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Downward occupancy trend in commercial spaces in Indonesia to sustain in 2021
The downward trend in the occupancy rate of commercial property is expected to continue this year in Jakarta and Surabaya, even as new real estate is set to open in the two cities to add to the supply glut.
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Rush-hour traffic flows smoothly along both inbound and outbound lanes on Jl. Jendral Sudirman in Central Jakarta on March 19, 2020. Many companies in the capital city adopted a remote work policy in response to the COVID-19 health emergency, which directly contributed to a decline in office space occupancy rate, according to Colliers International. (JP/Seto Wardhana)
Analysts expect the downward trend in the occupancy rates of commercial real estate in Jakarta and Surabaya will continue this year as supply overtakes reduced demand.
Property consultancy Colliers International projects that the occupancy rate of office spaces in and around Jakarta’s central business district (CBD) will hover between 78 percent and 80 percent in 2021.
This is lower than the 80 percent to 82 percent occupancy rate recorded in the final quarter of 2021, which had declined from the 2019 rate of between 82 percent and 84 percent.
“Prospective tenants seeking expansion and companies wanting to extend their footprint both in [and around] the CBD are expected to boost sales. But this will not be reflected in the occupancy rate,” Colliers International senior associate director and research head Ferry Salanto said in a virtual press briefing on Wednesday.
“This is because there is no balance between supply and demand yet. So the main problem in office [real estate] is that there is still a very serious oversupply,” he added.
Read also: Office space occupancy to drop further in 2021: Colliers
