(PT Metropolitan Kencana)

Cushman & Wakefield, one of the world'€™s largest privately held commercial real estate services firms, revealed that the first quarter of 2014 saw Jakarta'€™s rental apartment market experience an increase in rental rates, despite a slight decrease in occupancy rates.

The slowing of Indonesia'€™s property market in the first quarter of 2014 affected some areas. However, purchasing- and selling-related activities for apartments in premium areas such as TB Simatupang and Pondok Indah, South Jakarta,remain high even though property prices are skyrocketing.    

In the Pondok Indah area, for example, the demand for spaces for the twin-towers at Pondok Indah Residence alone has continued to grow, despite its relatively high price, from Rp 2.9 billion (US$235,523) to Rp 6 billion.

'€œThere are investors who make a purchase to rent their properties out to other tenants. But most of the apartment buyers are end users,'€ Herman Widjaja, associate director of PT Metropolitan Kencana, the developer of Pondok Indah Residence, said as quoted by kompas.com.

He added that many investors were interested in developing apartments or buying spaces to rent them in Pondok Indah or the neighboring area of TB Simatupang due to the high profitability of businesses in the areas.

'€œA lot of professionals, including executives and expatriates living in the areas, are the captive market for Pondok Indah'€™s property business. These people are contributing to the high performance of the property sector here,'€ Herman further said.

Data from the developer indicates that Pondok Indah Golf Apartments occupancy rate has reached 100 percent; 90 percent of whom, as the developers vice president director Jeffri S. Tanudjadja said, were expatriates.  

According to data from Colliers International Indonesia, limited land in Simatupang and Pondok Indah has caused a shortage in the new supply of leased apartments. Pondok Klub Villa and Emerald apartments are among the few existing available apartments.

To cater to growing demand for more apartments in both areas, PT Metropolitan Kencana as the developer is now embarking on the construction of a third tower at Pondok Indah Residence. The developer has allocated Rp 2.8 trillion for the development of this new apartment tower.

The developer has started the construction of two towers, namely Maya and Kartika, which is slated to be completed in the next three years, and is also actively engaged in marketing activities for the first two towers, with a price of Rp 36.2 million per sq m for a 80 sq m unit in Maya tower and Rp 37.7 million per sq m for a 159 sq m unit in Kartika tower.

And prospective tenants have completed booking fees in at least 85 percent of all 616 units in both towers.

Meanwhile, investment opportunities in apartment developments in cities adjacent to Jakarta have grown in the last few years. People can buy an apartment unit at a price of Rp 10 million or Rp 25 million per sq m.

The demand for apartments in suburban cities, such as Bogor, Depok, Tangerang and Bekasi, has increased along with the ever-growing number of people who choose to live in these cities due to the high prices of land and houses in Jakarta. New job and business opportunities in the cities have also attracted many newcomers to reside in the areas.

Currently, a total of 18 projects comprising 20,962 apartment units are being developed on the outskirts of southeast Jakarta.

Meanwhile, a total of 21 projects comprising 11,300 apartment units are being developed on the outskirts of southwest Jakarta.

One of the most sought-after locations for apartment development on Jakarta'€™s outskirts is, arguably, the Serpong area in South Tangerang. More and more people are flocking to the area due to its complete array of facilities, from office buildings, schools, shopping centers and hospitals, among others.

Recent Indonesia Property Watch research showed the growing demand, leading to the price growth of apartments in the Serpong area growing by some 50 to 60 percent.

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