Developers are moving southward to construct new office buildings in the capital city in a search for cheaper land prices and a specific image, say property consultants at PT Procon Indah.
The company’s data shows that as of the second quarter of 2010, South Jakarta had almost 20 percent of all high-rise offices in the capital city, based on a total supply of 138,900 square meters (sqm) and a cumulative demand of 103,500 sqm.
Over the past five years, the demand for office space in South Jakarta has grown 29 percent, while demand in other parts of Jakarta has increased by 15 percent.
South Jakarta added 64,000 sqm of new office space in the second quarter, while other areas of Jakarta recorded no new development in the same period.
Procon Indah’s research and consulting head Utami Prastiana said Wednesday that the shift in office building development to South Jakarta was motivated by high demand in the area, which encouraged property owners to develop office buildings to accommodate the demand.
She said that several factors, such as location image, accessibility, land availability and price affordability, led to more vibrant growth in the South Jakarta office space market than in other areas of the city.
“South Jakarta has a prime neighborhood image. It is surrounded by established prime residential and commercial developments,” she told reporters at a press conference at the company’s office at the Indonesia Stock Exchange Building in Jakarta.
“South Jakarta has a prime neighborhood image. It is surrounded by established prime residential and commercial developments”
The operation of Jakarta’s outer ring road provides easier access to the South Jakarta district for people from other parts of the city, she added.
The affordable price of office spaces in the area, as compared to space in Jakarta’s central business district (CBD), was also among the reasons why the strata title office market in South Jakarta had been growing more active, she said.
Procon Indah chief executive officer Lucy Rumantir said that domestic companies operating in non-financial sectors dominated office space in South Jakarta. Financial institutions preferred to have offices in the CBD because it was near the Indonesian Stock Exchange and major banks, she added.
She said that as many as 90 percent of companies in South Jakarta preferred to buy office spaces instead of renting.
“It is more economical for them to buy space than to pay monthly or yearly rental fees,” she said.
The price of office space in South Jakarta is US$1,500-$1,700 per sqm, while the monthly rental fee is between $10 and $13 per sqm.
Lucy said that companies chose to have offices in South Jakarta because most of their employees lived in nearby municipalities such as Cibubur, East Jakarta; Cirendeu, Tangerang and Pamulang, South Tangerang.
South Jakarta currently has five existing strata title office buildings: Victoria Building, Graha Simatupang, MTH Tower, Belleza Office Tower and Gandaria 8. Two buildings — Sovereign Tower and Alamanda Tower — are now under construction. (rdf)
