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Office buildings increasingly vacant
The vacancy rate of office buildings in a central business district (CBD) area in Jakarta is continuously increasing because supply is higher than demand
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The vacancy rate of office buildings in a central business district (CBD) area in Jakarta is continuously increasing because supply is higher than demand. The trend will continue in coming years, according to Savils Indonesia.
In its report, Savils Indonesia shows that the vacancy rate increased to 8.4 percent by the middle of 2015. In 2014, the vacancy rate was 4.8 percent.
According to Savils Indonesia's research and consultant head Anton Sitorus, this condition is related to weakening business activities in Jakarta due to the ongoing economic slowdown. 'The office space demand and the transactions are significantly falling in the first half of 2015. Tenants and potential tenants only wait and see,' he said as reported by kompas.com on Wednesday.
According to Anton, for premium offices, grade B and C, the vacancy level was 2.5 percent and 4.8 percent, respectively.
Meanwhile, the availability of office space for grade A has increased from 6.4 percent at the end of 2014 to 17.1 percent in the middle of 2015.
Data from Savills Indonesia also shows that there is an increase in the supply of office buildings as some new towers have recently finished construction projects. This year, there is an additional 228,000 square meters of office space in CBD coming from Sahid Sudirman Center, Noble House and Grand Rubina 1. Total supply is 4,930,000 squared meters.
Most of the supply in the CBD area is in the grade B category (36 percent), followed by grade A (30 percent) and grade C (14 percent).
'The slowing economy has had an impact on rent growth in the last 20 months,' he added. He further said that rent was declining since last year, while premium office area rent was falling 5.2 percent. (edn/bbn)
