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Jakarta property market off to rough start this year
Jakarta's property sector remains under pressure as occupancy rates for office and retail space are down, while the government incentive has yet to spur apartment sales.
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A man crosses a bridge at the Sudirman business area in Central Jakarta on May 20. The government expects that the gradual reopening of economic activity under the “new normal” protocols will start in early June. JP/Dhoni Setiawan (JP/Dhoni Setiawan)
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akarta’s property market saw sluggish growth in the first quarter of this year, confirming analysts’ expectation of weak market growth in the capital city’s property market throughout 2021.
Property consultancy Colliers International reported declining occupancy rates in retail and offices as well as muted sales in new apartments as business activity and consumer spending remained low.
“If we look at the demand cycle, the bottoming was expected in 2020 but we can see that, with the reality of a pandemic that is out of our control, we now expect the cycle to continue and may reach its lowest point this year,” said Colliers research head Ferry Salanto.
The pandemic battered Jakarta harder than most provinces as the capital remains the outbreak’s epicenter, which forces the Jakarta administration to occasionally impose stricter and longer mobility restrictions that include limiting office and shopping occupancies.
Offices outside the central business district (CBD) saw occupancy rates drop 1 percentage point quarter-on-quarter (qoq) to 79.7 percent in the January-March period, but the rate steadied at around 80 percent for CBD offices, according to Colliers data.
Rental prices were also down 1 percent qoq to Rp 255,185 (US$17.48) per square meter for CBD offices and by 5 percent qoq to Rp 181,287 per sq m for non-CBD offices.
“[Demand] is generally in decline and the new buildings that just started operating also face difficulties in seeking tenants to fill their empty spaces,” said Ferry. “So there is an adjustment in rental prices.”
