Around three quarter of coworking spaces and serviced offices in Greater Jakarta are located in the central business district area, said JLL head of research James Taylor.

“[With] flexible spaces, including coworking spaces and serviced offices, service providers have been growing quite aggressively, as reflected in the expansion of spaces used for the providers in past years,” Taylor said.

For the operators of coworking spaces, the booming startup business has spurred the aggressive growth of coworking spaces as local entrepreneurs seek a more nurturing and affordable environment to develop their businesses.

The space providers operating in Greater Jakarta were dominated by CoHive, which made up 23 percent of the market, followed by WeWork at 16 percent, GoWork Indonesia at 11 percent and Regus at 9 percent, Taylor said. The number of operators has reached 50, spread across CBD in 110 places.

The overall amount of space inhabited by coworking spaces and serviced offices in CBD increased by 6 percent to about 170,000 square meters in the second quarter from about 160,000 sq m in the first quarter of this year.

Meanwhile, the overall occupancy rate in CBD declined to 76 percent in the period ending June from 78 percent recorded at the end of last year, with general supply of office spaces in CBD reaching 272,000 sq m.

The balance between supply and demand would improve from 2021 to 2023, Taylor said. He reported that the supply of office spaces would decline to an annual average supply of about 100,000 sq m in the three years, while annual net absorption would increase, going slightly above 200,000 sq m.

“The demand will remain strong based on our long-term outlook, but there will be fewer new office spaces. Consequently, the occupancy rate will improve,” Taylor said, adding that the occupancy rate would reach about 80 percent at the end of 2023.

There are an estimated 250 coworking spaces spread across the country, at least 20 percent of which are concentrated in Jakarta, according to Coworking Indonesia, an association of coworking space operators.

The figure had grown exponentially from around 45 coworking spaces in the middle of 2016 as operators kept on expanding, Coworking Indonesia secretary-general Felencia Hutabarat said.

“There is a very strong growth of startups and entrepreneurs who are seeking physical offices [...] like coworking spaces, which are quite helpful as their rent is flexible and tenants do not have to manage or maintain them as an asset,” Felencia told The Jakarta Post recently.

Tenants or members of these coworking spaces see the offices not only as a practical place to work but also as a place where they are more likely to meet stakeholders that could encourage their growth. However, uneven economic growth in different parts of the country has presented a challenge to the coworking space business.

“In regions where the economic growth is stalling, opening or operating a coworking space is more challenging as potential tenants might find it cheaper to run their businesses from home or rent simpler spaces, like a small shophouse,” Felencia said. (syk)

Rachmadea Aisyah contributed to this story.

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