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July 28, 2008

Survey: Orders for office space up 280% in H1 in Indonesia
Despite a decline in the second quarter, the net take up for office space in Jakarta's central business district throughout the first semester reached 196,000 square meters, or a 280 percent jump from a year earlier, Jakarta Post reported, quoting a property survey.

It was the highest six-monthly take up since 1997, according to the survey released Thursday. The survey was conducted by consultant PT Property advisory Indonesia (Provis) in association with Cushman and Wakefield.

Provis divided Jakarta into two areas: CBD and non-CBD. CBD refers to such areas as Sudirman-Thamrin, Senayan and Kuningan, while non-CBD areas are mostly in the south of Jakarta.

Arief Rahardjo, associate partner of Provis, said the occupation if new office buildings, such as Permata Kuningan in South Jakarta and Menara BCA of Central Jakarta, played a major part in the high take up in the first half of the year.

The survey said the high take up pushed the CBD occupancy rate up by the end of the first semester to 86.4 percent, with approximately 489,300 square meters of space remaining vacant.

As of the end of June, the total supply for the Jakarta CBD is 3.60 million square meters, higher than the demand of 3.11 million square meters.

"Some 282,600 square meters of supply is scheduled to be completed by the end of this year," Arief said.

The high level of take up occurred despite a steady rise in the average rental price, particularly in the second quarter of the year. It rose over the second quarter by 2.5 percent to 134,800 rupiah (US$14.60) per square meter per month from 131,400 rupiah per square meter recorded in the previous quarter.

Arief said the expensive prices were triggered in part by the government's move in May to increase subsidized fuel prices by an average of 28.7 percent.
He said the price was likely to increase over the next few quarters.

"Rental rate in the next quarter is projected to increase in line with the adjustment of the electricity cost," he said, referring to the possibility of a power tariff increases later this year.

Meanwhile, for the non-CBD areas, the cumulative demand is 2.0 million square meters, against 2.19 million square meters in supply. The occupancy rate is 91.4 percent, 90.3 percent of which occurs in the southern part of the capital.

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