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Jakarta Post

Office rental rates to keep decreasing: Jones Lang LaSalle

News Desk (The Jakarta Post)
Jakarta
Wed, July 20, 2016

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Office rental rates to keep decreasing: Jones Lang LaSalle Office buildings stand among other tall buildings in Jakarta. (Tempo/Tony Hartawan)

O

ffice rental rates in Jakarta’s central business district (CBD) and non-CBD areas will continuously decrease in the next two years due to oversupply, a property consultant has projected.

Jones Lang LaSalle reported that there would be about 600,000 square meters (sqm) of additional office space in Jakarta this year, which could potentially lead to price competition among landlords as occupancy rates decline.

“The large amount of office space supply needs time to be absorbed. That’s why the rental price will continuously decrease until next year,” the firm’s head of markets, Angela Wibawa, said in Jakarta on Wednesday.

The average office occupancy rate decreased to 85 percent in the second quarter of 2016, from 87 percent in the first quarter of the year.

In the second quarter, two newly completed office buildings came onto the market, namely the International Finance Center 2 in the Sudirman area and Capital Place on Gatot Subroto. The total amount of office space was around 140,800 sqm, according to Jones Lang LaSalle’s data.

The average rental rate was also down about 2.8 percent quarter-on-quarter to Rp 300,000 (US$23) per sqm from Rp 308,000 per sqm in the CBD — such as in Kuningan, South Jakarta, and Central Jakarta’s Sudirman area.

Meanwhile, rental rates in non-CBD areas — such as on Jl. TB Simatupang, South Jakarta, and in Slipi, West Jakarta — decreased around 1.5 percent quarter-on-quarter to Rp 184,000 per sqm from Rp 187,000 on average. (vny/ags)

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