A report from international analyst firm Cushman & Wakefield this week maintained that the prospects for landlords are positive and that they have been increasing the asking prices on their Jakarta offices.
See examples of office spaces for rent in Jakarta here
Indeed, demand for office space in the Indonesian capital has been rising so strongly in recent months that base prices increased by between five and ten per cent in many cases during the final quarter of 2010.
The central business district is where much of the city’s office market activity is taking place, with finance and insurance sector operators among those reportedly looking to expand their office presence or move to another site nearby.
Reflecting on the report, Artadinata Djangkar, from the development firm Ciputra Property, told the Jakarta Globe: “Demand will continue growing. I see existing tenants moving to new buildings as they expand their business.”
Some concerns have been raised over the issue of rising inflation in Jakarta but these fears are being offset at present by an Indonesian economy growing at close to six per cent year on year.
According to Cushman & Wakefield’s report, the lion’s share of the new office occupancy deals in Jakarta in Q4 2010 related to newly constructed properties like Bakrie Tower and the UOB Plaza.
The same commercial property agency has been opening up offices of its own in various parts of the world this month, with new sites in Rotterdam and Bahrain having opened for business in recent days.
Editor’s notes: In the first quarter of 2023, it was noted that traffic congestion continued to worsen in Jakarta making the commute into the office for employees difficult. For this reason, offices close to public transport links performed well.
Despite this, the CBD remained the most popular location for tenants. Landlords and developers in recent preceding years had been focused on occupancy levels so rental rates had remained stable as tenants had been incentivised to sign leases with lower rental rates.
As the economy improves, and due to a relatively small longer-term development pipeline, it was expected that headline rents, particularly for superior office space, would increase by 4 – 5% between 2023 and 2025.
Prime office rents in Jakarta were IDR210,395 in Q1 2023 and were expected to grow to IDR211,141 by the end of 2023 and to IDR248,870 by the end of 2025.
In January 2022, it was confirmed that Indonesia would move its capital city from Jakarta to Nusantara on the island of Borneo to take the pressure off the infrastructure of Jakarta, and because the city was sinking due to the over-extraction of groundwater.
The move will cost an estimated 466 trillion Indonesian Rupiah ($32.4 billion or £23.8 billion).