The GDP growth forecast for 2013 was maintained at 5.5%-5.9%. Bank Indonesia (BI) raised its benchmark interest rate (BI rate) by 25 basis points (bps) to 7.5% in November in an effort to achieve the 4.5 ± 1 % inflation target in 2014 as well as to control the current account deficit to a healthier and sustainable level. Meanwhile, the IDR continued to depreciate against the USD by about 10% quarter-on-quarter (q-o-q) in Q4 to 11,662, and reached its lowest rate in mid-December that exceeded 12,000 IDR per USD.
The average office rental rates in the Central Business District (CBD) area increased by a healthy 11% q-o-q to approximately IDR 262,230 per sq m per month in Q4, although the pace was slower than the 20% growth achieved in the last quarter. Various factors contributed to the slowdown in the market, with political and economic factors being the main cause. Office stock remained unchanged as at Q4 as no new building was completed.
Despite the economic slowdown and the moratorium on mall development, retail rents in Jakarta continued to increase. As at Q4, total retail stock stood at 2.25 million sq m, with the newly completed Baywalk Mall and Cipinang Indah Mall. Service charge increased slightly to approximately IDR 104,476 sq m per month as a result of the electricity cost adjustment, effective from November.
The average asking prices of uncompleted condominiums in the Jakarta CBD remained stable q-o-q at IDR 36.5m per sq m in Q4. Economic uncertainties affected investor appetite in buying strata-titled condominiums and this could exert downward pressure on asking prices going forward. Meanwhile, average asking rental values declined 6.6% q-o-q from USD20.07 per sq m per month in Q3 to USD18.76 per sq m per month in Q4.
Source : DTZ (Groupe UGL)