T

he property business will improve and attract foreign investors this year, with condominium and industrial estates being favored, according to property consultant Jones Lang Lasalle.

The situation will be far different from last year when the industry slowed due to the sluggish global economy and domestic political tension.

Vivin Harsanto, head of advisory at Jones Lang Lasalle (JLL), said the property market would grow better than last year when the country saw a significant rise in the central bank'€™s interest benchmark and suffered from currency
volatility.

This year'€™s improved conditions are reflected in high enthusiasm from foreign investors to invest in the country'€™s property market.

Vivin said that residential property, especially in Greater Jakarta, would still be the choice for investors thanks to strong demand from the market.

The market for condominiums, she said, would grow positively this year as the sector was seen as being lucrative for investors thanks to continually rising prices.

'€œThe growth of the condominium market will be positive because it is the sector people look to if they want to invest in residential property,'€ she noted.

'€œAlso, the country is seeing more young people returning from overseas study and looking for a place to live. In fact, they are no longer accustomed to living in landed houses, thus driving positive growth in condominium demand,'€ she said.

According to JLL data, condominium supply for the period 2015-2018 is estimated to reach 57,000 units, with sales likely to reach 80 percent. This may drive developers to boost supply to meet demand.

The new supply is around 60 percent of the existing supply of 93,639 units, with a take-up rate of 97.5 percent.

In addition, annual take-up for condominiums in 2014 was a record high, hitting around 19,600 units. This is in contrast to other sectors that mostly recorded moderate to slow growth last year.

Demand for central business district (CBD) offices, for instance, registered a record-low absorption with around 48,000 square meters last year, much lower than the 300,000 sqm recorded in 2013.

The decreasing absorption, Vivin explained, was mostly due to unfavorable global market conditions, as most of the CBD office buyers were businesses highly sensitive to the global economic condition, such as those in the mining and banking sectors.

In addition to condominiums, Vivin said that Greater Jakarta'€™s logistics and industrial sector was also expected to show promising growth this year, with entries from foreign players hoping to develop their businesses in Indonesia.

'€œGreater Jakarta'€™s industrial estates have become development opportunities for both local developers and foreign investors with improved infrastructure availability,'€ she said.

'€œThere are a number of players expected to enter this year, mostly from automotive and food industries,'€ she added.

JLL documentation shows that 300 hectares of new supply in the industrial property market is expected to complete this year, in addition to the current 11,500 ha of supply, with a sales rate of around 74 percent.