TheJakartaPost
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COVID-19 has little impact on retail, office rents, but long-term outlook bleak
Rents in the office market are expected to decline this year as tenants were facing financial hardship amid the country’s economic downturn
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The Grand Indonesia mall in Jakarta is quiet on March 23, after the city administration implemented its social distancing policy on March 15. (Antara/Rivan Awal Lingga)
Rents for both retail and office space in Jakarta are expected to remain relatively stable despite the unfolding COVID-19 outbreak, according to real estate services firm Cushman & Wakefield.
A report released by the company on April 20 shows that the average monthly rent was Rp 299,000 (US$19.17) per square meter for office space and Rp 188,700 per sq m for retail space between January and March.
Cushman & Wakefield, which operates in 70 countries with more 51,000 employees, projected rents in the retail real estate market to remain at the current level while rents in the office market would decline this year, because tenants were facing financial hardship amid the country’s economic downturn.
“So far, the retail market in Jakarta stays in a relatively positive situation with 80.8 percent occupancy rate, so the COVID-19 outbreak is affecting negatively only in short term,” the firm’s director of research and strategic consulting, Arief Rahardjo, told The Jakarta Post via text message on Wednesday.
The real estate retail and office markets were hit by the government’s measures to contain the fast-spreading coronavirus. As of April 23, as many as 7,775 confirmed cases were recorded, with 647 people having died and 960 having recovered.
Jakarta, the national epicenter of the outbreak, is temporarily halting office activities of nonessential businesses and ordering people to work from home until May 22.
