang Annual Supply 300,000
300,000
250,000
250,000
200,000
200,000
150,000
sq m
150,000
50,000
50,000
Annual Supply
Additional Supply YTD
Under Construction
In Planning
Annual Supply
Additional Supply YTD
Under Construction
In Planning
2019F
2018F
2017F
2015
2014
2013
2016F
2019F
2018F
2017F
2016F
2015
2014
2013
2012
2011
2010
0
2012
2010
0
2011
sq m
100,000
100,000
Source: Colliers International Indonesia - Research
Source: Colliers International Indonesia - Research
New Supply Pipeline projected completion
Office building projects name
location
SGA* (sq m)
Marketing scheme
status development
CBD 2016
Telkom Landmark Tower II
Gatot Subroto
65,000
For Lease
Under Construction
2016
Convergence
Rasuna Said
36,367
For Lease & Sale
Under Construction
2016
Menara Palma 2
Rasuna Said
50,000
For Lease
Under Construction
2016
Ciputra World Jakarta 2
Satrio
70,000 For Lease & Sale
Under Construction
2016
Satrio Tower
Satrio
31,604
For Lease
Under Construction
2016
The Tower
Gatot Subroto
56,492
For Sale
Under Construction
2016
Menara Pertiwi
Mega Kuningan
41,456
For Sale
Under Construction
2017
PCPD Tower
Sudirman
90,500
For Lease
Under Construction
2017
T Tower
Gatot Subroto
24,000
For Lease & Sale
Under Construction
2017
Lippo Thamrin Office Tower
Thamrin
16,500
For Sale
Under Construction
2017
Prosperity Tower (within District 8 complex)
Sudirman
71,545
For Sale
Under Construction
2017
Treasury Tower (within District 8 complex)
Sudirman
139,000 For Sale
Under Construction
2017
Sopo Del Tower B
Mega Kuningan
39,200 For Sale
Under Construction
2018
Mangkuluhur Tower
Gatot Subroto
53,000 For Lease & Sale
Under Construction
2018
Sopo Del Tower A
Mega Kuningan
64,000
For Lease
Under Construction
2018
Sequis Tower
Sudirman
78,000 For Lease
Under Construction
2018
Sudirman 7.8 (ex Nugra Santana)
Sudirman
52,000 For Sale
Under Construction
2018
Tower Two at The City Center
Sudirman
101,260 For Lease
Under Construction
2018
World Trade Center III
Sudirman
70,000 For Lease
Under Construction
2018
World Capital Tower
Mega Kuningan
72,000 For Lease & Sale
Under Construction
2018
Tower 2 @ Ciputra World Jakarta 1
Satrio
70,000 For Lease & Sale
Under Construction
2018
Astra Tower
Sudirman
80,000
For Lease
Under Construction
2019
Icon Tower
Sudirman
72,500
For Lease
Under Construction
2019
Thamrin Nine
Thamrin
97,500 For Lease
Under Construction continued
6
Quarterly Report | Q2 2016 | Jakarta | Colliers International
projected completion
Office building projects name
location
SGA* (sq m)
Marketing scheme
status development
continuation 2019
Indonesia Satu
Thamrin
150,000
For Lease
Under Construction
2019
The Hundred
Mega Kuningan
45,000
For Lease
In Planning
2019
Chitaland
Satrio
90,000 For Lease
2019
Plaza Gani Djemat 2
Thamrin
2019
Gran Rubina Tower 2
Rasuna Said
2019
Centennial Millenium
Sudirman
8,000 For Lease 32,000 For Sale 100,000 For Lease
Under Construction In Planning In Planning Under Construction
Outside CBD exclude TB Simatupang 2016
ST Moritz Office Tower
Puri Indah
19,500
For Sale
Under Construction
2016
Puri Indah Financial Tower
2016
Gallery West
Puri Indah
38,500
For Sale
Under Construction
Kebun Jeruk
29,000 For Sale
Under Construction
2016
Harton Tower
Kelapa Gading
2016
Tamansari Parama
Wahid Hasyim
10,800
2016
One Belpark Office
Pondok Labu
17,800 For Lease
Under Construction
2017
Soho Pancoran
Pancoran
30,000 For Sale
Under Construction
2017
BKP Office Tower
Sunter
16,000
Under Construction
2017
Hermina Office Building
Kemayoran
20,000 For Sale
Under Construction
2017
Ciputra International Puri 1 Phase 1
Puri
15,000
For Lease
In Planning
2017
Ciputra International Puri 2 Phase 1
Puri
20,000 For Lease
In Planning
2017
Ciputra International Puri 3 Phase 1
Puri
30,000 For Lease
In Planning
2018
Lippo Tower Holland Village
Cempaka Putih
27,000 For Sale
In Planning
2018
One Tower
Kemayoran
21,400
For Sale
Under Construction
2018
Ciputra Twin Tower 1
Kemayoran
40,000 For Sale
Under Construction
2018
Ciputra Twin Tower 2
Kemayoran
40,000 For Lease
Under Construction
2018
Ciputra International Puri Phase 2
Puri
15,000
For Lease
In Planning
2018
Ciputra International Puri 1 Phase 3
Puri
15,000
For Lease
In Planning
2018
Ciputra Internatinal Puri 2 Phase 3
Puri
15,000
For Lease
In Planning
2019
MNC Tower II
Kebon Sirih
60,000 For Lease
Under Construction
2019
Jakarta Box Tower
Kebon Sirih
36,000
For Lease
In Planning
40,778
For Lease
Under Construction
6,584
For Lease
Under Construction
8,000 For Lease For Sale
For Lease
Under Construction Under Construction
TB Simatupang 2016
South Quarter Tower 3
2016
Zuria Tower
2016
Cibis Tower
60,800 For Lease & Sale
Under Construction
2018
The Sima
60,000 For Lease
Under Construction
2018
Beltway Office Park Tower 4
30,839
For Lease
In Planning
2019
Arkadia Tower G
30,000 For Lease
In Planning
2019
The Manhattan Square Tower 2
39,375
In Planning
Source: Colliers International Indonesia - Research
7
Quarterly Report | Q2 2016 | Jakarta | Colliers International
For Lease & Sale
Demand CBD Occupancy Changes in the CBD Office Building Grade
Q4 2015
All Classes
YTD
89.4%
Q2 2016
YoY
Q2 2015
85.6%
93.7%
Grade A
85.5%
79.4%
95.8%
Premium Classes
88.5%
87.4%
81.5%
Source: Colliers International Indonesia - Research
Occupancy rate revealed a declining trend in the last two years. As of Q2 2016, occupancy was recorded at 85.6%, which is a historic low since 2005. A considerable decline in occupancy by 3% QoQ was mainly triggered by the influx of more than 200,000 sq m additional office spaces during the quarter and mainly with high vacancy. Also, occupancy performance of some old office buildings dropped since old tenants have relocated.
The pre-committed occupancy of office spaces for lease in 2015 and 2017 also grew slowly. Thus far, pre-committed occupancy only reached 43.4% as of Q2 2016. The market has been through the first half of 2016, nevertheless only 35% of the total office space in 2016 has been absorbed. Further, only 54% of the total new office spaces available in 2015 were absorbed. Given a normal annual demand projection in the CBD, which used to range around 250,000 sq m, this year would be a very challenging situation for office market to catch up with the huge number vacant spaces. The good thing so far is that the amount of 2017 annual supply will be marginal, which would help stabilise the market, although the number of strata-title will be quite significant.
Pre-Committed Occupancy of Office Buildings for Lease in the CBD (2015 – 2017)
2017F
Occupancy generally plunged across all office grades. With the absence of new supplies during the quarter, occupancy of premium buildings was also down. Historically, occupancy of premium buildings hovered at above 90% since 2010. More vacant spaces were seen during the quarter in three premium office buildings. Overall occupancy rate of offices at this grade was down 2% to 87.4%.
2016F
2015
Average Occupancy Rates in the CBD 0
100%
100,000 Space Absorbed
95%
300,000
Space Unabsorbed
400,000
sq m
Source: Colliers International Indonesia - Research
90%
Outside the CBD
85%
Occupancy Changes in Outside the CBD
80%
area
89.4%
85.6%
93.7%
75%
Outside the CBD excluding TB Simatupang TB Simatupang
88.5%
87.4%
81.5%
70%
Q4 2015
YoY
Q2 2016
QoQ
Q2 2015
Source: Colliers International Indonesia - Research
2010
2011 Premium
2012
2013 Grade A
Source: Colliers International Indonesia - Research
8
200,000
2014
2015
2016YTD
All Classes
As of Q2 2016, the overall occupancy rate outside the CBD continued on a downward trend and was registered at 84.7%. At least nine office buildings still have more than 10,000 sq m of vacant spaces. All of these office buildings began operation in 2015 and 2016. The openings of new office buildings in West, North and South Jakarta also negatively impacted occupancy rates.
Quarterly Report | Q2 2016 | Jakarta | Colliers International
Without additional new office buildings in the market, the occupancy rate was also down in TB Simatupang. Quite a few office buildings located in TB Simatupang, including Pondok Indah, reported a drop in occupancy.
Average Occupancy Rates in Outside the CBD
Asking Rents CBD Average Asking Rents Based on Building Grade IDR600,000
100%
IDR525,000
90% 80%
IDR450,000
70%
IDR375,000
60%
IDR300,000
50% IDR225,000
40% 30%
IDR150,000
20%
IDR75,000
10%
IDR0
0% 2010
2011
2012
2013
Outside CBD exclude TB Simatupang
2014
2015
Premium
2016YTD
TB Simatupang
Source: Colliers International Indonesia - Research
Pre-Committed Occupancy of Office Buildings For Lease in Outside the CBD (2015 – 2017)
Grade A Q2 2015
Grade B
Grade C
Q2 2016
Source: Colliers International Indonesia - Research
Average Asking Rents in the CBD IDR750,000
IDR600,000 2017F IDR450,000
IDR300,000
2016F
IDR150,000 2015
IDR0 2008 0
30,000
60,000
Space Absorbed Source: Colliers International Indonesia - Research
9
90,000
Vacant Space
2012
Premium Class
120,000
sq m
2010
2014
2016YTD
All Classes
Source: Colliers International Indonesia - Research
In general, the average asking rents in the CBD for all classes of building were down during the first semester of 2016. About 30 buildings were reported to have lowered their rent quite considerably during this period. However, several GradeA buildings are becoming new supplies, and are now offering more expensive rental rates compared with the average market. Most of these newly operating buildings started with a high vacancy rate. And because our rental calculation is based on the space available (vacant space), the overall rental rates seems to increase. YTD rental rate changed by 4.2% to record IDR346,222/sq m/month, as of Q2 2016 for all classes of building in the CBD.
Quarterly Report | Q2 2016 | Jakarta | Colliers International
The average base rental for Premium buildings also dropped by 1.3% QoQ. Two buildings of this class lowered their asking rent by 10% during the quarter, thus bringing the average rents to IDR472,293/sq m/month.
Average Asking Rents Based on Building Area
As of Q2 2016, the overall rental rate outside the CBD and in TB Simatupang slightly decreased QoQ to a record IDR224,734/ sq m/month. Four office buildings located outside TB Simatupang lowered their rents by as much as 30%. Further, the rental rates for newly operating office buildings are relatively below the market price. In TB Simatupang, average asking rents dropped by 10% for the last six months to IDR242,033/sq m/month. Subsequent to the booming office market in 2012, TB Simatupang continued to become a favourite location, and thus pushed rents to move forward. In some cases, rents were offered at IDR250,000 to IDR350,000/sq m/month. Nevertheless after 2014 – 2015, demand for office spaces contracted, forcing landlords to adjust rents to be more favourable to the market. Nowadays, landlords are quite cautious about the current slowing down, and thus change the overall rental tariff in this area by as much as 20%.
IDR500,000
IDR400,000
IDR300,000
IDR200,000
IDR100,000
Average Asking Rents Based on Building Grade in Outside the CBD
IDR0 Thamrin Sudirman Rasuna
Q2 2015
Mega Gatot Kuningan Subroto
Satrio
IDR350,000 IDR300,000
Q2 2016
IDR250,000
Source: Colliers International Indonesia - Research
IDR200,000
Outside the CBD
IDR150,000
Average Asking Rents in Outside the CBD
IDR100,000
IDR300,000
IDR50,000 IDR250,000 IDR0 2010
IDR200,000
Grade A
2012 Grade B
IDR150,000 Source: Colliers International Indonesia - Research
IDR100,000 IDR50,000 IDR0 2010
2012 Outside CBD
2014
2016YTD
TB Simatupang
Source: Colliers International Indonesia - Research
10 Quarterly Report | Q2 2016 | Jakarta | Colliers International
2014 Grade C
2016YTD All Classes
Service Charges
Outside the CBD
CBD
Service Charges in Outside the CBD
Service Charges in the CBD
IDR150,000
IDR150,000 IDR120,000 IDR120,000 IDR90,000 IDR90,000 IDR60,000 IDR60,000 IDR30,000 IDR30,000 IDR0 Grade A
IDR0 Premium
Grade A
Grade B
Grade C
Source: Colliers International Indonesia - Research
As of Q2 2016, average service charge increased 3.9% YTD and was recorded at IDR80,2015/sqm/month. Due to the influx of newly operating office buildings, the average service charge costs for Grade-A buildings registered the highest YTD growth, compared with other grades. As of Q2 2016, service charge was recorded at IDR81,744/sq m/month for Grade-A office buildings. Lower grade offices may charge higher maintenance tariff. Some Grade-C office buildings in Rasuna Said ask for a more expensive price. However, the overall occupancy costs (base rent and service charge) will be in line with the class and quality of the buildings.
Grade B
Grade C
Source: Colliers International Indonesia - Research
The average service charge outside the CBD climbed 9.3% YoY to IDR58,037/sq m/month. Since there is only a few Grade-A office buildings outside the CBD, the figure presented may not well represent the market. This is why the service charge for Grade-A buildings is below IDR100,000/sq m/month only. Although lower-grade buildings reveal higher service charges, the overall occupancy cost (base rental and service charge) are still more expensive in higher-class buildings. In TB Simatupang, service charges increased 4.6% QoQ and reached IDR62,900/sq m/month. Several office buildings have introduced a new tariff with increment starting from IDR5,000 to IDR15,000.
11 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Strata-title Office Pre-Committed Take-up Rates of Office Buildings For Sale in the CBD (2015 – 2018)
Average Asking Prices at New and Future Office Buildings TB Simatupang
2018F Outside the CBD 2017F
Space Absorbed
210,000
280,000
Vacant Space
350,000
sq m
Source: Colliers International Indonesia - Research
Pre-Committed Take-up Rates of Office Buildings For Sale in Outside the CBD (2015 – 2018) 2018F
IDR100,000,000
140,000
IDR80,000,000
70,000
IDR60,000,000
0
IDR40,000,000
IDR0
2015
IDR20,000,000
CBD
2016F
Source: Colliers International Indonesia - Research
The sales volume of strata-title office spaces in 2016 – 2018 increased around 6% QoQ. The absorption brought the average pre-committed take-up rate to reach around 60% of the total office space for sale (strata-title office) in 2016 – 2018. Meanwhile, for a shorter period, pre-committed take-up rate of offices for sale in 2016 – 2017 achieved around 80% as of Q2 2016. Two future office buildings in Mega Kuningan sold a substantial amount of office spaces, which helped the overall sales performance. Increasing sales triggered office prices of future office buildings in the CBD to rise to IDR61.3 million/sq m or grew 16.7% YTD. Currently, the asking prices at future strata-title office buildings are between IDR40 million and IDR70 million/sq m. We also noted that some unoccupied spaces in existing office buildings and buildings under construction are offered at the secondary market between IDR40 million and IDR95 million/ sq m.
2017F
2016F
2015
0
50,000
100,000
Space Absorbed
150,000
200,000
Vacant Space
Source: Colliers International Indonesia - Research
250,000
sq m
The total area of projected strata-title offices outside the CBD was recorded below 400,000 sq m by 2018, of which 65% has already been sold. However, we only recorded a small absorption of below 3,000 sq m QoQ. The slowdown in sales held asking prices to stay at IDR29 million/sq m. Meanwhile, prices were relatively flat in TB Simatupang YoY and registered between IDR28 million and IDR38 million/sq m.
12 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Concluding Thought From a tenant’s perspective, we have started seeing a sign of recovery highlighted by mounting office enquiries, despite being yet in relatively modest volume. Potential tenants are quite eager to execute transactions, but such transactions will typically be in considerable sizes, between 100 and 400 sqm. There are quite varied enquiries from different sectors, as we have not yet seen any specific business sector dominating office enquiries. As mentioned above, occupancy rates relatively slowed down. Therefore, even though we have begun to observe increasing leasing activities, transactions typically come from relocation activities and a few relocations with space expansion or even space reduction. This “in and out” activity did not really help fuel the overall occupancy level, because of fewer expansion activities from existing tenants or new investors. Having said that, we should be more optimistic towards the market condition over the next semester, provided that economy will continue to grow as projected. We also hope that the government is committed to accelerating economy growth by implementing economic deregulation packages including REITs, materialising all the infrastructure plans and getting the green light from the parliament to execute tax amnesty regulation. Going forward, oversupply condition remains the main concern. We believe, however, that the new plan to build more office buildings would only happen after 2019, considering that many landlords are already fully aware about the current situation.
13 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Quarterly Report
JAKARTA | OFFICE
Accelerating success.
Q2 2016
Apartment Sector Forecast at a glance Supply
Jakarta will see an additional 15,442 units for the remainder of 2016 and a total 25,222 units in 2017.
Demand
Although the market saw an increase in launching activity, buying sentiment has remained lukewarm; investors and end-users are holding their plans to buy apartments in view of the current economic slowdown. We opine that take-up rates will continue to hover at between 86% and 87%.
Rent
Given a drop in the expatriate community, we expect asking rental rates will remain unchanged until the end of 2016.
Price
We predict an 9% to 11% increase in the average asking price for apartments for sale due to the higher prices quoted by future apartment projects which will open by the end of the year.
APARTMENT FOR STRATA-TITLE Supply By the end of the second quarter of 2016, cumulative supply of strata-title apartments in Jakarta had grown at a moderate pace of 2.9% QoQ, equal to 12.4% YoY, to a record 167,697 units. During this quarter, the market received 4,777 new units from the handover of eight apartment towers in five projects, including The Green Pramuka, Royal Springhill, Bassura City, Casablanca East Residence and 19 Avenue. In terms of market segment, middle-lower class apartments dominate the current additional supply at 86.4% of three projects located in nonprime areas. Green Pramuka City (Orchid and Penelope Towers) and Royal Springhill (Bouvardia and Bulgari Towers) are both located in Central Jakarta; however they are targeting different market segments, i.e. middle-low and middle-upper, respectively. Meanwhile, East Jakarta continued to see new middle-low class projects from the opening of Bassura City (Edelweiss Tower) and Casablanca East Residence (Dallas & Casablanca Towers). In West Jakarta, 338 additional units came from the completion of a mid-rise apartment project, 19 Avenue (Tower A). 19 Avenue was previously a stalled Rusunami (low-cost apartment) project called Orchard Place Residence, developed by PT Bintang Milenium Indonesia. It was acquired by Margahayu Land, who changed the name. Targeting the same low segment, fully furnished 19 Avenue (Tower A) apartments are offered at prices ranging from IDR400 million to IDR600 million per unit. As of the middle of 2016, about 40.6% of the 26,583 projected units which will be completed this year have been handed over, leaving about 15,793 units to be handed over in the next semester.
List of Completed Apartment Projects as of Q2 2016 Name of development
location
region
developer
units 2,000
The Green Pramuka (Tower Orchid & Penelope)
Jl. Jenderal Ahmad Yani
Central Jakarta
PT Duta Paramindo
The Royal Springhill (Tower Bouvardia & Bulgari)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
Springhill Golf Group
Bassura City (Tower Edelweiss)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
1,000
Jl. Pahlawan Revolusi
East Jakarta
Binakarya Propertindo
1,127
Daan Mogot
West Jakarta
Margahayu Land
Casablanca East Casablanca)
Residence
(Tower
Dallas
&
19 Avenue Apartment (Tower A)
312
338 Total
4,777
Source: Colliers International Indonesia - Research
same period in 2015. This suggests that developers are generally quite cautious over the current market condition, with considerable supply going forward and, to some extent, slow absorption.
Strata-title Apartment Annual Supply 30,000
25,000
East Jakarta hosts about 87% of the total newly introduced/ launched units from two projects: East 8 and Prajawangsa City. East 8, developed by Karya Cipta Group, is targeted at the middle-lower segment, particularly workers in the surrounding areas. East 8 apartment is located in a settled residential area and will benefit from easy accessibility to public transportation, including the future LRT and the existing Jagorawi toll road. With a similar target market, Prajawangsa City, developed by Synthesis Development, together with St. Carolus Vereeniging, claims to be an improvement on their previous project, Bassura City, with bigger units and more green space.
20,000
15,000
10,000
5,000
2020F
2019F
2018F
2017F
2016F
2015
2014
2013
2012
0
Source: Colliers International Indonesia - Research
Newly Launched Projects During this quarter, Jakarta’s apartment market saw a moderate addition of newly launched/introduced projects. Four brand-new projects with 5,946 units initiated pre-sale activities in Q2 2016 and are expected to be completed in the next four years. The number of units being introduced/launched is 20% lower than the
Another new project by Synthesis Development is Samara Suites, which was previously launched as The Residence at Gatot Subroto, which offered bigger units and higher prices. Subsequently, the developer revised the concept, including the floor plan, unit size and pricing strategy, in order to meet the budget of buyers. As of the end of May, 60 units in Samara Suites have been booked. Another project located in a so-called expatriate area, Lavish Residence Kemang, offers a single apartment tower and targets the middle-upper segment. Lavish Kemang Residence is developed by PT Kemang Karya Utama, which has extensive experience in developing houses and townhouses for expatriates.
List of New Introduced/Launched Projects in Q2 2016 Name of development Prajawangsa City (8 towers)
LOCATION Jl. Raya Bogor, Cijantung
region
Expected completion time
East Jakarta
2020
estimated price (idr/sq m)*
total Units
IDR 11,350,000
4,000
East 8 (2 towers)
Jl. Raya Lap. Tembak, Cibubur
East Jakarta
2020
IDR 13,500,000
1,172
Samara Suites
Jl. Gatot Subroto
South Jakarta
2019
IDR 26,350,000
300
Lavish Kemang Residence
Jl. Kemang Raya No.78A
South Jakarta
2019
IDR 35,000,000
474
*) Price based on hard cash excludes VAT 10% Source: Colliers International Indonesia - Research
15 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Number of Apartment Units and Projects being Introduced/Launched Every Quarter
6
1,500
3
0
0
#Units
Q3 2015
Q2 2016
3,000
Q1 2016
9
Q4 2015
4,500
Q2 2015
12
Q1 2015
6,000
Q4 2014
15
Q3 2014
7,500
Q1 2014
The mood in the apartment market has been subdued, as reflected in the limited number of newly introduced/launched projects in recent quarters. In general, some developers have opted to postpone the launch date of their projects due to a lack of confidence in the current market situation. Moreover, the overall Indonesian economy faces a number of downside risks, such as slow economic growth and lowered consumer confidence, which impacts project decisions by developers.
Q2 2014
The total number of apartment units launched during 2Q 2016 was 5,946.
#Projects
Source: Colliers International Indonesia - Research
New Pipeline Apartment name
location
region
developer
#units
Status
2016 The Green Pramuka (Tower Orchid)
Jl. Jenderal Ahmad Yani
Central Jakarta
PT Duta Paramindo
1,000 Built
The Green Pramuka (Tower Penelope)
Jl. Jenderal Ahmad Yani
Central Jakarta
PT Duta Paramindo
1,000 Built
The Royal Springhill (Bouvardia Tower)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
Springhill Golf Group
The Royal Springhill (Bulgari Tower)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
Springhill Golf Group
192 Built
Casablanca East Residence (Tower Dallas)
Jl. Pahlawan Revolusi
East Jakarta
Binakarya Propertindo Group
408 Built
Casablanca East Residence (Tower Casablanca)
Jl. Pahlawan Revolusi
East Jakarta
Binakarya Propertindo Group
719 Built
Bassura City (Tower Edelweiss)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
1,000 Built
Bassura City (Tower Dahlia)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
1,000 Built
Green Bay Pluit (Sea View)
Jl. Pluit Karang Ayu
North Jakarta
Agung Podomoro Group
2,072 Built
120
Built
Kemang Village (The Bloomington)
Jl. P Antasari
South Jakarta
Lippo Karawaci
150 Built
Four Winds
Jl. Permata Hijau Raya No.1
South Jakarta
PT. Tri Tirta Permata
140 Built
Metro Park Residence
Kebon Jeruk
West Jakarta
Agung Podomoro Group
1,451
Madison Park
Tanjung Duren
West Jakarta
Agung Podomoro Group
1,200 Built
19 Avenue Apartment 9 (Tower A)
Daan Mogot
West Jakarta
Margahayu Land
338
Built
Built continued
16 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment name
location
region
developer
#units
Status continuation
The Grove (Empyreal + Masterpiece)
Jl. HR Rasuna Said
CBD
Bakriland Development
438
Under-construction
The Residence (CWJ 2)
Jl. Prov Dr Satrio Kav 6, Kuningan
CBD
Ciputra
The Orchad Satrio (CWJ 2)
Jl. Prov Dr Satrio Kav 6, Kuningan
CBD
Ciputra
349
T - Plaza Residence (Tower A)
Jl. Penjernihan I Kav.1 Pejompongan
Central Jakarta
PT. Prima Kencana
321 Under-construction
Elpis Residence
Gunung Sahari
Central Jakarta
Sioeng Group
790 Under-construction
The Green Pramuka (Tower Scarlet)
Jl. Jenderal Ahmad Yani
Central Jakarta
PT Duta Paramindo
1,000 Under-construction
The H Residence Kemayoran (Amethyst)
Jl. Rajawali Selatan
Central Jakarta
Hutama Karya Realtindo
800 Under-construction
Bassura City (Tower Cattleya)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
600 Under-construction
Bassura City (Tower Alamanda)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
600 Under-construction
Sentra Timur Residence (Tower Tosca)
Pulo Gebang
East Jakarta
Bakriland Development
133
East Park Apartment (Tower C)
Jl. KRT Radjiman
East Jakarta
PT. Cakra Sarana Persada
550 Under-construction
Teluk Intan (Tower Saphire)
Jl. Teluk Gong
North Jakarta
PT Trika Bumi Pertiwi
1,100 Under-construction
Pluit Seaview (Tower Belize)
Pluit
North Jakarta
Binakarya Propertindo Group
557 Under-construction
Senopati Suites 2
Jl. Senopati
South Jakarta
Mahkota Asia Graha
81 Under-construction
LA City Apartment (Tower A)
Jl. Raya Lenteng Agung, Jagakarsa
South Jakarta
Pancanaka Samaktha
980 Under-construction
119 Under-construction Under-construction
Under-construction
Nine Residence
Warung Buncit
South Jakarta
Lippo Karawaci
246 Under-construction
La Venue - North Tower
Jl. Pasar Minggu
South Jakarta
PT Bintang Rajawali (Sinar Mas Group)
253 Under-construction
Senopati Suites 3
Jl. Senopati
South Jakarta
Mahkota Asia Graha
54 Under-construction
1 Park Avenue (3 Towers)
Jl. KHM Syafi'I Hadzami (terusan gandaria)
South Jakarta
Intiland
279 Under-construction
Izzara Apartment (South and North Tower)
TB. Simatupang
South Jakarta
Grage Group
542 Under-construction
Apartment Pejaten Park Residence
Jl. Warung Buncit Raya No.21
South Jakarta
Bahama Group
560 Under-construction
Kebayoran Icon
Jl. Ciledug Raya
South Jakarta
Tamara Land
256 Under-construction
One Casablanca Residence
Jl. Pal Batu
South Jakarta
Forza Land
215 Under-construction
Woodland Park (Mahogany Tower)
Jl. Pahlawan Kalibata
South Jakarta
PT. Pardika Wisthi Sarana
218 Under-construction
St Moritz (The New Ambassador Suite Tower)
Jl. Puri Indah Kembangan
West Jakarta
Lippo Karawaci
200 Under-construction
St. Moritz (New Presidential Tower)
Jl. Puri Indah
West Jakarta
Lippo Karawaci
159
The Nest Apartment
Jl. Raden Saleh Raya, Meruya Utara
West Jakarta
PT. Karya Cipta Sukses Selaras
1,100 Under-construction
Green Park View (Tower Gardenia)
Jl. Daan Mogot
West Jakarta
PT. Inten Cipta Sejati, Cempaka Group
1,200 Under-construction
Belmont Residence (TowerAthena)
Jl. Meruya Ilir
West Jakarta
Gapura Prima
193 Under-construction
Puri Mansion Apartment (Tower Amethyst)
Jl. Lingkar Luar Barat, Puri Kembangan
West Jakarta
Agung Sedayu Group
900 Under-construction
Paradise Mansion (2 tower)
Jl. Paradise Boulevard Selatan
West Jakarta
Palm Group
1,000 Under-construction
Under-construction
continued
17 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment name
location
region
developer
#units
Status continuation
2017 Sudirman Suites
Jl. Sudirman
CBD
Pikko Group
380 Under-construction
Domaine
Jl. Jend. Sudirman Kav 1
CBD
Lyman Group
186
Verde Two (Tower East)
Jl. Rasuna Said
CBD
Farpoint Realty
182 Under-construction
Under-construction
Anandamaya Residences (3 towers)
Jl. Jend Sudirman
CBD
Hongkong Land
500 Under-construction
Menteng Park
Jl. Cikini Raya No.79
Central Jakarta
Agung Sedayu Group
756 Under-construction
Holland Village
Cempaka Putih
Central Jakarta
Lippo Karawaci
400 Under-construction
Royal Suites
Kemayoran
Central Jakarta
Springhill Golf Group
450 Under-construction
The Green Pramuka (Tower Nerine)
Jl. Jenderal Ahmad Yani
Central Jakarta
PT Duta Paramindo
1,000 Under-construction
Green Signature Apartment
Jl. MT. Haryono
East Jakarta
KSO Fortuna Indonesia (Pikko)
800 Under-construction
Podomoro Park
Jl. I Gusti Ngurah Rai, Klender
East Jakarta
Agung Podomoro Group
Sentra Timur Residence (Tower Brown)
Pulo Gebang
East Jakarta
Bakriland Development
605 Under-construction
Bassura City (Tower Jasmine) 2 tower
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
2,000 Under-construction
Bassura City (Tower Heliconia)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
700 Under-construction
Pluit Seaview (Tower Ibiza)
Pluit
North Jakarta
Binakarya Propertindo Group
500 Under-construction
Pluit Seaview (Tower Bahama)
Pluit
North Jakarta
Binakarya Propertindo Group
650 Under-construction
Regatta London Tower
Jl. Pantai Mutiara
North Jakarta
Intiland
186
Under-construction
Pakubuwono Terrace Grand Tower
Kebayoran Lama
South Jakarta
PT. Selaras Mitra Sejati
435
Under-construction
3,000 Under-construction
District 8 (Tower Eternity)
Jl. Senopati
South Jakarta
Agung Sedayu
400 Under-construction
District 8 (Tower Infinity)
Jl. Senopati
South Jakarta
Agung Sedayu
280 Under-construction
Lexington Rersidence
Pondok Pinang
South Jakarta
Cowwel Development
275 Under-construction
The Aspen Peak at Admiralty (Tower C)
Jl. Fatmawati
South Jakarta
PT. Harmas Jalasveva
322 Under-construction
Sapphire Residence
Lebak Bulus
South Jakarta
PT. Bangun Lintas Shafira
37 Under-construction
La Terrasse
Jl. Deplu Raya No.12
South Jakarta
Cowell Development
111
The Foresque
Pasar Minggu, Ragunan
South Jakarta
PT Griya Karunia Sejahtera (Binakarya Propertindo Group)
The Langham Residences
Senopati
South Jakarta
Agung Sedayu Group
Antasari Heights (One Otium Residence)
Jl. Pangeran Antasari No.8
South Jakarta
PT Radinka Quatro Land
The Batik @ Pejaten
Jl. Siaga Raya
South Jakarta
Alam Kencana
137 Under-construction
La Foret Vivante
Jl. Limo, Permata Hijau
South Jakarta
PT. Mahkota Properti Indo Permata
253 Under-construction
Selatan 8 (Tower Sultan)
Kebayoran Lama
South Jakarta
Karya Cipta Group
336 Under-construction
Under-construction
660 Under-construction
57 Under-construction 360 Under-construction
The Hamilton
Jl. KHM Syafi'I Hadzami
South Jakarta
Intiland
Puri Mansion Apartment (Tower Amethyst)
Jl. Lingkar Luar Barat, Puri Kembangan
West Jakarta
Agung Sedayu Group
112 Under-construction
Puri Orchad (3 Tower)
Jl Raya Adicipta
West Jakarta
PT Adicipta Graha Kencana (Serenity Group)
3,000 Under-construction
900 Under-construction
Maqna Residence
Jl. Meruya Ilir No. 88
West Jakarta
PT. Graha Meruya
312 Under-construction
Veranda
Jl. Pesanggrahan Raya, Kembangan
West Jakarta
PT. Mutirara Puri Indah
174 Under-construction continued
18 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment name
location
region
developer
#units
Status continuation
Vittoria Residence (3 tower)
Jl. Daan Mogot
West Jakarta
PT. Duta Indah Kencana
1,100 Under-construction
Wang Residence
Jl. Panjang No 18
West Jakarta
PT. Citicon Propertindo
250 Under-construction
Taman Anggrek Residence (6 towers)
Tanjung Duren
West Jakarta
Agung Sedayu
19 Avenue Apartment (Tower B)
Daan Mogot
West Jakarta
Margahayu Land
3,000 Under-construction 416
Sycamore Suite
Puri Botanical, Joglo
West Jakarta
Jakarta Setiabudi International
125 Under-planning
Jl. Gatot Subroto
CBD
PT Buana Pasifik International
318
Under-construction
2018 Gayanti City (2 Towers)
Under-construction
Verde Two (Tower West)
Jl. Rasuna Said
CBD
Farpoint Realty
152 Under-construction
Lavie
Jl. Denpasar Raya
CBD
Wilsor Group
302 Under-construction
South Hill
Jl. Denpasar Raya
CBD
Tan Kian
611
Le' Parc
Jl. Thamrin
CBD
PT. Putragaya Wahana
100 Under-construction
Regent Residences (tower 1)
Semanggi
CBD
PT. Kencana Graha Global
100 Under-construction
The Hundred Residence
Mega Kuningan
CBD
PT. Farpoint Realty Indoneasia
100 Under-construction
The Elements Epicentrum (2 Towers)
Rasuna Said
CBD
Sinar Mas Land
372 Under-construction
Under-construction
Capitol Suites
Jl. Prapatan Raya
Central Jakarta
The Capitol Group
327 Under-construction
Holland Village (Phase II)
Cempaka Putih
Central Jakarta
Lippo Karawaci
230 Under-construction
Signature Park Grande
Jl. MT. Haryono
East Jakarta
KSO Fortuna Indonesia (Pikko)
1,100 Under-construction
Sahid Garden Residence
Ciracas
East Jakarta
Sahid Group
476 Under-planning
Gold Coast Apartment (Atlantic Tower)
Pantai Indah Kapuk
North Jakarta
Agung Sedayu
568
Under-construction Under-construction
Regatta Apartment (Tower New York)
Pantai Mutiara
North Jakarta
Intiland
186
Sedayu City (Tower Melbourne)
Jl. Pegangsaan Dua Raya
North Jakarta
Agung Sedayu
912 Under-planning
Sedayu City (Tower Darwin)
Jl. Pegangsaan Dua Raya
North Jakarta
Agung Sedayu
936
The Kensington Royal Suites (4 Tower)
Kelapa Gading
North Jakarta
Summarecon
790 Under-construction
Gold Coast Apartment (Bahama Tower)
Pantai Indah Kapuk
North Jakarta
Agung Sedayu
600 Under-construction
Under-planning
Gold Coast Apartment (Carribean Tower)
Pantai Indah Kapuk
North Jakarta
Agung Sedayu
600 Under-construction
Gold Coast Apartment (Honolulu Tower)
Pantai Indah Kapuk
North Jakarta
Agung Sedayu
600 Under-construction
Grand Marina Ancol
Ancol
North Jakarta
PT. Bangun Setia Cipta (Jaya Ancol)
672 Under-planning
Bellevue Place
MT Haryono, Tebet
South Jakarta
Gapura Prima
240 Under-construction
The Aspen Peak at Admiralty (Tower D)
Jl. Fatmawati
South Jakarta
PT. Harmas Jalasveva
322 Under-construction
Casa Grande Residence 2 (Tower Angelo)
Jl. Casablanca
South Jakarta
Pakuwon Group
350 Under-construction
Casa Grande Residence 2 (Tower Bella)
Jl. Casablanca
South Jakarta
Pakuwon Group
350 Under-construction
Casa Grande Residence 2 (Tower Chianti)
Jl. Casablanca
South Jakarta
Pakuwon Group
350 Under-construction
Pondok Indah Residences (3 Towers)
Pondok Indah
South Jakarta
Metro Pondok Indah
880 Under-construction
Selatan 8 (Tower Prabu)
Jl. Raya Ulujami
South Jakarta
Karya Cipta Group
344
1,924 Under-construction
Under-construction
45 Antasari (2 Tower)
Antasari
South Jakarta
Cowell Development
Arzuria Apartment
Jl. Tendean
South Jakarta
Tolaram Group
210 Under-construction
Pakubuwono Spring (2 towers)
Jl. Teuku Nyak Arief No.9
South Jakarta
PT. Simprug Mahkota Indah (Agung Podomoro Group)
545
Under-construction
Branz Simatupang (2 tower)
TB. Simatupang
South Jakarta
Tokyuland
381
Under-construction continued
19 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment name
location
region
developer
#units
Status continuation
Synthesis Residence Kemang (3 towers)
Jl. Ampera Raya No.17
South Jakarta
PT. Synthesis Development
1,100 Under-construction
The Ease Brawijaya
Jl. Taman Brawijaya III Kebayoran Baru
South Jakarta
PT. Bhakti Usaha Dinamika
54 Under-planning
Gianetti Apartment
Jl. Kebon Jeruk Raya, Kemanggisan
West Jakarta
Bangun Investa Graha
500 Under-construction
Gallery West
Jl. Panjang No 5
West Jakarta
AKR
280 Under-construction
Ciputra International Puri Indah (Tower Amsterdam)
Jl. Lingkar Luar Barat
West Jakarta
Ciputra
412 Under-construction
Grand Madison Park
Tanjung Duren
West Jakarta
Agung Podomoro Group
300 Under-construction
Citra Lake Suites (Tower Rosewood)
Jl. Raya Kresek
West Jakarta
Ciputra Group
104 Under-construction
Citra Lake Suites (Tower Greenwood)
Jl. Raya Kresek
West Jakarta
Ciputra Group
126 Under-construction
Citra Lake Suites (Tower Oakwood)
Jl. Raya Kresek
West Jakarta
Ciputra Group
117 Under-construction
Citra Lake Suites (Tower Sherwood)
Jl. Raya Kresek
West Jakarta
Ciputra Group
122 Under-construction
Aerium Taman Permata Buana (2 towers)
Taman Permata Buana
West Jakarta
Sinar Mas Land and Itochu
491
Under-planning
Ciputra International Puri Indah (Tower Barcelona)
Jl. Lingkar Luar Barat
West Jakarta
Ciputra
335
Under-construction
Puri Mansion Apartment (Tower Crystal)
Jl. Lingkar Luar Barat, Puri Kembangan
West Jakarta
Agung Sedayu Group
700 Under-construction
West Vista (2 towers)
Jl. Lingkar Luar Barat No.8, Duri Kosambi
West Jakarta
PT. Harapan Global Niaga
Citra Living Apartment (Somerset Tower)
Jl. Citra 7, Kalideres
West Jakarta
Citra Mitra Graha KSO
312 Under-construction
Citra Living Apartment (Orchad Tower)
Jl. Citra 7, Kalideres
West Jakarta
Citra Mitra Graha KSO
312 Under-construction
Citra Living Apartment (Newton Tower)
Jl. Citra 7, Kalideres
West Jakarta
Citra Mitra Graha KSO
312 Under-construction
The Suite (W Hotel Tower)
Jl. Prof. Dr. Satrio
CBD
Ciputra
200 Under-planning
The Residences at The St. Regis Jakarta
Jl. H.R Rasuna Said
CBD
Rajawali Property Group
164
Arandra Residence (was Sentosa Residence)
Jl. Cempaka Putih Raya No.1
Central Jakarta
Gamaland
687 Under-construction
2,840 Under-construction
2019 Under-construction
Menara Jakarta (Tower Equinox)
Kemayoran
Central Jakarta
Agung Sedayu
396 Under-construction
Menara Jakarta (Tower Azure)
Kemayoran
Central Jakarta
Agung Sedayu
860 Under-construction
The Linq Kemayoran (2 towers)
Kemayoran
Central Jakarta
KG Global
1,020 Under-planning
Menteng 37
Jl. Menteng 37
Central Jakarta
Pikko Group & Wijaya Wisesa (JV)
The H Residence Kemayoran (Lotus)
Jl. Rajawali Selatan
Central Jakarta
PT Hutama Karya Realtindo
Jaya Ancol Seafront - Oceana Tower
Pademangan, Ancol
North Jakarta
Jaya Ancol
524 Under-construction
Orient Residence
Jl. Yos Sudarso, No 76
North Jakarta
PT Tri Raton Mega
225 Under-planning
Fatmawati City Center - Corona Park Suite Tower
Fatmawati
South Jakarta
Agung Sedayu
620 Under-planning
Royal Park at Kebayoran (Arlington Tower)
Jl. Cileduk Raya 18, Cipulir
South Jakarta
PT. Trixindo Selaras
630 Under-planning
99 Under-planning 252 Under-planning
Ratu Prabu 3 Residences
TB. Simatupang
South Jakarta
PT Ratu Prabu Tiga
Samara Suites (was The Residence Gatot Subroto)
Jl. Gatot Subroto
South Jakarta
Synthesis Development
300 Under-planning
61 Under-construction
Lavish Kemang Residence
Jl. Kemang Raya No.3, Bangka
South Jakarta
PT Kemang Karya Utama
474 Under-planning
Green Sedayu Apartment (Tower Pasadena)
Jl. Kamal Raya, Cengkareng
West Jakarta
Agung Sedayu
644
Under-planning continued
20 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment name
location
region
developer
#units
Status continuation
2020 Regatta Tokyo Tower
Jl. Pantai Mutiara
North Jakarta
Intiland
276 Under-planning
Prajawangsa City (8 towers)
Jl. Raya Bogor, Cijantung
East Jakarta
Synthesis Development
4,000 Under-planning
East 8 (2 towers)
Cibubur
East Jakarta
Karya Cipta Group
1,172 Under-planning
Fatmawati City Center(5 towers)
Fatmawati
South Jakarta
Agung Sedayu
2,080 Under-planning
Green Sedayu Apartment (Tower New York)
Jl. Kamal Raya, Cengkareng
West Jakarta
Agung Sedayu
920 Under-planning
Source: Colliers International Indonesia - Research
Demand No significant changes in the apartment market were noted in 2Q 2016. Although the market saw some improvement in launching activity, buying sentiment remained lukewarm. Sales remained quiet as investors and end-users have put their plans to buy apartments on hold in view of economic conditions. Prospective buyers continued to tread with caution and be mindful with their purchases in light of recent market conditions, particularly delays in construction progress and project cancellations, which were further worsened by the lack of regulations protecting buyer and developer rights. Overall, the average take-up rate only rose by less than 1% QoQ and YoY. A combination of creative marketing strategies (with gimmicks, etc.) and a limited number of newly introduced/newly launched projects have helped lift, or at least maintain, the overall take-up rate performance of the apartment market in Jakarta. The unrevealed fact behind the vigorous sales performance in certain projects is insider trading with buyers who could be shareholders or top executives of the company. Though small in number, such transactions helped lift overall sales performance. Another way to boost sales is to offer buy-back and cash-back guarantees, i.e. refunding the money to the buyer when the handover schedule does not meet the agreed timeline. Developers have collaborated with insurance companies to provide protection for their apartment units with the benefit of 100% cash-back after 15 claim-free years. As long as buyers don’t make a claim on their apartment insurance (also called Building Insurance) policy for 15 years, they will receive a full refund of all of the Building Insurance premiums that they have paid. In terms of area, under-construction projects in the CBD recorded the highest increase in overall take-up rate, at 2.5%, compared to 1.1% and 1% in South Jakarta and non-prime areas, respectively.
Take-up Comparison between Existing and UnderConstruction Projects Q2 2015
Q1 2016
Q2 2016
QoQ
YoY
Existing
95.80%
96.20%
96.20%
0.00%
0.40%
Under-construction
69.00%
67.00%
68.10%
1.10%
-0.90%
Average (all)
85.90%
86.20%
86.70%
0.50%
0.90%
Source: Colliers International Indonesia - Research
Take-up Rate Changes in Different Locations in Jakarta Q2 2015
Q1 2016
Q2 2016
QoQ
YoY
CBD
96.00%
94.00%
94.50%
0.50%
-1.50%
South Jakarta
88.00%
85.30%
85.90%
0.60%
-2.10%
Non-prime area
83.40%
85.40%
85.90%
0.50%
2.50%
Source: Colliers International Indonesia - Research
Thus far, foreign ownership regulations have not changed drastically because they still have to comply with the Agrarian Law, which limits the scope of ownership. Foreigners can only buy property under a Hak Pakai (Right to Use) title, and in order to do that they have to hold a legal stay permit in Indonesia. Recently, after the issuance of revised Government Regulation number 103/2015, the government (Head of the National Land Agency) introduced the implementation of the regulation No. 13 of 2016 on Procedures for Granting, Relinquishing and Transferring Ownership of Residential Property for Foreign Citizens Domiciled in Indonesia. This new regulation makes it clearer that foreign citizens are only allowed to own high-end residential properties (either apartment or landed house) with various minimum thresholds based on the property type and location. Previously, Indonesian authorities announced in 2Q 2015 that foreigners would be allowed to purchase apartments or houses which cost at least IDR10 billion/unit (roughly US$740,000) under a right-to-use title. Nonetheless, even with these government efforts to ease regulations on foreign ownership, the main challenge facing apartment sales remains: they have to be built on Right to Use land that is unconventional in the local market.
21 Quarterly Report | Q2 2016 | Jakarta | Colliers International
The Price Threshold for Foreign-Owned Houses and Apartments in Indonesia
60,000,000
selling price (in idr)
3 billion
1 billion
Yogyakarta
3 billion
1 billion
East Java
5 billion
1.5 billion
Bali
3 billion
2 billion
NTB
2 billion
1 billion
North Sumatera
2 billion
1 billion
East Kalimantan
2 billion
1 billion
South Sumatera
2 billion
1 billion
Other location
1 billion
750 million
30,000,000 20,000,000 10,000,000 0
Source: Ministerial Regulation No.13 of 2016
Another appealing effort to bolster the current sluggish market has come through relaxation of LTV regulations. The Central Bank (Bank Indonesia) has stepped in to support the domestic economy and property market and, in particular, is likely to boost apartment sales going forward. Bank Indonesia is planning to review loan-to-value (LTV) regulations to boost the property market in 3Q 2016. Under the easing policy, the Central Bank will reduce the amount of down payments in a bid to spur credit growth and boost economic growth. Another possible measure would let homeowners take out loans to purchase a second home “off the plan”, or one that is under pre-construction. This relaxation would provide a tailwind to the property sector, particularly the apartment market, if it is fully materialised. Nevertheless, Bank Indonesia has repeatedly emphasised that it will continue to closely monitor the market and enforce policies to prevent the property market from overheating, which could lead to a bubble. It will also maintain a prudent policy to keep nonperforming loans below 5% of total loans.
Asking Price Overall, the prices of apartments in Jakarta have been relatively flat, as most projects have maintained prices in order to attract buyers in this softening market situation. Newly launched or introduced projects are offered at a lower price compared to the average market price, which may hamper further price growth. To a greater extent, developers are quite concerned over the weakened purchasing power of general consumers, which is reflected in the latest data from the Statistics Bureau Indonesia, where GDP only grew 4.92% in the first quarter of 2016, slower than the estimate of slightly above 5%. Therefore, in order to cope with such a situation, developers have mainly played the role of a bank by providing installment schemes as their default payment method. Moreover, in some cases, developers have offered additional discounts, ranging from 3% to 5%, depending on the installment period, meaning that longer installments receive a smaller discount.
CBD
South Jakarta
Q1 2016
Central Java
40,000,000
Q3 2015
1 billion
Q1 2015
1 billion
Q3 2014
5 billion 5 billion
Q1 2014
Banten West Java
50,000,000
Q3 2013
5 billion
Q1 2013
10 billion
Q3 2012
Jakarta
apartment (>)
Q1 2012
House (>)
IDR/sq m
location
Quarterly Asking Prices of Apartments in Three Regions
Non-Prime Area
Source: Colliers International Indonesia - Research
As of Q2 2016, the average asking price of apartments in Jakarta was recorded at IDR31 million/sq m (excluding VAT), a modest increase of 0.5% QoQ and 9% YoY. In South Jakarta, apartment prices rose by 1.1% QoQ and 11.3% YoY, the highest rate compared to the CBD and other non-prime areas. South Jakarta remains a desirable location to live in, as indicated by the sales improvement during the reviewed quarter. In addition, some developers raised selling prices because their projects are approaching handover. The CBD still has the highest apartment prices, at IDR48.3 million/sq m, an increase of 0.9% compared to the previous quarter, while non-prime areas posted the lowest QoQ growth, 0.7%, to IDR23.3 million/sq m, mainly because the newly introduced projects in East Jakarta are offered at a lower price than the market average.
Apartment Price Changes in Jakarta Based on Area (in IDR/sq m) Q2 2015
Q1 2016
Q2 2016
QoQ
YoY
44,135,684
47,816,125
48,246,435
0.90%
9.30%
South Jakarta
32,713,013
36,028,156
36,421,523
1.10%
11.30%
Non-prime Area
21,285,155
23,147,612
23,300,386
0.70%
9.50%
28,442,570
30,840,637
31,008,439
0.50%
9.00%
CBD
Average
Source: Colliers International Indonesia - Research
22 Quarterly Report | Q2 2016 | Jakarta | Colliers International
APARTMENT FOR LEASE Supply No new supply was launched in Q2 2016, and the total stock of Jakarta’s apartments for lease remained at 8,780 units. Nonetheless, the market is expecting to receive at least 890 new serviced apartment units in the next four years. The new projects will be largely operated by global serviced apartment operators such as Oakwood Worldwide, Frasers Hospitality and The Ascott Limited. The only local apartment operator is Lavish Kemang Residence Serviced Apartment.
As there was no change in the number of existing apartments for lease, the distribution composition remains the same as well, with the majority of projects concentrated in the CBD and South Jakarta, representing around 44% and 35%, respectively. By grade, most apartments for lease in Jakarta are classified as middle-upper grade projects, followed by middle-lower grade, with 73% and 14%, respectively. The middle-upper class segment, which is mostly dominated by serviced apartments, typically features projects with better building maintenance and high rental rates, while middle-lower class buildings mostly consist of old non-serviced apartment projects located in nonprime areas
List of Future Supply Serviced Apartment in Jakarta Name of Development
Beginning Year of Operation
Location
Area
#unit
Fraser Suites at Ciputra World 2
2017 Jl. Prof. Dr. Satrio
CBD
200
Oakwood Premiere Jakarta at District 8 Senopati
2017
Senopati
South Jakarta
378
Ascott Menteng Jakarta
2019
Menteng
Central Jakarta
150
Fraser Residence Serenia Hills
2019
Cilandak, Lebak Bulus
South Jakarta
Fraser Suites Kebon Melati
2019
Kebon Melati, Tanah Abang
South Jakarta
Serviced Apartment at Lavish Kemang Residence
2020 Jl. Kemang Raya No.78 A
South Jakarta
TBA TBA 162
Source: Colliers International Indonesia - Research
Distribution of Existing Apartments for Lease (by Number of Units) West North Jakarta 6% Jakarta 5%
South Jakarta 35%
CBD 44%
Occupancy The falling number of mid- to junior-level expatriates relocating to Jakarta has created a challenge for apartments on the lease market. On the other hand, in order to keep demand steady, some serviced apartments have collaborated with Online Travel Agents (OTA) such as Agoda and Booking.com to offset the number of expats leaving the city. During the reviewed period, the occupancy of serviced apartments increased modestly by 0.2%, while that of non-serviced apartments declined by 0.8%, to 62.8% and 76.2%, respectively.
Central Jakarta 10% Source: Colliers International Indonesia - Research
23 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Average Occupancy Rate of Apartment for Lease in Jakarta 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
Serviced Apartment
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
4Q 2014
3Q 2014
Q2 2014
Q1 2014
0%
Non-Serviced Apartment
The majority of apartment for lease projects maintained rent tariffs at the same level this quarter. In general, new rental rates introduced early in the year are valid until the end of the year. Rental rates quoted in rupiah remained flat, while changes only took place in apartments which still quote rent in US dollars due to the strengthening Indonesian rupiah against the US dollar during the period. As a result, the average rental rate of apartments for lease in the CBD stayed at IDR374,061/sq m/month, while rental tariffs for apartments for lease in South Jakarta, including non-prime areas, decreased by 1.4% from the previous period to IDR224,178/sq m/month. All in all, the average asking rental rate will be relatively stable throughout the year, although the rental rate may fluctuate due to rupiah depreciation/appreciation, since some operators still use the floating rate conversion.
Average Rental Rate (in IDR/sq m) of Apartment for Lease Based on Region
Source: Colliers International Indonesia - Research
The traditionally slow month of Ramadan (this June – July) saw a weakened number of inquiries on apartments for lease, mainly because expatriates are the main market and their numbers have fallen. The underlying issues behind this are longer visa processing times and tightened housing allowances for multinational companies. A number of multinational companies have decided to rationalise their expenses by streamlining costs for housing allowances. In addition, the expiration of existing work contracts for a number of expatriates continued to bring the average occupancy rate down by 0.45% compared to the previous quarter, settling at 71.5%. This quarter, some newly completed serviced apartments in the CBD have reportedly achieved relatively good occupancy performance as a result of various promotional efforts to attract tenants. Moreover, some non-serviced apartments have had new inquiries from ecommerce businesses coming to Jakarta. Meanwhile, since most of the apartments for lease in South Jakarta and nonprime areas are old projects, tenants have been presented with alternative options, like renting in newly operating strata-title apartments belonging to the individual owner. In this gloomy rental market, most individual unit owners have come up with more flexible payment terms at more competitive rental rates compared to both serviced and non-serviced apartments.
Occupancy Rates of Apartment for Lease Q2 2015
Q1 2016
Q2 2016
QoQ
YoY
79.40%
69.10%
76.10%
6.90%
-3.40%
South Jakarta
76.40%
72.00%
70.40%
-1.60%
-6.10%
Non-Prime area
70.00%
69.60%
68.00%
-1.50%
-2.00%
CBD
Average Rental Rate
Q1 2016
Q2 2016
QoQ
CBD
374,061
374,061
0.00%
South Jakarta (including non-prime areas)
227,296
224,178
-1.40%
Source: Colliers International Indonesia - Research
Concluding Thought The outlook for Indonesia’s economy is expected to remain lacklustre in 2016, with growth forecast to range from 5% to 5.2%, down from previous estimates of 5.2% to 5.6%. On the other hand, Standard & Poor’s (S&P) rating agency affirmed Indonesia’s sovereign credit rating of BB+ with a positive outlook, leaving the economy one notch below investment grade. This means that an upgrade is still likely in the near future. In our opinion, the apartment market will see gradual improvement in the upcoming quarters since the economic fundamentals show signs of stabilisation, inflation remains low and we are anticipating the tax amnesty law coming into effect. In addition, Bank Indonesia has launched easing moves, including cutting the BI rate by 25 bps to 6.5%, as well as macro prudential policies that will relax the loan-to-value ratio for landed houses and apartments and are expected to boost credit demand and spur economic activity. Nevertheless, the expectation of huge supply going forward is the other main challenge for the apartment market in general. At the very least, the positive outlooks discussed above will not materialise in the short-term. The apartment market will need some time to stabilise and find equilibrium before taking off in the next one-two years.
Source: Colliers International Indonesia - Research
24 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Accelerating success.
Expatriate Housing Sector Forecast at a glance Demand
Besides power related industries, we anticipate one of the driving factors creating demand for residential property will be the infrastructure sector.
Rent
Landlords are being forced to be more realistic about rental rates, increasing their marketing efforts and being open to alternative rental models. In certain cases landlords are willing to negotiate and adjust the rental rate down by as much as 35% in order to lease their property rather than lose income by leaving the units vacant.
Market Overview The expatriate housing market started to show signs of recovery during the first semester of 2016. A number of inquiries came mostly from repeat corporate clients who sign one-year contract extension (as opposed to the traditional two-year contracts). Many expat employing companies are currently only willing to commit to a maximum one-year contract and very few of them are willing to accept two years rent in advance even if the working permit of the employee has been issued for a two year period. Furthermore, many landlords are willing to negotiate less than one year lease extension due to the realization of the current market condition and the drastic drop in inquiries for expat housing. In some cases occupiers are taking advantage of the situation and may relocate to other residential projects that offer either lower rents or at least equal rents but with better amenities. Typically multinational companies prefer their expat employees to reside in housing compounds rather than in stand alone houses for security reason. Residing within a compound or in a serviced or regular apartment building allows these companies to take advantage of security measures that are already in place. This is often the easier security solution for both the employee and employer. Well-developed housing compounds such as Executive Paradise, Atmaya Residence and Astoria Residence continue to attract a sound number of tenants and continue to maintain their high occupancy despite the current market condition. Executive Paradise is one of the largest housing complexes which is developed on 20 hectares of land in Cilandak, South Jakarta. This complex provides a relaxing and peaceful sanctuary seemingly set away from traffic noise and air pollution making it one of the most popular choices within the expat community. , Situated right next to Executive Paradise, Astoria Residence complex offers luxury houses featuring 4-5-bedrooms and each unit is equipped with a swimming pool and ample living space. Developed specifically to service the expat community, Astoria Residence tenants can also take advantage of the club house and mini market located in the adjacent Executive Paradise compound.
The rising supply of newly completed upscale individuallyowned apartments together with the reduction in the number of expatriates entering the country have been a major factor in pushing landlords to offer more favorable rental rates and more attractive contractual terms for tenants. Consequently, landlords are being forced to be realistic about the rental rates, increasing their marketing efforts and being open to alternative rental models. In certain cases the landlords are willing to negotiate and adjust the rental rate down by as much as 35% in order to let their property rather than losing income by leaving the units vacant. The number of expatriates arriving (those being issued working permits) has yet to recover. According to data from Ministry of Manpower, the number of expatriates with a working permit during January-February 2016 was still 41% lower compared to the same period in 2015 (8,980 people).
Annual Number of Expatriates with Working Permit in Indonesia
#expatriates
2011
2012
2013
2014
77,307
72,427
68,957
68,762
2015 69,025
Jan – Feb 2016 5,339
Source: Ministry of Manpower of the Republic of Indonesia
The second quarter of each year (April – June) is typically the peak season for obtaining new inquiries from expatriates who are assigned to work in Indonesia. During this period orientation activities intensify prior to their relocation process in order to understand and appraise the geographical situation while at the same time familiarizing them with the local culture. During their familiarization trips, normally they will view houses or apartments, medical facilities, supermarkets, shopping malls, to get an idea of where they might want to live in Jakarta. For expatriates relocating with children, the proximity to the preferred international school will typically take first priority in deciding home location. Normally the relocation details need to be decided prior to the start of the school academic year in August or September.
The plummeting global oil prices have pushed corporations in this sector to restructure their operational cost, including budgets for their expatriates’ accommodation. This sector has experienced a downward trend over the last few years and thus businesses have been forced to streamline their expenses. Budgets have been reduced therefore pressuring multinationals to reduce the number of expatriate workers overseas or be more provident with the individuals that are currently in country. One of the ways this is being implemented is by searching for a more affordable accommodation. Currently finding vacant houses and apartments for lease is not as challenging as in previous years. Based on our data, during 2012 – 2013, the vacancy rate of typical expatriate homes was below 10 percent, while on the contrary, since 2014 onward the vacancy rate is expected to hit a double digits as we have witnessed in the first quarter of 2016. Amid the slowing global oil and gas business, other sectors seem to bring exuberance to the expatriate housing market going forward. In line with the government’s massive plan to provide adequate energy supply, some major multinational companies have already started to play a part in this sector. Besides power related industries, that are anticipated to become one of the driving factors for residential needs, the infrastructure sector seems to also become a trigger to create demand. During the current sluggish market where the amount of housing inquiries has noticeably diminished, landlords are generally accommodative to the clients’ needs particularly amid the glut of residential supply. This situation has forced landlords to be more flexible in deciding the rental tariff, or alternatively have an empty cash-burning dwelling. During the first semester of 2016 we have experienced discounts ranging between USD50 to USD1,000/unit/month for standard expat housing compared to the previous semester. Based on our experience, the biggest discount was granted for relatively small stand alone houses with the size of 400 – 500 sq m which previously commanded a USD5,000/unit/month price tag. This is unquestionably due to the number of vacant units of this type of housing currently available on the market. More luxurious homes are not as subject to this range of discount because of the reduced number of units available.
Housing Rental Rates in Several Expatriate Areas expatriate housing by area
size (sq m)
Offering Rental Rate per Unit (usD/unit/month) Minimum
maximum
Menteng 4 - 5 Bedrooms House
500 - 1,200
4,000
12,000
500 - 900
4,000
8,000
450 - 1,000
3,500
Kuningan 4 - 5 Bedrooms House Pondok Indah 4 - 5 Bedrooms House
10,000 continued
26 Quarterly Report | Q2 2016 | Jakarta | Colliers International
expatriate housing by area
size (sq m)
rental range (usD/unit/month) Minimum
maximum continuation
Kebayoran Baru 4 - 5 Bedrooms House
600 - 1,500
3,500
10,500
250 - 700
3,000
4,000
400 - 1,500
4,050
10,800
220
3,150
400 - 700
3,000
4,500
3 - 4 Bedrooms Townhouse/complex Permata Hijau 4 - 5 Bedrooms House 3 - 4 Bedrooms Townhouse/complex Kemang 4 Bedrooms Townhouse/complex 3 Bedrooms House
400 – 750
2,500
4,000
550 - 1,000
4,000
5,500
4 Bedrooms Townhouse/complex
300 - 700
3,000
6,000
3 Bedrooms Apartment + Study
300 - 600
2,500
3,500
4 - 5 Bedrooms House
450 - 750
3,500
5,500
3 Bedrooms Townhouse/complex
200 - 300
2,500
3,500
4 Bedrooms Townhouse/complex
400 - 700
3,000
4,500
3 Bedrooms House
300 - 500
2,500
3,000
4 - 5 Bedrooms House
400 - 800
3,000
4,500
3 Bedrooms Townhouse/complex
400 - 600
3,500
4,500
4 Bedrooms House
500 - 900
3,500
5,500
4 - 5 Bedrooms House Cilandak
Cipete
Pejaten
Source: Colliers International Indonesia - Research and Residential Tenant Representation
Apartment for Expatriate Despite not having as many units available, the management of some selected expatriate apartment projects introduced an increase in the rental rate by 5% over the reviewed period. The apartment market which aims at shorter termed expat tenants benefits from the downsizing in the contract tenure from typically two to three years employment contract to a shorter-term of less than one year. Serviced apartment accommodation is more flexible in the tenure terms compared to landed houses and therefore is becoming increasingly popular among expatriates.
A typical two-bedroom non-serviced apartment (including strata-title apartment which was rented to the expatriate) is offered from a minimum of IDR18 million to a maximum of IDR56 million/unit per month, while a three-bedroom is offered ranging from IDR29 million to IDR78 million/unit per month. The most expensive non-serviced apartment is located in Kebayoran Baru area, e.g. Dharmawangsa, and is offered from IDR72 million to IDR130 million/unit per month for 4 to 5-bedroom apartments (penthouse). A two-bedroom serviced apartment is offered from a minimum IDR45.5 million to a maximum IDR67.5 million/unit per month, while the three-bedroom is offered ranging from IDR42 million to IDR94.5 million/unit per month. Further, serviced apartment units of more than 3-bedroom are offered ranging from IDR73.5 million to IDR176 million/unit per month.
27 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Apartment Rental Rates in Several Expatriate Areas apartment by area
rental rate (in usD/unit/month)
size (sq m)
non-serviced apartment
serviced apartment
Sudirman 2 Bedrooms Apartment
106 - 145
32 – 52
46 – 67
3 Bedrooms Apartment
158 - 320
45.5 - 78
68 – 94.5
2 Bedrooms Apartment
90 - 142
35 – 51
54 – 56
3 Bedrooms Apartment
124 - 213
39 – 65
70
4 Bedrooms Apartment
319
Menteng
176
Kuningan 2 Bedrooms Apartment
120 - 145
20 – 32.5
45.5 – 67.5
3 Bedrooms Apartment
157 - 166
32.5 – 39
49 – 52
4 Bedrooms Apartment
440
45.5
Pondok Indah 2 + 1 Bedrooms Apartment
117 - 190
42 – 48
45.5 - 55
3 Bedrooms Apartment
190 - 455
45.5 – 68
52 – 70
4 - 5 Bedrooms Apartment
285 - 455
66 – 71
73.5 – 83
2 Bedrooms Apartment
140 - 203
42 – 56
3 Bedrooms Apartment
243 - 302
58.5 – 78
4 - 5 Bedrooms Apartment
330 - 500
72 - 130
105 - 115
40 – 41
165 - 300
35 – 52
165 - 303
32.5 – 58.5
3 - 4 Bedrooms Apartment
164
29
3 Bedrooms Apartment + Study
300
58
220 - 295
52 – 78
102 - 191
18 – 29
Kebayoran Baru
Permata Hijau, Simpruk 2 Bedrooms Apartment 3 - 4 Bedrooms Apartment Kemang 3 Bedrooms Apartment Cilandak
Cipete 3 - 4 Bedrooms Apartment Pejaten 2 - 3 Bedrooms Apartment * exclude breakfast Source: Colliers International Indonesia - Research and Residential Tenant Representation
28 Quarterly Report | Q2 2016 | Jakarta | Colliers International
42 - 46
Occupancy In general, middle-upper to upper-class apartments experienced a 3% drop in occupancy compared to the last semester of 2015, hitting 79%. Though small, this decrease in occupancy is inevitable, particularly due to the slowdown in the number of expanding companies that generate demand for this segment. The preferred areas remain the CBD (Rasuna Said, Satrio and Sudirman) and South Jakarta, including Oakwood, The Ascott, Golf Pondok Indah Residence and Shangri-La Residence.
Average Occupancy Rate of Selected Apartments Preferred By Expatriates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% A
B
C
D
E
Average
Source: Colliers International Indonesia - Research Notes:
A:
Dharmawangsa, The Capital Residence, SCBD Suites, Pakubuwono Residence, Oakwood
B:
The Residence at Ritz Carlton, Plaza Senayan, The Plaza Residence, Airlangga Apartment, Senayan City
C:
Setiabudi Residence, Golf Pondok Indah, Somerset Grand Citra, The Ascott, Menteng Executive
D:
Aston Rasuna, Somerset Berlian, Puri casablanca, Casablanca
E:
Taman Rasuna, Palm Court, Puri Imperium
29 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Cumulative Supply
The cumulative retail supply in Jakarta was recorded at 4.47 million sq m while in the BoDeTaBek area, the cumulative supply was 2.39 million sq m. Three shopping centres totaling 78,000 sq m will be added to the supply in Jakarta by the end of 2016.
5,000,000 4,500,000 4,000,000 3,500,000 3,000,000
Demand
1,500,000 1,000,000 500,000
Existing Supply
Rent
The overall rental tariff is likely to increase next year particularly because of continued demand for space in upper class malls.
Annual Supply
Supply YTD
2019F
2018F
2017F
2016F
2015
0
2014
Occupancy in DKI Jakarta has been hovering for quite sometime at around 86%. With a limited amount of new supply, occupancy is expected to remain relatively unchanged by the end of 2016.
2,000,000
2010
Occupancy
2,500,000
sq m
Fashion and F&B retailers remained active in searching for retail space. We anticipate big retailers like department stores, supermarkets and cinemas will continue to expand.
2013
Supply
Jakarta
2012
Forecast at a glance
Supply
2011
Retail Sector
Future Supply
Source: Colliers International Indonesia - Research
The beginning of Bassura City Mall’s operation during the quarter marked it as the only new supply of shopping centre during the first semester of 2016 in Jakarta. The mall is located within a mixed-use development called Bassura City in East Jakarta. By contributing circa 21,000 sq m of additional retail space, the retail cumulative supply in Jakarta was recorded at 4.47 million sq m as of Q2 2016, showing a growth below 1% YoY. The cumulative supply is expected to grow gradually in Jakarta. Around 63% of the future supply in 2016–2019 are still in the planning stage as of 2Q 2016. Thus far, retail moratorium in certain commercial areas in Jakarta still exists but is likely subject to be ceased in line with the improvement in transportation infrastructure. There might be some plans of new shopping centre developments in the CBD area, but this has not yet been officially announced in the market.
Fifteen shopping centres have gradually begun operations within the last five years in Jakarta. Nine of these shopping centres are located in integrated residential developments (apartments) to benefit from the local population. Lippo Mall Puri (opened in 2014), One Belpark Mall (2015) and Bassura City Mall (2016) are the three latest operating shopping centres taking advantage of the surrounding massive residential developments.
Distribution of Retail Spaces for Sale Based on Area West Jakarta 11%
CBD 1%
East Jakarta 9%
Annual Retail Supply 250,000
Central Jakarta 43%
200,000
sq m
150,000
North Jakarta 28%
100,000
South Jakarta 8%
50,000
Source: Colliers International Indonesia - Research
Annual Supply
Supply YTD
Under Construction
2019F
2018F
2017F
2016F
2015
2014
2013
2012
2011
2010
0
In Planning
Source: Colliers International Indonesia - Research
Cumulative Supply Based on Marketing Scheme 4,000,000
Retail Supply Based on Area
3,500,000
West Jakarta
3,000,000
East Jakarta
2,500,000 2,000,000
sq m
The supply growth of retail spaces for sale (strata-title) has been relatively flat. Jakarta has seen no addition of retail spaces for sale since 2012. Retail spaces for sale were recorded at 1.5 million sq m, representing 32.2% of the total retail supply as of Q2 2016. Going forward, New Harco Glodok seems to be the only future supply of strata-title shopping centres in Jakarta. The 60,000 sq m of retail space from this retail centre is projected to add additional 4.2% strata-title supply by 2019.
North Jakarta
1,500,000
South Jakarta
1,000,000 500,000
Central Jakarta
For Lease
2019F
2018F
2017F
2016F
2015
2014
2013
2012
2011
2010
0
CBD
For Sale
0
Source: Colliers International Indonesia - Research
200,000
400,000
Existing Supply in 2016YTD
600,000
1,000,000 sq m
Future Supply in 2016F - 2019F
Source: Colliers International Indonesia - Research
31 Quarterly Report | Q2 2016 | Jakarta | Colliers International
800,000
From the chart above, except for East Jakarta, the other regions contributed more than 700,000 sq m of retail space as of Q2 2016. Going forward, East Jakarta is expected to become the most active region in contributing more retail space in the future, together with West Jakarta. Thus far, based on construction progress, only AEON Mall Jakarta Garden City is in the construction stage.
Annual Retail Supply 350,000 300,000 250,000 200,000 150,000
sq m
Previously, we recorded at least 11 existing trade centres having a net lettable area (NLA) of 50,000 sq m and more in Jakarta. Most of these trade centres are located in Central and North Jakarta, which have a long history as trading areas. Therefore, these areas provide the largest strata-title retail space of around 70% of the total retail space for sale in Jakarta as of Q2 2016.
100,000 50,000
Annual Supply
3,500,000
Under Construction
2019F
2018F
2017F
2016F
2015
2014
2013
Supply YTD
In Planning
Source: Colliers International Indonesia - Research
3,000,000
Cumulative Supply Based on Marketing Scheme
2,500,000
2,500,000
2,000,000 1,500,000
2,000,000
1,000,000 1,500,000
2019F
2018F
500,000
Future Supply
BoDeTaBek will see more future supply than Jakarta. Sixteen future shopping centres will contribute around 740,000 sq m from now up to 2019. Projected annual supply will be around 185,000 sq m in BoDeTaBek. Based on construction progress, most of these future shopping centres are in the planning stage, particularly shopping centres scheduled for completion in 2018–2019.
For Lease
2019F
2018F
2017F
2016F
2015
2010
After developing Mal Metropolitan, Grand Metropolitan and Plaza Tambun (all of these are located in Bekasi), PT Metropolitan Land, Tbk, the owner company, confirmed the beginning of the operation of Metropolitan Mall Cileungsi. This became the additional supply in BoDeTaBek (greater Jakarta) area. This shopping centre, which is geographically located in Bogor Regency, contributed 26,500 sq m of new retail space and brought the cumulative supply to 2.39 million sq m as of Q2 2016.
2014
0
Source: Colliers International Indonesia - Research
2013
Supply YTD
2017F
2016F
2015
2014
2013
2012
Annual Supply
1,000,000
2012
Existing Supply
2011
2010
0
sq m
500,000
2011
sq m
2012
2010
Cumulative Supply
2011
0
Greater Jakarta
For Sale
Source: Colliers International Indonesia - Research
Total retail space for sale was recorded at 763,228 sq m, representing 32% of the total supply in BoDeTaBek area. This composition is similar to that Jakarta. BoDeTaBek will still expect two other future strata-title centres for sale up to 2019, namely, Bekasi Trade Centre 2 (located in Bekasi) and Vivo Trade Mall (in Bogor). In greater Jakarta area, Tangerang and Bekasi continue to provide the most number of retail spaces compared to other regions. The projected cumulative supply in each of these areas will exceed one million sq m by 2019. Up to 10 of the 16 future shopping centres in greater Jakarta will be located in Tangerang and Bekasi.
32 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Retail Supply Based on Area Bekasi
Tangerang
Depok
Bogor
0
300,000
600,000
900,000
1,200,000
sq m Existing Supply in 2016YTD
Future Supply in 2016 - 2019F
Source: Colliers International Indonesia - Research
New Supply Pipeline shopping centre
developer
location
region
nla (sq m)
development Status
jakarta 2016 Pantai Indah Kapuk Mall
Agung Sedayu
Pantai Indah Kapuk
North Jakarta
30,000 Under Construction
Shopping Mall @ Pancoran
Agung Podomoro
Pancoran
South Jakarta
Neo SOHO Mall (Podomoro City)
Agung Podomoro
Slipi
West Jakarta
40,000 Under Construction
Agung Podomoro
Glodok
West Jakarta
60,000 Under Construction
AEON Mall Garden City
Aeon
Cakung
East Jakarta
71,000 Under Construction
Mall @ Green Pramuka City
Duta Paramindo Sejahtera
Pramuka
North Jakarta
30,000 In Planning
Mal Puri Indah 2
Antilope Madju Puri Indah
Puri Indah
West Jakarta
50,000 In Planning
Shopping Mall at Podomoro Park
Agung Podomoro
Buaran
East Jakarta
40,000 In Planning
Holland Village Mall
Lippo Karawaci
Cempaka Putih
Central Jakarta
40,000 In Planning
Mall at The City Center
Greenwood
Mas Mansyur
CBD
65,000
Grand Metro Cipulir
Priamanaya
Cipulir
South Jakarta
30,000 In Planning
Pondok Indah Mall 3
Metropolitan Kentjana
Pondok Indah
South Jakarta
60,000 In Planning
8,000
Under Construction
2017 New Harco Plaza 2018
2019 In Planning
continued
33 Quarterly Report | Q2 2016 | Jakarta | Colliers International
shopping centre
developer
location
region
nla (sq m)
development Status continuation
BoDeTaBek 2016 Bekasi Trade Center 2
Gapura Prima
Bulak Kapal
Bekasi
56,000
Under Construction
Q Big
Sinarmas Land
BSD City
Tangerang
69,000
Under Construction
Adhi Persada Realty
Bekasi City
Bekasi
24,000 Under Construction
Plaza Indonesia Jababeka
Plaza Indonesia & Graha Buana Cikarang
Jababeka
Bekasi
55,685
AEON Mall Deltamas
Aeon
Deltamas
Bekasi
90,000 In Planning
AEON Mall Sentul
Aeon
Sentul
Bogor
15,000
In planning
Living World Jababeka
Kawan Lama
Jababeka
Bekasi
18,000
In Planning
Vivo Shopping Mall
Megapolitan
Cibinong
Bogor
20,000 Under Construction
Vivo Trademall
Megapolitan
Cibinong
Bogor
13,000
2017 Grand Dhika City Mall 2018 Under Construction
In Planning
2019 AEON Mall Bogor
Aeon
In Planning
Embarcadero
Lippo Karawaci
Bintaro
Tangerang
30,000 In Planning
Hollywood Central
Graha Buana Cikarang
Cikarang
Bekasi
25,000 In Planning
Kota Harapan Indah
Hasana Damai Putera
Medan Satria
Bekasi
Lippo Grand Mall
Lippo Karawaci
Karawaci
Tangerang
Mall at Pesona Square
Menara Depok Asri
Juanda
Depok
30,000 In Planning
Mall at Green Lake
Cempaka Group
Cimanggis
Depok
20,000 In Planning
51,000
In planning
120,000 In Planning
Source: Colliers International Indonesia - Research
Occupancy Jakarta Global Retail Development Index 2016 2016 Rank
Country
Market Size (25%)
Country Risk (25%)
Market Saturation (25%)
Time Pressure (25%)
GRDI Score
Population
GDP per capita, PPP
National Retail Sales ($ billion)
1
China
100.0
61.2
36.2
92.5
72.5
1,372
14,190
3,046
2
India
53.7
54.3
75.8
100.0
71.0
1,314
6,209
1,009
3
Malaysia
81.2
83.4
23.5
50.4
59.6
31
26,141
93
4
Kazakhstan
56.4
37.3
61.9
70.2
56.5
18
24,346
48
5
Indonesia
64.3
38.9
50.2
68.9
55.6
256
11,112
324
6
Turkey
85.9
46.4
31.9
53.1
54.3
78
20,277
241
7
United Arab Emirates
95.2
100.0
1.3
18.0
53.6
10
66,997
69
8
Saudi Arabia
91.2
64.9
21.3
31.5
52.2
32
53,565
109
9
Peru
47.3
52.8
50.4
57.2
51.9
31
12,077
70
10
Azerbaijan
33.9
30.8
80.9
59.3
51.2
10
18,512
17
Source: AT Kearney
34 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Despite being recorded among the top five rankings in the Global Retail Development Index (GRDI) report 2016, the retail market in Jakarta has yet to show brisk performance. Occupancy has been hovering for quite some time and was recorded at 86% as of Q2 2016. Two newly operating shopping centres with underperforming occupancy for the previous year also caused overall occupancy to slightly decrease YTD. Nonetheless, Indonesia’s huge population is still appealing to foreign retailers, as reflected in the burgeoning foreign retail investments in Indonesia, particularly in Jakarta. Dubai-based Lulu opened its first hypermarket in Cakung, East Jakarta. Meanwhile, Courts (Singapore), Lotte (South Korea), Jysk (Denmark), Uniqlo (Japan), IKEA and H&M (Sweden) have big plans to expand business in Indonesia, particularly in Jakarta.
Occupancy Rates 100% 90% 80% 70%
Occupancy Outside the CBD Based on Area area
Q2 2015
Q4 2016
Q2 2016
South Jakarta*
91.10%
88.50%
88.60%
Central Jakarta*
73.10%
72.60%
72.60%
North Jakarta
84.50%
83.90%
84.90%
East Jakarta
87.40%
88.10%
82.20%
West Jakarta
81.50%
81.10%
80.70%
*excluding areas considered as the CBD Source: Colliers International Indonesia - Research
South and East Jakarta maintained the occupancy rates at 88%. However, the overall occupancy rates in East Jakarta plunged quite significantly to 82.2% following the beginning of Bassura City Mall’s operation. Areas outside the CBD will see the completion of three future shopping centres in the remainder of 2016. The start of the operation of the future Pantai Indah Kapuk Mall and Neo Soho Mall at Podomoro City in the first year may impact the projected overall occupancy.
YoY Comparison: Number of Vacant Spaces Based on Area
60% 50%
120,000
40% 30%
100,000
20% 10%
80,000
2016YTD
2015
2014
2013
Outside the CBD
Jakarta
60,000
sq m
CBD
2012
2011
2010
0%
20,000
Source: Colliers International Indonesia - Research
The CBD remains an attractive location for branded local and foreign businesses for expansion. This has caused a wide gap in the occupancy rates of the CBD and areas outside the CBD since 2014. Nevertheless, amid limited retail space in the CBD, the occupancy only grew moderately during the first semester of 2016 and was registered at 92%. Meanwhile, average occupancy outside the CBD has been recorded at below 85% since 2014. After hovering at 84% for the last two quarters, the average occupancy declined mildly to 83.8% as of Q2 2016. However, we still noted a number of leasing activities at some shopping centres QoQ, particularly in North Jakarta, as can be seen in the following table.
40,000
0 CBD
Central Jakarta
South Jakarta
Q2 2015
North Jakarta
East Jakarta
West Jakarta
Q2 2016
Source: Colliers International Indonesia - Research
Occupancy Based on Mall Grade Mall grade
Q2 2015
Q4 2016
Q2 2016
Upper Class
91.6%
90.8%
90.9%
Middle Class
88.5%
86.3%
85.7%
Middle Lower Class
77.5%
77.7%
77.3%
35 Quarterly Report | Q2 2016 | Jakarta | Colliers International
YoY Comparison: Number of Vacant Spaces Based on Mall Grade 180,000 150,000 120,000 90,000
sq m
Based on mall grade, the occupancy for upper-class shopping centres was recorded at 90.9% and has been relatively stable QoQ. In the middle lower class, occupancy slightly fluctuated within the last year. At least four shopping centres of this class (located in Slipi, Blok M, Koja and Cengkareng) hold a large vacant space, which brought the average occupancy to relatively decline YoY. One of these four shopping centres is undergoing renovation and upgrading of the tenancy mix. The QoQ occupancy rate at middle-class shopping centres was somewhat corrected mainly because of the increasing vacant spaces at several shopping centres located in Cilandak, Blok M, Rasuna Said, Kelapa Gading and Mas Mansyur. More vacant spaces during this period were contributed by newly operating shopping centres in 2015–2016. Apart from that, some retailers are now doing fit-outs for their stores, which are seemingly ready to be occupied around the end of 2016.
60,000 30,000 0 Upper Classes
Middle Classes
Q2 2015
Middle-Lower Classes
Q2 2016
Source: Colliers International Indonesia - Research
New Tenants at Some Shopping Centres in Jakarta Shopping Centre
area
new tenant
Mall Taman Anggrek
West Jakarta
WB Jewelry
Mall Puri Indah
West Jakarta
Celebrity Fitness
Central Park Mall
West Jakarta
Fossil, Tag Heuer, Sephora, Dharma Kitchen, POLO, Kitchen Art, Chung Gi Wa Korean BBQ, Puma, Planet Sports, Jade Wong
Pluit Junction
North Jakarta
Hero Supermarket
Citywalk Sudirman
Central Jakarta
Takigawa, Shabu Tei, Gandy Steak
Source: Colliers International Indonesia - Research
Committed Tenants at New and Future Shopping Centres in Jakarta Shopping Centre
area
tenant name
Shopping Mall Pancoran
South Jakarta
Excelso, Nanny’s Pavilion, Starbucks, Coffee Bean, Baskin Robins, Chatime, Wendys, Solaria
Neo Soho Mall
West Jakarta
Central Dept Store, Kid Station, Electronic Solution, Pedro, The Body Shop, Clarks, Staccato, Polo Ralph Lauren, Samsonite, Wrangler, Wood, Cotton On, Mango, Nine West, Charles & Keith, Armani Jeans, Furla, Ta Wan, Pizza Hut, Pepper Lunch
Pantai Indah Kapuk Mall
North Jakarta
Uniqlo, The Food Hall, XXI, Ace Hardware, Gold’s Gym, Informa, H&M, Optik Melawai, Sports Station, Giordano, Levi’s Store, Timberland, Pizza Hut, Starbucks, Excelso
Bassura City Mall
East Jakarta
XXI, Lion Superindo, Optik Melawai, Sports Station, The Body Shop, Starbucks, Imperial Kitchen
Source: Colliers International Indonesia - Research
36 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Greater Jakarta Except for Bogor, other areas in greater Jakarta recorded relatively better occupancy rates albeit very moderately. Eight shopping centres including Detos (Depok), Ekalokasari (Bogor), Summarecon Mall Bekasi, Grand Metropolitan (Bekasi), Grand Galaxy (Bekasi), Bintaro Xchange, Cinere Bellevue and AEON Mall reported that they have secured additional tenants occupying above 1,000 sq m YoY. Nevertheless, overall occupancy only slightly increased to 83.2% as of Q2 2016. In spite of the fact that newly operating shopping centres have secured precommitted tenants, the physical occupancy is yet to be recorded because the tenants are mainly in the preparation stage to open stores. BoDeTaBek area is anticipating a large new retail space over the next four years. Given this, we expect an increase in vacant space as the amount of supply will be larger than the historical number of annual demand.
Occupancy Based on Area area
Q2 2015
Q4 2016
Q2 2016
Bogor
82.0%
82.0%
77.6%
Depok
85.6%
86.2%
86.9%
Tangerang
78.3%
81.8%
82.0%
Bekasi
83.6%
85.7%
85.8%
Source: Colliers International Indonesia - Research
YoY Comparison: Number of Vacant Spaces in Several Regions 150,000 125,000
Occupancy Rate Based on Area
100,000
100%
75,000
sq m
90% 80%
50,000
70% 25,000
60% 50%
0
40%
Bogor
30%
Depok Q2 2015
20%
Tangerang
Bekasi
Q2 2016
Source: Colliers International Indonesia - Research
10% 0% 2010 Bogor
2011
2012
Depok
2013 Tangerang
2014
2015
Bekasi
2016YTD All Area
Source: Colliers International Indonesia - Research
The limited number of vacant spaces in Jakarta, particularly in certain shopping destinations, has shifted the expansion target of both local and foreign retailers in certain areas in BoDeTaBek. Demand for retail space from branded retailers is commonly large and entail high-specification premises.
Committed Tenants at New and Future Shopping Centres in Greater Jakarta Shopping Centre Name
area
new tenant
Metropolitan Mall Cileungsi
Bogor
Matahari Department Store, Gramedia, Cinema XXI, Superindo, Eat and Eat, Electronic City, JYSK
Vivo Lifestyle
Bogor
Centro, Fun World
Vivo Trade Mall
Bogor
Lotte Mart, CGV
Q Big
Tangerang
Mitra 10, Lulu Hypermarket, Informa, Ace Hardware, Toys Kingdom
Bekasi Trade Centre 2
Bekasi
Hypermart
Source: Colliers International Indonesia - Research
37 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Rental Rates
YoY: Average Asking Rents Outside the CBD Based on Area
Jakarta
IDR600,000
Average Asking Rents in Jakarta
IDR500,000
IDR900,000
IDR400,000
IDR750,000
IDR300,000
IDR600,000 IDR450,000
IDR200,000
IDR300,000
IDR100,000
IDR150,000
IDR0 Central Jakarta
CBD
Outside CBD
2016YTD
2015
2014
2013
2012
2011
2010
IDR0
Jakarta
Source: Colliers International Indonesia - Research
Average asking rents for the whole area of Jakarta was recorded at IDR566,087/sq m/month as of Q2 2016. Around 20% of the total shopping centres contributed to the increase in the average asking rent that grew 6% YoY. The most significant increase occurred in North Jakarta, with at least seven shopping centres increasing the asking rents between IDR50,000 and IDR200,000/sq m/month. In some cases, limited vacant space pushed large well-known shopping centres to adjust the asking rent tariff, particularly for main areas like the ground floor. Such adjustment has brought the average asking rent to climb significantly by around 25% in North Jakarta. In East Jakarta, the rental tariff adjustment was mainly due to the newly operating shopping centre that changed the overall figure for the region.
South Jakarta
North Jakarta
Q2 2015
East Jakarta
West Jakarta
Q2 2016
Source: Colliers International Indonesia - Research
YoY: Asking Rents Based on Mall Grade IDR900,000 IDR800,000 IDR700,000 IDR600,000 IDR500,000 IDR400,000 IDR300,000 IDR200,000 IDR100,000 IDR0 Upper Classes
As of Q2 2016, the average asking rent for retail occupation in the CBD was recorded at IDR855,965/sq m/month, while in areas outside the CBD, it was IDR476,009/sq m/month.
Q2 2015
Middle Classes Q2 2016
Source: Colliers International Indonesia - Research
Based on mall grade, middle- and middle to lower-class shopping centres showed higher growth in rental rates than upperclass shopping centres YoY. However, in terms of occupation cost, the rate for most middle-class shopping centres is basically 45% less expensive than what is quoted by most upperclass shopping centres. Currently, the range of the average asking rents for upper-class shopping centres is recorded at IDR550,000 to IDR1,200,000/sq m/month, while the middle classes were recorded at IDR300,000 to IDR600,000/sq m/ month (middle) and IDR200,000 to IDR400,000/sq m/month for middle lower.
38 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Middle-Lower Classes
Greater Jakarta
The segmentation of shopping centres in BoDeTaBek is mainly categorised as middle to middle lower class. As of Q2 2016, the asking rents were recorded in the range of IDR225,000 to IDR450,000/sq m/month (middle class) and IDR200,000 to IDR360,000/sq m/month (lower class). Only a few shopping centres are segmented as middle to upper class, with rental rates ranging from IDR300,000 to IDR550,000/sq m/month.
Average Asking Rents in BoDeTaBek IDR400,000 IDR350,000 IDR300,000
Service Charges
IDR250,000 IDR200,000 IDR150,000
Jakarta
IDR100,000
Average Service Charges in Jakarta IDR180,000
IDR50,000
Depok
Bekasi
2016YTD
2015
2014
2013
Tangerang
IDR150,000 IDR120,000
Average
IDR90,000
Source: Colliers International Indonesia - Research
IDR60,000
Average Asking Asking Rents YoY
IDR30,000
IDR400,000
2016YTD
2015
2014
2013
2010
2012
IDR0
IDR350,000
2011
Bogor
2012
2010
2011
IDR0
IDR300,000 CBD
IDR250,000
Outside the CBD
Jakarta
Source: Colliers International Indonesia - Research
IDR200,000
Average Service Charges YoY Changes
IDR150,000 IDR100,000
IDR140,000
IDR50,000
IDR120,000
IDR0
IDR100,000 Bogor
Depok
Tangerang
Bekasi IDR80,000
Q2 2015
Q2 2016 IDR60,000
Source: Colliers International Indonesia - Research
In the greater Jakarta area, average rental rates in Bekasi and Bogor showed a relatively significant increase compared to those of other regions. With the same reason, the main trigger for the increase was the inclusion of newly operating shopping centres with higher asking rent to the overall rental calculation. The asking rents increased 8.4% in Bogor YoY while in Bekasi, the increase was 18.3% YoY. Overall, with other minor changes experienced by the other regions, the average asking rent in BoDeTaBek was recorded at IDR352,119/sq m/month as of Q2 2016, growing 9.4%, YoY.
IDR40,000 IDR20,000 IDR0 Central Jakarta
South Jakarta
North Jakarta
Q4 2015 Source: Colliers International Indonesia - Research
39 Quarterly Report | Q2 2016 | Jakarta | Colliers International
East Jakarta
Q2 2016
West Jakarta
Average Service Charges IDR 100,000
IDR 80,000
IDR 60,000
IDR 40,000
The overall upper-class malls charged the operating cost to the tenants at an average of IDR152,278/ sq m/month. This is an increase of 7% YTD, the highest growth compared to other lowerclass malls. Some shopping centres introduced 15.3% increase on the average in one year’s time.
IDR 20,000
Bogor
IDR160,000
Depok
Tangerang
Bekasi
IDR140,000
Source: Colliers International Indonesia - Research
IDR120,000
YoY: Service Charge based on Area
IDR100,000
2016YTD
2015
2014
2013
2010
YTD: Service Charge based on Mall Grade
2012
IDR 0
2011
During Q2 2016, the average service charge in Jakarta moved upwards modestly by 4.5% QoQ to record IDR123,482/sq m/ month. At least 30 shopping centres made adjustments to this maintenance tariff by as much as 20% during the first semester. The CBD and South Jakarta, which are mostly populated by upper-class malls, recorded the highest increase in service charges at IDR153,902 and IDR125,794/sq m/month, respectively. However, the highest YTD growth in service charges was registered by North Jakarta, with at least seven shopping centres making adjustment for the tariff.
Average
IDR100,000
IDR80,000 IDR80,000
IDR60,000 IDR40,000
IDR60,000
IDR20,000 IDR40,000 IDR0 Upper Q4 2015
Middle
Middle-Lower
IDR20,000
Q2 2016
Source: Colliers International Indonesia - Research
IDR0
Greater Jakarta Only six shopping centres made adjustments in the average service charge, with moderate increase of 3.3% YTD to IDR88,158/ sq m/month as of Q2 2016. We recorded about three shopping centres in Depok making adjustments in the service charge tariff, thus bringing the highest increase (compared to other regions) of 9.7%. Moreover, one of these malls introduced an almost double tariff since the mall began operations in 2014.
Bogor
Depok Q4 2015
Source: Colliers International Indonesia - Research
40 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Tangerang Q2 2016
Bekasi
Industrial Estate Sector Forecast at a glance Supply
In Karawang the Gajah Tunggal Group and Agung Podomoro Group have already launched their industrial estates. They are members of a consortium of industrial developers referred to as Trans Hexa Karawang who share a common road.
Demand
This quarter, the total sales of industrial land in the greater Jakarta area added to 29.03 hectares. Total sales in H1 2016 only represented 13.9% of the total of last year’s transaction of 347.51 hectares. We anticipate a higher sale volume in H2 2016 particularly coming from the logistics sector.
Price
The price of industrial land will likely remain unchanged by the end of 2016.
Industrial Land Supply In the midst of sluggish industrial land sales, the commitment to deliver ready-to-build land still prevails, highlighted by continuing construction activity. Many landlords still believe in the long-term investment climate; however they tend to flow with the current market trends and remain quite cautious during this slowdown period. As discussed in earlier reports, Karawang will potentially become the area with the most land for expansion. The biggest land expansion will come from a consortium of companies, Trans Hexa Karawang (THK). The consortium members include group of companies such as Gajah Tunggal, Salim, Artha Graha, Agung Podomoro, etc. Currently, the total area of THK’s land is roughly 2,300 hectares. THK’s location can be accessed by exiting the Jakarta-Cikampek toll road at KM 46, followed by Karawang Barat Toll Gate 2. The main road, with a 45-metre ROW (Right of Way), connects several industrial estates in the area. Thus far, Gajah Tunggal has developed an industrial estate called GT Techpark @ Karawang. We have not seen any other companies within the consortium start construction, mainly because they are still waiting for a market response. Unlike the typical buyers of other property sectors, industrial tenants generally prefer ready-to-use land plots instead of buying “paper”, even when it is backed up by big property developers. In fact, on the demand side, there is strong indication that established companies would prefer take an established industrial estate, rather than pioneering a new, undeveloped estate. The proper sales strategy to cope with such a situation is to offer an anchor buyer with serious intentions and a strong brand in the market. This means transactions only occur for substantial amounts of land covering more than 30 hectares. If a smaller buyer approaches, the landlord will only deliver ready-to-build land within the next two years. We have also heard of a plan regarding a sizeable land acquisition for expansion in Karawang. Considering the limited amount of land they currently hold, the expansion plan seems to be feasible given the need to increase production capacity from the internal tenants. Nevertheless, the downturn in the land absorption rate over the last couple of years has forced landlords to consider taking an enormous amount of land. Land availability remains a classic issue for the Bekasi region. Two industrial estates revealed potential enquiries for land, but in a substantial amount which they cannot fulfill because of land availability. Meanwhile, one industrial estate in this region foresees this as an opportunity, as they still have abundant land stock to be developed. GIIC is now accelerating the prepara-
tion of a 450-hectare expansion in stages in anticipation of large-scale land enquiries. Meanwhile, BFIE has set plans for a 50-hectare expansion, and even now there is only limited land available for sale. Bogor is the only region with minimal expansion capacity, and thus far the number of enquiries is small, and they rarely occur. KIEC, in Serang, continues to take part in the acquisition of several small lots as part of their big plan to develop 100 hectares for future supply. Their target is to comprehensively develop the area by 2017.
Industrial Land Stock Status in Some Active and Future Industrial Estates 4,000 3,500 3,000 2,500
Hectares
2,000
1,000 500 0 Bogor
Tangerang
Karawang
Bekasi
One prominent industrial estate in Bekasi has again reported no sales for this quarter. The major issue was not sluggish demand, but limited capacity to entertain sizeable land enquiries. This has been a dilemma amidst the slowing market, but at the same time it cannot execute transactions because of a lack of supply. For some tenants or industrial investors, proximity to the capital city and well-built infrastructure will always be the main reasons for choosing an industrial location. Delta Silicon also felt that the recent market conditions have been very slow. This quarter they only performed a land transaction for roughly one hectare with a Taiwanese packaging company and a local auto parts company. Nevertheless, they expect a brisker outlook next quarter, with several transactions in the pipeline. Such conditions were also experienced by Greenland International Industrial Centre (GIIC), where they expect to see market improvement in the third quarter, with several sizeable transactions on the horizon. In total, Bekasi registered a total of 17.5 hectares in transactions, the most compared to other regions and a 50% increase QoQ.
1,500
Existing Stock
This quarter, Bekasi Fajar (BFIE) stood at a record high in terms of sales volume. Albeit moderate in number, i.e. 11.5 hectares, this represents the most sales made by BFIE in the last six consecutive quarters. The sales made by BFIE also underline the fact that the logistics sector has bolstered its position as the most active type of industry in securing industrial land. Composed of several transactions, the sales by BFIE are all from logistics-related companies, including warehouses. Amidst weakening automotive sales volumes over the last couple of years, the need to store related material has escalated, triggering growth in the logistics sector. Furthermore, requirements for logistics facilities have mounted in volume following the brisk prospects of on-line retail.
Serang
Remaining Unsold Land
Potential Land To Be Developed Source: Colliers International Indonesia - Research
Other relatively sizeable transactions during the quarter came from Jababeka Industrial Estate, which sold a total of 5 hectares of land, mainly to logistics companies and smaller companies from the electronics and consumer sectors.
Industrial Land Sales Land Absorption in Q2 2016
In Karawang, two industrial estates reported sales which accounted for a total of 4.1 hectares. Though small, this figure is higher than last quarter’s 3.5 hectares. After registering 2 hectares in land sales last quarter, KIIC reported around 3 hectares’ worth of sales from the expansion of a Japanese auto parts company. Meanwhile, a steel company based in Korea also expanded at Suryacipta, taking up 1.1 hectares. Two other industrial estates in Kota Bukit Indah did not record any transactions of industrial land for sale or lease. Since the beginning of 2014, Karawang has registered a total transaction volume of under 10 hectares every quarter.
Bekasi Fajar Modern Cikande Jababeka KIIC Millennium Suryacipta Delta Silicon Krakatau Industrial Estate Cilegon 0
2
4
6
8
10 hectares
12
Millennium sold roughly the same amount of land QoQ, totalling 1.9 hectares, made up of a 1.4-hectare land plot sale to the plastics industry and various standard warehouse buildings ranging from 600 sq m to 1,000 sq m, totalling about 5,000 sq m of land. There are several other industrial estates in Tangerang,
Source: Colliers International Indonesia - Research
42 Quarterly Report | Q2 2016 | Jakarta | Colliers International
but most are not actively selling. The latest one is Griya Idola Industrial Park, an industrial park selling industrial lots and buildings with a total area of 80 hectares. More than 70% of the total sellable land in the first stage (20 hectares) has been absorbed.
Types of Activities Industries During Q2 2016 Logistics/ Warehousing 48%
Though relatively small, Modern Cikande has consistently registered land sales totalling around 5 hectares through two transactions. Thus far, these sales make up the second-largest area, after those at BFIE. Two local companies in the pharmaceutical and chemical industries are new to this estate. Modern Cikande has recorded remarkable sales volume for the last two years, and although 2016 has seen this volume fall quite a bit, the sales performance of this estate has been above the market average. Meanwhile, KIEC only recorded sales from the expansion of a French company in the industrial gas sector. Thus far this is the only transaction it has registered this year. Going forward, KIEC is confident in the market situation and is anticipating sizeable transactions in July or August.
4% Developer 2% Others 7%
Manufacturing 1% Oil & Gas Related Chemicals Steel- Pharma1% 4% related ceutical 2% 6%
Annual Industrial Land Absorption
Automotive 19% Plastics 4%
Source: Colliers International Indonesia - Research
1,400 1,200
Land Price
1,000
Greater Jakarta Industrial Land Prices
800
USD250.00
600
USD225.00 USD200.00
400
USD175.00
200
USD/sq m
Hectares
Packaging 1% Molding
Jakarta
Bogor
Tangerang
Karawang
Bekasi
2016YTD
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
USD150.00 USD125.00 USD100.00 USD75.00 USD50.00
Serang
USD25.00 Source: Colliers International Indonesia - Research
Bogor
Bekasi
Tangerang
Source: Colliers International Indonesia - Research
Throughout the first half of the year, the logistics sector became the most active sector, similar to the trends of the last two years.
43 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Karawang
2016YTD
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Total sales of industrial land in several regions in the greater Jakarta area accounted for 29.03 hectares, slightly higher than last quarter’s 19.39 hectares. Last year’s total transactions reached 347.51 hectares, which means that total sales during the first semester of this year were only 13.9% of last year. It will be very difficult to reach last year’s transaction total in the remaining six months of this year.
USD0.00
Serang
The current general sales performance has lead to further downward pressure on prices. Two industrial estates reported the introduction of new lower prices, at an average of 8%, this quarter, in light of increasingly tough sales. Other industrial estates with mediocre sales may maintain the current asking prices, but would probably be willing to negotiate. Buyers with a sizeable purchasing plan may be in a better position to negotiate. This has been the case when potential buyers come with a requirement of more than 10 hectares; moreover, if the potential buyers are from an anchor industry, this may entice other supporting industries to buy as well. Bekasi, the home of many established industrial estates, maintains the highest prices in comparison to other regions. Asking prices are already set in rupiah and range from IDR2.4 million to IDR3.5 million, depending on the estate specifications (quality, facility, etc.) and the tenants. In Karawang, prices are mainly offered in US dollar, starting from USD170 to USD200. As of Q2 2016, land prices across greater Jakarta are primarily quoted in ID rupiah, and thus far prices in US dollar are only found in Karawang. Currently, a 10% discount on the asking price is quite common, and still within the target of the transacted price. Larger discounts may occur for large-scale land transactions.
Maintenance costs remained flat during the quarter. None of the operating industrial estates changed their costs, as necessary adjustments were made beforehand. Besides, during hard times, landlords tend to create a conducive atmosphere by not introducing new tariffs. The maintenance tariffs in industrial estates are generally maintained for a longer period. Unlike land prices, maintenance costs in all industrial estates in Bekasi are charged in US dollars. In Karawang, a few estates are already offering rupiah tariffs, while all of the industrial estates in Serang have applied the rupiah tariff for several years.
Industrial Land Prices (in USD equivalent) region
and
Land price (in USD/sq m) average
Maintenance
Costs
maintenance costs (in usd/sq m/month)
lowest
highest
Bogor
120.00
210.21
165.11
lowest 0.06
highest average 0.06
0.06
Bekasi
180.18
240.24
218.17
0.06
0.08
0.07
Tangerang
142.64
150.15
146.40
0.03
0.08
0.06
Karawang
170.00
200.00
185.00
0.05
0.10
0.06
Serang
150.15
165.17
157.66
0.03
0.05
0.04
*1USD = Rp 13,320 Source: Colliers International Indonesia - Research
Maintenance Cost
Concluding Thought
Greater Jakarta Industrial Maintenance Costs
Some industrial estates felt that they did not see signs of market recovery during this review period, and they do not expect a miracle to boost sales performance. On the other hand, we also saw a contradictory situation, whereby industrial estate landlords started to feel that the market is likely to bounce back in the near-term. All in all, without any good expectations of the market over the next semester, we believe that the market will need to breathe heavily to catch up to last year’s sales performance, since the total transactions from last year mainly consisted of a single enormous transaction which lifted the overall performance. This year will definitely need such a transaction to keep up with last year’s performance. That would be a miracle.
USD0.10 USD0.09 USD0.08 USD0.07
USD/sq m/month
USD0.06 USD0.05 USD0.04 USD0.03 USD0.02 USD0.01
Bogor
Bekasi
Tangerang
Karawang
2016YTD
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
USD0.00
Serang
Source: Colliers International Indonesia - Research
44 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Hotel Sector Forecast at a glance Supply
By end of 2016, Jakarta will see an additional 4,756 rooms comprising 1,302 rooms in 3-star hotels; 2,796 rooms in 4-star hotels; and 658 rooms in 5-star hotels.
Demand
The number of foreign visitors coming to Indonesia through Soekarno Hatta airport will have inflated from 2.4 million in 2015 to 2.7 million in 2016.
Performance
With a substantial amount of additional rooms by the end of 2016, we predict AOR may drop and thus hoteliers will be pushed to adjust room tariffs downward.
Hotel Supply Starred Hotel In Q2 2016, there were three new hotel projects that began operation in Jakarta. In the 3-star hotel category, Archipelago International added 131 rooms under Harper brand, located in Jalan MT Haryono, East Jakarta. Harper MT Haryono is the first Harper hotel in Jakarta. Additionally, another new 3-star category was from the operation of Liberty hotel, which is located in the CBD. This hotel provides 60 rooms for the public. As of Q2 2016, there were a total of 10,683 3-star hotel rooms in Jakarta. In the 4-star hotel category, Accor expanded using the Mercure brand in Jakarta. This recently opened hotel is located in Cikini, Central Jakarta. Mercure Cikini provides 207 rooms, leading the total hotel rooms in the 4-star category to reach 14,921. None of the under-construction 5-star hotels is ready for operation during the reviewed quarter. Thus, the total number of 5-star hotel rooms in Jakarta remains at 12,193. By the end of 2016, Jakarta expects to see a total of 11,835 3-star hotel rooms, 17,867 4-star hotel rooms and 12,851 5-star hotel rooms, respectively.
Top 5 Most Active Hotel Chain Operators in Jakarta (including Budget Hotel), 2015 - Present InterContinental Hotel Group 13%
Santika Hotel & Resorts 13%
Swiss-belhotel International 19%
Archipelago International 13%
Source: Colliers International Indonesia - Research
MaxOne 19%
Accor 25%
Cumulative Supply of Starred Hotel Projects in Cumulative Supply of Starred Hotel Rooms in Jakarta Jakarta 100
21,000
90
18,900
80
16,800
70
14,700
60
12,600
50
10,500 8,400
40
6,300
30
4,200
20
2,100
10
4-star
3-star
5-star
4-star
2019F
2018F
2017F
2016F
Q2 2016
Q1 2016
2015
2014
2013
2012
2010
2019F
2018F
2017F
2016F
Q2 2016
Q1 2016
2015
2014
2013
2012
2011
2010
3-star
2011
0
0
5-star
Source: Colliers International Indonesia - Research
Source: Colliers International Indonesia - Research
New Pipeline HOTEL NAME
STARRED RATING
STR CHAIN SCALE RATE
LOCATION
REGION
ROOMS
project status
projected completion TIME
Yello Hotel Hayam Wuruk
3-star
Not define yet
Hayam Wuruk
Central Jakarta
372
Under construction
Q3 2016
Harper TB Simatupang
3-star
Not define yet
TB Simatupang
South Jakarta
180
Opening preparation
Q3 2016
Whiz Prime Hayam Wuruk
3-star
Not define yet
Hayam Wuruk
Central Jakarta
100
Under construction
2016
Ibis Styles Jakarta PIK
3-star
Midscale Class
Pantai Indah Kapuk
North Jakarta
200
Under construction
2016
Ibis Styles Kemang
3-star
Midscale Class
Kemang
South Jakarta
200
Deferred
2016
Ibis Styles Tanah Abang
3-star
Midscale Class
Tanah Abang
Central Jakarta
225
Post Tender
2017
Grand Zuri Mangga Dua
3-star
Not define yet
Mangga Dua
Central Jakarta
130
Design Stage
2017
Hotel Pasar Senen
3-star
Not define yet
Pasar Senen
Central Jakarta
200
Under construction
2017
Santika TB Simatupang
3-star
Upper Upscale Class
TB Simatupang
South Jakarta
160
Permit Process
Q1 2018
Total 3-star hotel rooms
1,767
Swiss-Belhotel - Kelapa Gading
4-star
Upscale Class
Kelapa Gading
North Jakarta
316
Under construction
Q3 2016
Swiss-Belhotel Rasuna Epicentrum
4-star
Upscale Class
Rasuna Epicentrum
South Jakarta
323
Under construction
Q3 2016
Harris Hayam Wuruk
4-star
Upscale Class
Hayam Wuruk
Central Jakarta
238
Under construction
Q3 2016
Four Points by Sheraton Jakarta
4-star
Upscale Class
Thamrin
CBD
162
Opening preparation
Q3 2016
Holiday Inn Hotel & Resorts Jakarta Gajah Mada
4-star
Upper Midscale Class
Gajah Mada
Central Jakarta
420
Opening preparation
Q4 2016
Prima Hotel
4-star
Not define yet
KH Wahid Hasyim
Central Jakarta
150
Under construction
2016
Aston Titanium Cijantung
4-star
Upscale Class
Cijantung
East Jakarta
225
Opening preparation
2016
Suite Novotel Jakarta PIK
4-star
Upscale Class
Pantai Indah Kapuk
North Jakarta
220
Opening preparation
2016
Grand Whiz Poin Square
4-star
Not define yet
Lebak Bulus
South Jakarta
132
Opening preparation
2016 continued
46 Quarterly Report | Q2 2016 | Jakarta | Colliers International
STARRED RATING
HOTEL NAME
STR CHAIN SCALE RATE
LOCATION
REGION
ROOMS
project status
projected completion TIME continuation
Aston Sunter Hotel
4-star
Upscale Class
Sunter
North Jakarta
150
Under construction
2016
Ancol Courtyard Marriott Hotel
4-star
Upscale Class
Ancol
North Jakarta
310
Opening preparation
2016
aloft Kebon Jeruk
4-star
Upscale Class
Kebon Jeruk
West Jakarta
140
Under construction
Q3 2017
Novotel Cikini
4-star
Upscale Class
Cikini
Central Jakarta
286
Under construction
Q2 2017
aloft Wahid Hasyim
4-star
Upscale Class
Wahid Hasyim
Central Jakarta
170
Under construction
Q4 2017
Prama Gatot Soebroto - Kemang
4-star
Not define yet
Kemang Raya
South Jakarta
200
Concept Stage
2017
Morrissey Hotel
4-star
Not define yet
Wahid Hasyim
Central Jakarta
343
Under construction
2017
Grand Clarion Jakarta
4-star
Not define yet
Otto Iskandar Dinata
East Jakarta
272
Under construction
2017
Mercure Hotel Matraman
4-star
Upscale Class
Matraman Raya
South Jakarta
150
Deferred
2017
4-star
Upper Upscale Class
Yos Sudarso
South Jakarta
150
Deferred
2017
Mercure Kemang
4-star
Upscale Class
Kemang
South Jakarta
80
Permit Process
Q1 2018
Oyama Centre
4-star
Not define yet
Yos Sudarso
North Jakarta
160
Under construction
2018
aloft Jakarta Simatupang
4-star
Upscale Class
TB Simatupang
South Jakarta
180
Permit Process
2019
Radisson RED Jakarta
4-star
Upscale Class
Satrio
CBD
36
Planning stage
2019
Hotel Santika Sudarso
Premier
Yos
Total 4-star hotel rooms
4,663
Four Seasons
5-star
Luxury Class
Gatot Subroto
CBD
125
Opening preparation
Q3 2016
The Westin Jakarta@Gama Tower
5-star
Luxury Class
Rasuna Said
CBD
283
Opening preparation
Q3 2016
Alila - SCBD lot 11
5-star
Luxury Class
SCBD
CBD
250
Under construction
2016
InterContinental Jakarta Pondok Indah Hotel & Residences
5-star
Luxury Class
Pondok Indah
South Jakarta
470
Under construction
2017
The Langham District 8@Lot 28 SCBD
5-star
Luxury Class
SCBD
CBD
200
Under construction
2017
JW Marriott @St Moritz
5-star
Luxury Class
Puri Indah
West Jakarta
208
Under construction
2017
JW Marriott @Kemang Village
5-star
Luxury Class
Kemang
South Jakarta
275
Deferred
2017
Park Hyatt Hotel
5-star
Luxury Class
Kebon Sirih
Central Jakarta
150
Under construction
2017
W Hotel @Ciputra World Jakarta 2
5-star
Luxury Class
Mega Kuningan
CBD
126
Deferred
2018
Aryaduta - Holland Village
5-star
Upscale Class
Cempaka Putih
Central Jakarta
180
Under construction
2018
Sofitel
5-star
Luxury Class
Mega Kuningan
CBD
212
Under construction
2018
Regent
5-star
Luxury Class
Gatot Subroto
CBD
127
Under construction
2018
Rosewood Jakarta
5-star
Luxury Class
Satrio
CBD
200
Design Stage
2018
St Regis
5-star
Luxury Class
Gatot Subroto
CBD
280
Design Stage
Q1 2019
Waldorf Astoria
5-star
Luxury Class
Thamrin
181
Abandoned
CBD Total 5-star hotel rooms
3,267
Total star hotel rooms
9,847
Source: Colliers International Indonesia - Research, STR Global
47 Quarterly Report | Q2 2016 | Jakarta | Colliers International
2019
Budget Hotel In Q2 2016, there was one new budget hotel called MaxOne located in Kramat, Central Jakarta. This hotel provides 120 rooms. The room contribution from this hotel brought the overall supply of budget hotels to 5,087 rooms in Jakarta.
Cumulative Supply of Budget Hotel (Economy Class) in Jakarta 60 50 40 30 20 10
2019F
2018F
2017F
2016F
Q2 2016
Q1 2016
2015
2014
2013
2012
2011
2010
0
Source: Colliers International Indonesia - Research
Future Budget Hotel Development in Pipeline HOTEL NAME
STR CHAIN SCALE RATE
LOCATION
REGION
NO. OF ROOMS
PROJECT STATUS
PROJECTED COMPLETION TIME
Fame Hotel
Not define yet
Grand Cakung Mall
East Jakarta
97
Deferred
Q3 2016
Cordela Hotel
Not define yet
Kramat Raya
Central Jakarta
70
Under construction
Q3 2016
Amaris Tanah Abang
Economy
Jl Fachrudin
Central Jakarta
79
Deferred
Q3 2016
Oak Tree
Not define yet
Wahid Hasyim
Central Jakarta
120
Under construction
2016
Amaris Pluit
Economy
Pluit Raya
North Jakarta
112
Under construction
2016
Whiz - Cipete
Not define yet
Cipete
South Jakarta
180
Under construction
2016
NEO Kebayoran
Midscale Class
Kebayoran Lama
South Jakarta
102
Under construction
2016
POP! Hotel Pasar Baru
Economy Class
Pasar Baru
Central Jakarta
112
Under construction
2016
Luminor
Not define yet
Pecenongan
Central Jakarta
199
Under construction
2016
Amaris Slipi
Economy
Letjen S Parman
West Jakarta
146
Under construction
Q2 2017
MaxOne Hayam Wuruk
Not define yet
Hayam Wuruk
Central Jakarta
120
Under construction
2017
Whiz Hayam Wuruk
Not define yet
Hayam Wuruk
Central Jakarta
200
Ibis Budget Jaksa
Economy
Jl Jaksa
Central Jakarta
99
POP! Hotel Wahid Hasyim
Economy
Wahid Hasyim
Central Jakarta Total budget hotel rooms
Source: Colliers International Indonesia - Research, STR Global
48 Quarterly Report | Q2 2016 | Jakarta | Colliers International
150 1,786
Deferred
Q1 2018
Permit Process
2018
Design Stage
Q1 2019
Hotel Demand
Average Occupancy Rate (AOR)
Based on the Statistics Bureau Indonesia data, by the end of April 2016, there were a total of 664,892 foreign visitors who landed in Soekarno-Hatta International Airport, a 4.9% drop compared to last year.
During Q2 2016, hotel performance in Jakarta started to pick up. Business is running as usual. The end of Q2 2016 is festive season. A lesser number of people will go on business trips, so many people will fast forward their schedules. This causes an increase in MICE performance in the hotel sector. The corporate and government market pushed most of its meeting activities before the festival, so the occupancy in Q2 2016 increased.
The month of Ramadhan has also benefited the hotel business, not from room income but from meeting room and food revenue. During the season, there is an increase in gathering activities particularly from corporations holding break fasting gatherings or “buka puasa bersama” either internally or for clients. In general, hotels intensively promote special packages, taking advantage of the season of Ramadhan.
In Jakarta, the AOR increased quite significantly by 4.9% to 56.7% QoQ. In the CBD area, the AOR increased by 4.2% to 55.3% QoQ. Meanwhile, for hotels outside the CBD area, the AOR increased by 5.4% to 57.6% QoQ.
Number of Passengers Through Soekarno – Hatta, In the CBD area, the highest increase in occupancy happened in luxury-class hotels. With good market conditions, the AOR Ngurah Rai and Juanda Airports
for luxury hotels increased by 4.78% in Q2 2016, bringing the AOR to 53.17%. The second biggest increase in the CBD area was experienced by upscale-class hotels with 4.36% increase, bringing the AOR to 55.26%. Upper upscale-class hotels experienced 4.04% increase, bringing the AOR to 60.01% in Q2 2016. Upper midscale- and midscale-class+ hotels experienced 3.45% increase, bringing the AOR to 56.83%.
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000
The good occupancy rating by hotels in the CBD area was followed by hotels outside CBD. In upper upscale-class hotels, the AOR increased significantly by 5.73% QoQ, bringing the AOR to 54.59%. Meanwhile, in upscale-class hotels, the AOR increased by 3.95% to 60.34%.
1,500,000 1,000,000 500,000
Monthly Average Occupancy Rate (AOR)
Soekarno - Hatta
Ngurah Rai
2016YTD
2015
2014
2013
2012
2011
2010
2009
2008
0
100% 90%
Juanda
80%
Source: Statistics Bureau Indonesia
70%
Performance
60%
The tight competition has exerted a big impact on the hotel sector. To achieve the revenue target, they pushed to optimise every sector in the hotel.
40%
50%
30% 20% 10% 0% Jan
Feb Jakarta
Source: STR Global
49 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Mar CBD
Apr Outside CBD
May
Average Occupancy Rate (AOR) in Jakarta
Average Occupancy Rate (AOR) in Outside the CBD
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0% 2013
2014 Jakarta
2015 CBD
Q1 2016
2013
Q2 2016
2014
2015
Upper Upscale Class
Outside CBD
Source: STR Global
Source: STR Global
Average Occupancy Rate (AOR) in CBD
Average Daily Rate (ADR)
100%
Q1 2016
Q2 2016
Upscale Class
Jakarta’s ADR slightly increased by 0.15% to USD82.65 in Q2 2016. There was a 0.71% increase of ADR for hotels in Jakarta CBD to USD122.25. Meanwhile, areas outside the CBD experienced 0.35% increase.
90% 80% 70%
In the CBD area, the ADR for all classes generally slightly increased. The highest increase happened in luxury-class hotels, exhibiting 0.87% increase. It brought the ADR to USD178.73. Upper midscale- and midscale-class+ experienced 0.85% increase to USD60.87. Upscale-class hotels also experienced a spike. The AOR increased by 0.59% to USD76.58. In upper upscale-class hotels, the increase was only 0.24% to USD120.11.
60% 50% 40% 30% 20% 10% 0% 2013
2014
2015
Q1 2016
Q2 2016
Luxury Class
Upper Upscale Class
Upscale Class
Upper Midscale & Midscale Classes+
Source: STR Global
For areas outside the CBD, the ADR were varied. In upper upscale class, there was a 0.70% increase, which brought the ADR to USD87.68. Meanwhile, for the upscale class outside the CBD, there was a 0.48% decrease, bringing the ADR to USD63.05. The increase in ADR of Jakarta hotels in Q2 2016 was affected by the numerous MICE activities held before the festival. Although the increase was not significant, it signalled that the performance of Jakarta hotels is getting better.
50 Quarterly Report | Q2 2016 | Jakarta | Colliers International
Monthly Average Daily Rate (ADR)
Average Daily Rate (ADR) in CBD
USD150.00
USD200.00
USD120.00
USD160.00
USD120.00
USD90.00
USD80.00
USD60.00
USD40.00 USD30.00 USD0.00 USD0.00
2013 Jan
Feb Jakarta
Mar CBD
Apr
May
Outside CBD
2014
2015
Q1 2016
Q2 2016
Luxury Class
Upper Upscale Class
Upscale Class
Upper Midscale & Midscale Classes+
Source: STR Global
Source: STR Global
Average Daily Rate (ADR) in Jakarta
Average Daily Rate (ADR) in Outside the CBD USD90.00
USD150.00
USD75.00
USD120.00
USD60.00 USD90.00 USD45.00 USD60.00 USD30.00 USD30.00
USD15.00 USD0.00
USD0.00 2013 Jakarta Source: STR Global
2014 CBD
2015
Q1 2016
2013
Q2 2016
2014
Upper Upscale Class
Outside CBD Source: STR Global
51 Quarterly Report | Q2 2016 | Jakarta | Colliers International
2015
Q1 2016
Upscale Class
Q2 2016
Although the performance of Jakarta hotels is getting better, competition in the hotel sector in Jakarta is getting tighter. Based on Colliers’ database, Jakarta is expected to have additional 4,756 new rooms by the end of 2016. It consists of 1,302 3-star hotel rooms, 2,796 4-star hotel rooms and 658 5-star hotel rooms. Hoteliers are challenged to be able to maintain the AOR and ADR of their hotels, but looking at the current conditions, hoteliers are faced with two options. The first is to maintain the AOR but lose their ADR or maintain their ARR but lose the AOR. In several areas, hoteliers may maintain both AOR and ADR with positive trend. This could happen because the supply grows in line with the demand. Thus, when there is new supply, the changes in AOR and ADR are not very significant because the market does exist. The problem happens when supply exceeds demand. The market will be divided, which will cause the AOR or ADR or both to drop. Unfortunately, this recently happened in Jakarta. Most hoteliers were urged to maintain either their AOR or ARR. The condition worsened because of the loss of some corporate markets. Other than that, the government announced that there will be an amendment for the Government Expenditure budget due to changes in some indicators. One is the operational expenditure, which includes business trips and meeting packages. This condition will impact the hotel sector, especially the MICE sector and those related to the government market. The same situation happened in the end of 2014 when the government issued a regulation to ban government meetings in hotels. It brought down hotel performance significantly and the government market was lost. Hoteliers should prepare for the worst situation if the government amends the budget.
For more information:
Contributors:
Ferry Salanto Senior Asociate Director | Research +62 21 3043 6888
[email protected]
Eko Arfianto Manager | Research
Nurul Soraya Senior Research Executive | Research
Hern Rizal Gobi Assistant Manager | Research
Copyright © 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been 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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