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Jakarta : healthy growth despite economic slowdown - Q2 2013

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Jakarta : Healthy growth despite economic slowdown - Q2 2013

Economic growth in Indonesia continued to decelerate, against the backdrop of sluggish recovery in the global economies. Inflationary pressures remained high and are expected to persist following the fuel price hikes in late June. This, with weak export growth due to falling commodity prices and soft external demand, will continue to act as a drag on economic growth going forward.

Due to limited office supply in the Central Business District (CBD), average office rents rose significantly in Q2. CBD office rental rates increased by 6.5% quarter-on-quarter (q-o-q) to approximately IDR200,000 per sq m per month. However, the service charge remained stable at close to IDR64,000 per sq m per month.

The average occupancy rate of major shopping malls in Jakarta was stable at 91% in Q2. Notwithstanding, the average asking base rents of major shopping malls rose 2.2% q-o-q to a little over IDR410,000 per sq m per month in Q2, reflecting healthy growth. The service charge held steady at approximately IDR100,000 per sq m per month.

Average prices of new apartments in the CBD increased slightly by around 1.7% from last quarter to average IDR32.3m per sq m. Rental values increased by 4.2% from last quarter, from an average of USD19.10 per sq m to USD19.90 per sq m. Rental growth of CBD apartments is expected to continue due to increasing demand from the middle-up income households as well as limited pipeline supply in the region.

Source : DTZ (Groupe UGL)

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