Jakarta

Rental apartments in high
demand


Anissa S. Febrina, The Jakarta Post, Jakarta

A businesswoman with several shops in Glodok, Central Jakarta, just bought six strata-titled middle-class apartments in a residential tower in Kemayoran, North Jakarta.

""I will use one as accommodation for visiting clients and rent the rest to anyone who is interested. It is a relatively safe investment,"" she told a property researcher.

With a slow but sure shift to urban vertical living, those smart enough to read the market have stockpiled units of middle-class apartments as investment.

An apartment bought for Rp 300 million, for example, can generate between Rp 3 million to Rp 7 million a month, as university students and the working middle class are increasingly opting for urban lifestyles.

""It is affordable and relatively more comfortable than kos-kosan (renting a room in a boarding house),"" said 24-year old journalist Lizbeth, who shares a 4-million-a-month apartment in Kelapa Gading with two of her friends.

Those who invested in middle-class apartments years ago appear to have made the right decision as demand for rental apartments started to climb during the first quarter this year.

Property consultant Procon Indah revealed that, in the first quarter of 2006, the occupancy rate of downscale to middle-class apartments increased to 75.2 percent from around 70 percent the previous quarter.

Some 1,699 units were taken up as several apartment projects had been completed, Procon director Lini Djafar said Tuesday.

Apartment blocks located in West Jakarta's Tanjung Duren, as well as North Jakarta's Kemayoran and Kelapa Gading will see higher demand as they are close to universities and commercial areas, she added.

According to apartment marketing executives, more than 50 percent of sold units usually end up in the hands of property investors who rent them to third parties.

""The yield from this kind of investment ranges between 8 to 10 percent a year. As savings and deposits interest rates are likely to decrease, people will eye the property sector,"" Lini added.

These new investors will become the new competitors for serviced apartments and could affect the rental prices of the later, Procon projected.

According to research done by the Center for Indonesian Property Studies (CIPS), there will have been 65,000 new apartment units made available in the Greater Jakarta by 2007.

""For now, there is enough supply already for the high-end market,"" CIPS director Panangian Simanungkalit said. ""The segment with the biggest potential is people in the market for housing priced between Rp 150 and Rp 200 million.""

Jakarta's 2006 prospective supply of middle-class apartments

Building Location Scheduled

completion

Poin Square Lebak Bulus, S. Jakarta 2Q
Mediterania Lagoon Kemayoran, N. Jakarta 2Q
Mediterania
Boulevard Kemayoran, N. Jakarta 2Q
Sudirman Park KH Mas Mansyur, C. Jakarta 3Q
Casablanca
Mansion Casablanca, S. Jakarta 3Q
Mediteran Marina Ancol, N. Jakarta 3Q
The Bellezza Permata Hijau, S. Jakarta 4Q
Pearl Garden Gatot Subroto, S. Jakarta 4Q
Pallazzo Kemayoran, N. Jakarta 4Q
The Capital
Residence SCBD 4Q
Hampton's Park Tarogong, S. Jakarta 4Q

Source: Coldwell Banker Commercial Indonesia

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