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apartment sector
In one year, the average apartment price, particularly for unsold units in the CBD, has climbed substantially by 24.5% y-o-y from IDr23.1 to 28.8 million/sq m/month. as of September 2012, the total apartment supply in jakarta has reached 119,345 units while the annual supply for the whole of 2012 will be 22,456 units representing 17.5% of the total cumulative supply up to the end of 2012. another 28,932 new apartment units are expected to invigorate the market over the next two years. Meanwhile, absorption rates rose quite a bit from 76.2 to 81.3% in the same period last year.
retail sector
the retail market continues to perform well, albeit moderately, with average asking rental rates for premium class shopping center rising 10% y-o-y to IDr846,042/sq m/month. We anticipate a further increase in the asking rental rates, given that the amount of retail space in the future will be quite limited. Of the total 252,081 sq m of space in 2012, 93% has been booked. In 2013, there will be 226,400 sq m of retail space but 72% has been pre-committed before it is ready for occupation. Similarly, of a total of 49,000 sq m projected to fill the 2014 market, 46% has been reserved by several tenants.
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office sector
Supply
two office towers are officially in operation in jakarta, i.e. World trade Center II, located in jalan jenderal Sudirman (CBD) and Sovereign Plaza, located in jalan tB Simatupang (South jakarta). World trade Center II, at around 57,000 sq m, has been assessed for the Green Mark, making it one of the first certified environmentally sustainable buildings in jakarta. another 16,020 sq m of office space was contributed by Sovereign Plaza of which most is offered as strata-title office space. these two buildings constitute the cumulative 6.55 million sq m supply of office space in jakarta as of 3Q 2012. thus far, about 53% of the total projected 378,131 sq m of office space in the CBD for 2012 has been completed, while in the outside CBD area, 53% of a total of 233,556 sq m is already on the market. there still remains 287,718 sq m of office projects under construction for the remainder of 2012. the dynamic market has caused supply projections for 2013 - 2014 to change from our previous estimation. Future supply includes projects under construction and projects being announced by the developers. the latter is relatively subject to change depending on three main factors including financing issues of the project, permits and the availability of specific contractors (like piling jakarta office cumulatiVe supplY
10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2011 2012F 2014F 2012YtD 2016F 2015F 2008 2010 2013F 2000 2002 2004 2006 2001 2005 2003 2009 2007 1995 1996 1998 1999 1997
contractors), which could alter the schedules of project completion. In our previous report, it was stated that projects in the pipeline during 2013 and 2014 (including projects under construction and new projects being announced) totalled 1.4 million sq m. as we consistently update the development and planning progress, this quarter we report that there will be around 1.05 million sq m of office projects in 2013 2014 which are scheduled to meet their completion targets, including projects being announced. all office projects under construction and scheduled for completion in 2013 in all of the jakarta area total 150,781 sq m distributed around the CBD (26%) and tB Simatupang (40%) with the remainder in the outside CBD and tB Simatupang area. the total office projects in 2013 are comprised of six developments and on average have gone through 50% of the structural work. Meanwhile, of the total 23 office projects for 2014, the construction of 18 projects is underway, higher than our projections from last quarter. these under-construction office projects total 732,802 sq m, while projects being announced for completion in 2014 but not having started construction, total 178,182 sq m.
sq m
Existing Supply
annual Supply
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| colliers international
cbd
as mentioned earlier, World trade Center II became the newest office space in the CBD bringing the total office supply to 4.56 million sq m. For 2012, the completion of WtC II brings the total of office space completed year-to-date to around 200,000 sq m. total supply projections for the full year of 2012 is around 378,000 sq m and the remaining projects under construction will most likely be delivered as scheduled. according to our records, the total annual supply for 2012 was one of the highest in the history of office supply which represents 8.7% of the total existing supply of 2011. In 2013, only Menara Prima 2 will be completed. In the previous report. By contrast, supply projections for 2014 - 2015 will be substantial in number. In 2014 alone, eight towers with almost 500,000 sq m are expected to become new supply. From our observations, six projects have been under construction (413,538 sq m) while the remaining are still in planning but announced to be completed in 2014. as of 3Q 2012, rasuna tower, after having structural redesign is commencing construction together with Wisma Mulia 2, Life tower and Sahid Sudirman Center. Similarly, the first tower of Gran rubina (offered as strata-title offices), which will adopt an eco-smart development concept, is officially in the ground-breaking stage as of the middle of September. One other project, Chase tower, has started construction work on site. In-planning office towers projected to finish in 2014 include the Noble House located in the Mega kuningan area. this tower has been doing soil tests and is likely ready for construction. the other project is the second tower (tower two) at the City Center Complex located in the Mas Mansyur area as the continuation of tower One which officially operates. these two towers will contribute 84,204 sq m. thus, once these two projects confirm the construction, the total space of under-construction office buildings in 2014 will be 497,742 sq m, the highest annual supply for the last ten years. In 2015, six new office towers are projected to be built and will bring an annual supply of 353,901 sq m into the business district area. One of those towers is called International Financial Center 2 (IFC 2), located in the main Sudirman corridor which will add around 50,000 sq m of space. to date, IFC 2 is the only building projected to be completed in 2015 that has started construction. Meanwhile, three buildings have indicated their completion dates in 2015 including District 8, Ciputra World jakarta 2 and Office tower at St. regis. another two buildings which will probably become new supply in 2015 are Mangkuluhur and a tower at Sampoerna Strategic Square. apart from the list, World Capital tower, located in the primary ring of Mega kuningan also was introduced during the quarter. this tower is aimed at global financial landmark in jakarta.
Premium, 335,918 sq m
Grade B, 1,513,140 sq m
Grade a, 1,755,423 sq m
Colliers International Indonesia - research
colliers international |
p. 3
outside cbd
With the completion of Sovereign Plaza this quarter, the total operating office space during 2012 year-to-date is 122,896 sq m. this market is anticipating a further increase in the next three months of 110,660 sq m. From our survey, two office towers under construction, i.e. PHE tower in tB Simatupang and Eighty8 tower a within the kota kasablanka Complex, will likely be on schedule next quarter as they are now catching up with minor work to finish construction. Similarly, Blue Green Office Boutique at Puri kembangan, West jakarta is also in the finishing stages of construction. In the outside the CBD area, the office space for sale (strata-title offices) started to appear in 2007. In the last four years, demand for stratatitle offices has been relatively flat and supply grew accordingly. By the end of 2011, the stock of strata-title offices in the outside CBD area was at 244,399 sq m which represented 13% of the total office supply in the outside CBD. Significant growth was noticeable in 2012 when supply as of 3Q 2012 was registered at 86,790 sq m; it will grow further by another 56,000 sq m as Eighty8 at kota kasablanka is scheduled to officially begin operations in the next quarter.
During 2013 - 2015 it is projected that there will be 488,045 sq m of new office space in the outside CBD area. this is only based on buildings under construction scheduled for that period. Of the total space mentioned above, 51% will be supplied by the tB Simatupang sub-market. apart from this, other buildings have also announced their completion dates for that period but have not started construction activities yet. this includes 227,793 sq m of office space and should this figure be confirmed, the total office supply over the next three years will grow significantly to 715,838 sq m. there are a total of 26 office buildings (including the under-construction buildings and buildings announced but not under construction), and the average size per building is around 27,500 sq m, smaller than that of future buildings (in the same period) in the CBD which have an average size of 59,400 sq m.
all five buildings scheduled for completion in 2013 are in the under-construction stage, totalling 110,781 sq m. Similarly to the CBD, a substantial amount of office space will be available in 2014 when 319,264 sq m will be available. there will be an additional 93,978 sq m from the projects being announced for completion in 2014 but which have not yet started construction. two projects which will contribute around 58,000 sq m and are scheduled for 2015 are under construction. this includes office towers in Puri Indah West jakarta, Puri Indah Financial tower and St Moritz Office tower. the remaining projects being announced for completion in 2015 but which have not commenced construction include four buildings totalling 133,815 sq m.
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| colliers international
For Lease
*) U/C: Under Construction U/P: Under Planning
For Sale
colliers international |
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building name
location
sga (sQ m)
marketing scheme
deVelopment status*
cbd area
4Q 2012 4Q 2012 4Q 2012 4Q 2012 4Q 2012 4Q 2012 4Q 2012 2Q 2013 1Q 2014 2Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 4Q 2014 2Q 2015 2Q 2015 4Q 2015 !Q 2015 4Q 2015 4Q 2015 1Q 2016 1Q 2016 1Q 2016 1Q 2016 1Q 2016 2Q 2016 DBS tower 18 Park tower a 18 Park tower B 18 Park tower C 18 Park tower E tower One at the City Center Perkantoran Setiabudi Menara Prima 2 Life tower Gran rubina tower 1 Chase tower Sahid Sudirman Center rasuna tower Wisma Mulia 2 the Noble House tower two at the City Center International Financial Center 2 Ciputra World jakarta 2 District 8 Office tower at St regis Mangkuluhur tower B tower 1 at Sampoerna Strategic Square Graha Surya Internusa 2 tower three at the City Center Menara Palma 2 Gran rubina tower 2 World Capital tower tower 2 at Sampoerna Strategic Square Satrio Sudirman Sudirman Sudirman Sudirman kH Mas Mansyur Setiabudi Mega kuningan rasuna Said rasuna Said Sudirman Sudirman rasuna Said Gatot Subroto Mega kuningan kH Mas Mansyur Sudirman Satrio Sudirman Gatot Subroto Gatot Subroto Sudirman rasuna Said kH Mas Mansyur rasuna Said rasuna Said Mega kuningan Sudirman 64,000 For Lease and For Strata-title 4,814 For Lease 4,814 For Lease 4,814 For Lease 4,814 For Lease 84,000 For Lease and For Strata-title 11,000 For Lease and For Strata-title 40,000 For Lease 30,500 For Lease 31,438 For Strata-title 75,000 For Lease 126,600 For Strata-title 80,000 For Lease 70,000 For Lease 45,000 For Lease and For Strata-title 39,204 For Strata-title 50,000 For Lease 60,000 For Lease and For Strata-title 71,545 For Strata-title 90,000 For Strata-title 39,356 For Lease 43,000 For Strata-title 40,000 For Lease 34,000 For Lease 50,000 For Lease 70,000 For Lease 90,000 For Strata-title 118,000 For Lease Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction In Planning In Planning Under Construction In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning In Planning
3Q 2014 4Q 2014
1Q 2015 1Q 2015 1Q 2015
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| colliers international
building name
sga (sQ m)
marketing scheme
deVelopment status*
tb simatupang
4Q 2012 4Q 2012 2Q 2013 2Q 2013 4Q 2013 1Q 2014 1Q 2014 1Q 2014 1Q 2014 2Q 2014 2Q 2014 4Q 2014 4Q 2014 2Q 2015 4Q 2015 1Q 2015 1Q 2016 1Q 2016 1Q 2016 PHE tower trihamas Syariah Building alamanda tower Oleos 2 Green kosmo Mansion (GkM) tower the Manhattan Square Beltway Office Park tower 3 Gedung aneka tambang tower 2 aD Premier 18 Office Park (Cityland tower) talavera Suite Plaza Oleos South Quarter tower 1 South Quarter tower 2 the Manhattan Square tower 2 Signum North tower Signum South tower South Quarter tower 3 the Manhattan square tower 3 28,000 For Lease 6,160 For Lease 33,000 For Lease and For Strata-title 4,181 For Lease 23,000 For Strata-title 39,375 For Lease and For Strata-title 9,600 For Lease 16,000 For Lease 18,900 For Lease 40,000 For Strata-title 17,172 For Lease 39,778 For Lease and For Strata-title 40,778 For Lease 40,778 For Lease 33,440 For Lease and For Strata-title 18,000 For Lease 54,000 For Lease 40,778 For Strata-title 39,375 For Lease and For Strata-title Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction In Planning In Planning In Planning In Planning In Planning In Planning In Planning
*) Under Construction: where construction activity is in progress, including either foundation or superstructure. Under Planning: no contruction activities on site but all permits have been approved by the Government.
Demand
cbd
Leasing activity remained stable during the reviewed quarter. a number of mid-size companies who were considering consolidation and looking for more cost-effective solutions prefer expansion. During 3Q 2012, some office towers located along jalan Gatot Subroto reported leasing transactions completed by their existing tenants, i.e. mining consultants and information technology. Meanwhile, various financial services firms such as insurance, banking and trading continued to be active occupiers in the jalan Sudirman corridor. a medium size deal of around 1,200 sq m was recorded when a financial services company officially took space at an office tower located around jalan Satrio. Several major leasing deals were concluded in 3Q 2012 involving transactions of above 5,000 sq m. We have listed a number of major deals but these have not affected the occupancy figures because moving activities have not started in the period. One major transaction of above 5,000 sq m was between a tV production house and the East in the Mega kuningan area. two transactions with similar sizes of around 1,200 sq m each occurred in two different buildings, i.e. a trading company took space at Menara Mulia and a financing company at a building situated in the rasuna Said-Satrio area. Other smaller transactions of below 1,000 sq m that we have noted during the quarter were from a regional bank in South kalimantan, government, telecommunications, mining and cosmetics, etc.
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Not all of the story is about space absorption and there were several situations where tenants had to move out of the premises. a financial services company moved out of a building in Sudirman due to permit issues, leaving around 700 sq m of space vacant. Meanwhile, some business entities have also experienced declining performance coupled with increasing occupancy costs which caused them to vacate
their premises. another vacancy situation occurred when tenants had to relocate to other premises, as was experienced by a local bank located in jalan rasuna Said. Despite all of that, the market has created a balance in supply and demand. Occupancy in the CBD only rose modestly compared to the previous quarter, standing at 96%.
sq m
200,000 150,000 100,000 50,000 0 2012F 2013F 2014F 2015F 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
net annual take-up in the outside cbd during 2000 - 2015 (projected)
400,000 350,000 300,000 250,000
sq m
200,000 150,000 100,000 50,000 0 2012F 2014F 2000 2002 2004 2006 2008 2015F 2013F 2001 2005 2009 2003 2010 2007 2011
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| colliers international
pre-committed demand
Overall pre-committed demand for office buildings in the pipeline remained subdued and only a few transactions were observed during this quarter. Nevertheless, the new commitments occurring during the quarter have brought the available new office space during 2012 - 2013 to only around 102,169 sq m representing 24% of the total supply during that period. as mentioned earlier, 2014 will be a challenging year for the office market in the CBD where a large amount of office space will pour onto the market. However, given the positive outlook for the Indonesian economy from Goldman Sachs and Mckinsey & Company that Indonesia will become one of the largest emerging markets, the prospects for the country look good. In our analysis, we found a strong correlation between the historical growth of Indonesias GDP value and the growth in office absorption. Given the GDP projected by the government over the next three years, we estimate that office absorption in 2013 - 2014 will stabilise at the same level as our projections for 2012. Furthermore, 2013 will see a limited amount of new office space which will help new space becoming available in 2014 to perform better. Meanwhile, the level of tenants committed to office space from 2012 to 2014 registered a moderate increase this quarter in the outside the CBD area. Besides the adjustment made for upcoming office projects, an increased commitment level for future office space was experienced particularly by buildings located in the tB Simatupang area including the Manhattan Square, Beltway Office tower 3, Gedung aneka tambang 2 and Plaza Oleos. this is expected to motivate more tenants to opt for that location and this should maintain the occupancy rate at a healthy level.
increase ranged from US$3.00 to 5.00 per sq m per month while for buildings with low vacancy, the increase could reach as high as US$10.00. as of September this year, average rental rates in both US dollars and rupiah has gone up by 18 and 38% YoY. Based on grade, currently, office buildings which are categorised as Grade a and Premium charged rental rates in the range of US$30.00 to 55.00/sq m/month which reflects an upward adjustment mainly due to the entrance of WtC II, which is in this class.
rp
US$
Colliers International Indonesia - research
colliers international |
p. 9
$40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Grade C
serVice charge
the service charges tariff was stable during the reviewed quarter. Within the CBD, the service charge was IDr56,274/sq m/month for rupiah denominated buildings and US$6.31/sq m/month for buildings with US dollar tariffs. a relative flat figure for services charges was shown by office buildings in the outside CBD. During 3Q 2012, the average service charge was recorded at IDr42,504/sq m/month and US$5.21/sq m/month. Nevertheless, the developers and building management have anticipated an increasing electrical tariff for next year. as of the date of the survey, there is no further confirmation of the percentage of increase, however, a number of developers have stated that they will adjust their service charges sometime next year.
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| colliers international
Strata-title offices started emerging in the tB Simatupang and surrounding areas with more recent developments like Menara 165 and Sovereign Plaza demonstrating high absorption rates. Next year, two office towers will become new supply including Green kosmo Mansion and alamanda tower which are in the construction stage. More and more strata-title buildings will continue to appear, particularly in 2014, when a number of strata-title spaces will
come from projects like Manhattan Square, Plaza Oleos and 18 Office Park. Prices keep moving upward particularly because new office projects under construction keep adjusting their offering prices in line with their sales performance. to date, the average price of strata-title offices in tB Simatupang was registered at IDr20.1 million/sq m.
CBD (IDr)
Outside (IDr)
CBD (USD)
Colliers International Indonesia - research
Outlook
With vacancy levels below 5% in the CBD, space available is very limited and therefore competition among tenants to win a preferred office location is high. tenants delaying their decisions will lose the opportunity to secure quality office space. this has been a common situation for several periods and will likely continue over the next year particularly when the number of upcoming office spaces in 2013 is very limited. With space limited and demand increasing, rental rates are expected to inevitably rise over the next period. Not only in the main business area, other sub-markets outside the CBD will also benefit from the booming office market, and certain tenants will opt for non-CBD locations due to traffic and more affordable rental rates. In a long-term perspective, Indonesia is expected to fully leverage todays positive economic trends and to offer businesses and investors a lucrative market opportunity. a global economic institution believes that Indonesia will become one of the emerging markets together with countries like South korea, turkey and Mexico. Should this momentum be maintained, sectors like property will enjoy growth because the growth in GDP strongly correlates with office absorption. thus, we estimate that annual office absorption for 2013 and 2014 would at least be staying at the same level as in 2011 and 2012.
colliers international |
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apartment sector
apartments For Strata-title Sale
Supply
For the last two quarters, the number of the quarterly supply has always been more than 4,000 units, but this quarter, the number of new apartment units completed was less, i.e. 3,417 units. Some upcoming apartment projects delayed their hand-over schedules to catch up with finishing work as was the case at the ambassade (tower a) and tamansari Semanggi (tower a), which have 234 and 600 units, respectively. New supply for the quarter came from seven projects: the Wave (Coral tower), list of completed project in 3Q 2012 Denpasar residence (Ubud tower), One Park residence, City Garden residence, Puri Park View (tower B), Gading Nias residence (Grand Emerald) and regatta (rio de janeiro tower). all of these projects boosted the cumulative supply of strata-title apartments to 111,361 units. From a total projected 22,267 units which will be completed in 2012, more than 60% or 13,858 units have been completed by the end of September 2012.
apartment name the Wave (Coral tower) Denpasar residence (Ubud tower) One Park residences (3 towers) City Garden residence Puri Park View (tower B) Gading Nias residence (Grand Emerald) regatta (rio de janeiro tower)
location rasuna Said Satrio Gandaria Cengkareng Pesanggrahan Pegangsaan Dua Pantai Mutiara
region CBD CBD South jakarta West jakarta West jakarta North jakarta North jakarta
asking price (idr/sQ m) 23 mio 25 mio 24 mio 7 mio 8 mio 8 mio 22 mio
all brisk economic indicators and a stable political outlook were two of the factors motivating developers to continue with development plans. Several apartment projects were launched including the Oakwood Sky Garden, Callia apartment, Pluit Seaview (Ibiza tower), Nine residence and Satu 8 residence. the Oakwood Sky Garden, Callia apartment and Pluit Seaview are located in North jakarta and are extensions of existing projects. Nine residence and Satu 8 residence are completely new projects, located in South jakarta and West jakarta, respectively. Over the next two to three years, West jakarta and North jakarta will see abundant new completion projects, typically with massive
units and targeting the middle-low income segment. Massive projects are basically offering small units in order to make prices affordable for this demographic. the units of these apartment buildings typically range from 20 sq m for studio apartments to 70 sq m for a threebedroom apartment. If all of the upcoming under-construction projects are delivered as scheduled, there will be an additional 8,625 units in the last quarter of 2012; most of them are in the finishing stages. this figure suggests that the annual supply of jakartas apartment market in 2012 would be 22,483 units, 41% higher than the supply in 2011.
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| colliers international
apartment name the Oakwood Sky Garden Callia apartment Pluit Seaview (tower Ibiza) Nine residence Satu 8 residence
region North jakarta North jakarta North jakarta South jakarta West jakarta
the CBD area will continue to see more new apartment developments provided that there is enough land to be developed. the location of the CBD is the most attractive for apartments particularly when traffic is such a problem. In fact, land availability is scarce in this location and accordingly has triggered a significant
escalation of land prices. therefore, only upperclass apartment projects are economically feasible for the CBD area. For other classes of apartments, other locations will be chosen particularly when there is proximity to easily accessed public facilities, such as transport, malls, schools / universities and workplaces.
CBD 22.71%
CBD 18.95%
referring to the graph above, the trend of apartment locations has been changing from the CBD to outside the CBD area for the last two years. the greatest proportion of increase in jakartas apartment market is in South jakarta followed by the West jakarta area. West jakarta is developing mainly because of a growing middle-class and growing commercial area, while South jakarta has been the preferred location for most expatriates, offering good ambience for residences. Better infrastructure and accessibility to the downtown were among the considerations in choosing these locations.
Looking at future development, there are fourtyone projects of strata-title apartments, totalling approximately 26,193 units, scheduled for completion between 2013 and 2014. the largest supply, based on the number of projects, remains in the South jakarta area with 37% of the total projects, followed by West jakarta with followed by West jakarta and North jakarta with 17%. But, by the number of units, North jakarta will contribute 32.6% of total supply, followed by South jakarta and West jakarta with 22.6 and 13.5%, respectively.
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apartment name 2013 Belmont residence (tower Montblanc) Westmark apartment kebagusan City (tower B) GP Plaza Pasar Baru Mansion (2 towers) Sunter Icon kemang Village (the tiffany) kemang Village (the Infinity) the South of Essence Dharmawangsa residence at Dharmawangsa Green Central tower Cerberra St. Moritz (New royal Suite) Sentra timur residence tahap II Green Bay Pluit Green Lake Sunter dGreen Pramuka (tower Faggio) dGreen Pramuka (tower Pino) the Windsor (tower a and B) Pakubuwono terrace (tower I) the H residence 2014 the Pakubuwono Signature Sudirman Suites the Grove Suites La Venue - South tower Metro Park residence kemang Village (the Metropolitan) kemang Village (the Intercontinental) the aspen at admiralty Pakubuwono terrace (tower II) Casablanca East residence (tower Dallas) Sherwood apartment (2 towers) Pluit Seaview (tower Maldives) Sky terrace Lagoon La City apartment (tower a) Setiabudi Sky Garden (tower 1) La Maison Barito (tower 1) Botanica apartment (3 towers) the Hive @tamansari Signature Park Grande tifolia apartment
location Meruya Ilir tanjung Duren kebagusan Gatot Subroto Pintu air Sunter Pangeran antasari Pangeran antasari Dharmawangsa Dharmawangsa Gajah Mada Puri Indah Cakung Pluit Sunter jend. a. Yani jend. a. Yani Puri Indah Pakubuwono Mt Haryono
area West jakarta West jakarta South jakarta CBD Central jakarta North jakarta South jakarta South jakarta South jakarta South jakarta West jakarta West jakarta East jakarta North jakarta North jakarta Central jakarta Central jakarta West jakarta South jakarta East jakarta
#unit 350 550 588 320 520 600 240 175 244 89 420 150 1,000 3,200 2,400 1,400 1,500 340 750 505
Pakubuwono Sudirman rasuna Said Pancoran kebon jeruk Pangeran antasari Pangeran antasari Fatmawati Pakubuwono Pahlawan revolusi kelapa Gading kelapa Gading Pluit Lenteng agung rasuna Said Barito Simprug DI. Panjaitan Mt Haryono Perintis kemerdekaan
South jakarta CBD CBD South jakarta West jakarta South jakarta South jakarta South jakarta South jakarta East jakarta North jakarta North jakarta West jakarta South jakarta CBD South jakarta South jakarta East jakarta East jakarta North jakarta
188 414 416 341 1,200 150 400 860 720 188 200 940 525 456 426 80 626 422 1,100 500
Colliers International Indonesia - research
p. 14
| colliers international
Pikko Group 8%
in 2012
Others 16% agung abadi 2% agung Podomoro 29%
Wika realty 4% Pakkodian 2% Lippo karawaci 6% Intiland 8% Hutama karya realtindo Gapura Prima 2% 2% Farpoint realty 4%
agung Sedayu 4% Bakrieland Bahama Development Ciputra 6% Duta regency Development 8% 2% 2% asia Graha 2%
in 2013
Senopati aryani titanium Property Prima 5% Springhill Golf 3% 5% Selaras Mitra Sejati 3% Prakarsa Semesta alam 3% Lippo karawaci 8% Hutama karya 3% Gapura Prima 8% Duta Paramindo 5% Others 10%
antilope Maju Indah 5% Bakrieland 8% Bina Puri Lestari 3% Bumi Perkasa Permai 5%
Colliers International Indonesia - research
colliers international |
p. 15
Demand
During this quarter, the overall absorption rate of apartments inched up to 81.3% from 79.9% in the previous quarter. this take-up figure represents the performance of existing apartment units and future apartment units which are already offered to the market. Unlike in the previous year, the Islamic holiday during this quarter has less of an impact on the sales performance. During the period some intensive exhibitions were held, advertisements were vigorous and buyer get buyer incentives whereby buyers referring another buyer will get a 2.5% discount price were quite common. We have noted some apartment projects whose sales increased during the fasting month mainly due to the concepts they offer, location and pricing strategy. Other marketing approaches to boost sales during the relatively quiet months like ramadhan (fasting month) are giving a discount of 10%, longer cash instalments and special promotional gimmicks for that particular month. the take-up rates in different submarkets vary while the CBD achieved the highest at 88% this quarter while the other favourite location, South jakarta, was at 81% and other areas outside the CBD and South jakarta non-CBD area reached 80%. Exhibitions, advertisements and attractive marketing promotions such as big discounts, buyer get buyer programmes and longer instalments (special for ramadan) being driving factors for accelerating sales.
q-o-q
q-o-q
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| colliers international
2012
2013
2014
5,000
10,000 Supply
15,000 absorbed
20,000
25,000
Price
the average asking price of jakartas apartments witnessed a smoothly inclining trend this quarter. the upward adjustment in price is largely driven by the sales performance of the under-construction projects. another factor which triggered the price rise is the higher prices at the newly-launched projects which provide higher specifications like quality materials, more greenery, etc.
3Q2012
South jakarta
Non CBD
as depicted in the graph, asking prices for apartments in the CBD area recorded the highest increase followed by South jakarta and other areas outside South jakarta and the CBD. With a limited number of projects being launched and limited stock of available units, as well as consistent progress of construction activity, the CBD area managed to maintain a higher price increase than the others. On the other hand, the increase in prices in the South jakarta area was mainly triggered by the influx of several good projects launched at premium locations, such as Senopati, Permata Hijau, Pondok Indah, Simprug and Gandaria. Meanwhile, apartment prices in the non-CBD
area were maintained at relatively the same level. Overall, the average asking price of apartments in jakarta increased very modestly by 0.7% QoQ to IDr19.12 million/sq m for the whole area and all classes of apartment. the average price of apartments in the CBD increased by 4.7% compared to the previous quarter to IDr28.80 million/sq m, while South jakarta area saw IDr19.44 million/sq m, increasing by 3.1% from the previous quarter. the other areas maintained an average price of IDr15.23 million/sq m, or increased by only 1.2% compared to the previous quarter.
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| colliers international
Supply
the total cumulative supply for both serviced and non-serviced apartments in jakarta remained unchanged, since no new supply appeared during 3Q 2012. additional supply will be Plaza Senayan apartment, a nonserviced apartment consisting of two towers with 217 units which will be operating next month. the Plaza Senayan apartment towers C and D is yet to operate but efforts of preopening activity have taken place, like introductions to their existing tenants and seeking new tenants. With no supply being seen this quarter, the total number of apartments for lease (both serviced and non-serviced) in jakarta stood at 7,984 units.
CBD 42.60%
as seen in the graph, the majority of apartments for lease were concentrated in two regions, namely the CBD and South jakarta. these are favourite locations for expatriates and business travellers not only because of their accessibility to workplaces downtown or in the tB Simatupang area but because of proximity to other places of interest to expatriates. the existence of apartment projects in South jakarta helps complement the landed residential market for expatriates, particularly as an alternative when expat housing is not available.
In the future, we will see only a limited supply of apartments for lease. three projects are in the pipeline including Plaza Senayan which will be coming at the end of this year. two other projects are ascott kuningan, located in Satrio and Frasers residence in Menteng, Central jakarta. these projects are expected to be finished in 2013 and are already under construction.
apartment name
location
region
construction progress
#units
colliers international |
p. 19
Demand
the overall occupancy rate of apartments for lease in jakarta experienced a slight decrease particularly due to the decreasing trend in occupancy of serviced apartments. Quite a few short-term tenants postponed their arrival during the Islamic holiday season and some have ended their employment contracts, which generally were the key factors that led to the slowdown in occupancy. Overall, the occupancy rates of apartments for lease (serviced and non-serviced) declined mildly to 79.1% QoQ.
occupancY changes of apartment for lease occupancY Serviced Non-Serviced 2Q 2012 79.05% 80.60% 3Q 2012 78.54% 79.44% q-o-q 0.51% 1.16%
With the figures presented in the table, the number of vacant serviced apartments in
jakarta was 1,037 units, while there were only 614 vacant non-serviced apartments.
occupancY changes of serViced apartments based on region region CBD South jakarta
Non CBD
occupancY changes of non-serViced apartments based on region region CBD South jakarta
Non CBD
regular tenants for apartments for lease were still mainly asian expatriates, such as Chinese, japanese and South koreans. From the industrial perspective, oil and gas, construction,
banking and financial sectors, manufacturing companies, and also embassies contributed the demand for apartments for lease in jakarta.
p. 20
| colliers international
rental rates
the rental rates for serviced and non-serviced apartments in jakarta were relatively stable. Minor adjustments occurred during the quarter mainly due to the weakening of the rupiah against the US dollar. During 3Q 2012, the CBD area led the market with average asking rental rates of US$ 23.72 / sq m / month, moderately down by less than 1% compared to the previous quarter, while the outside area including South jakarta, registered an asking rental rate of US$14.74 / sq m / month. Basically, rental prices remained unchanged. a minor adjustment occurred mainly because some old projects are still charging rent in rupiah and to give the overall market condition, the denomination is converted to US dollars which caused a minor volatility in rental tariffs.
aVerage rental rates of apartment for lease region CBD Non CBD 2Q 2012 $23.87 $14.89 3Q 2012 $23.72 $14.74 Q-o-Q 0.63% 1.01%
Non CBD
Colliers International Indonesia - research
CBD
Non CBD
Colliers International Indonesia - research
colliers international |
p. 21
Outlook
the central bank issued new rules requiring down payments for new home and vehicle loans to avoid a property bubble and minimise credit risks. the minimum down payment is 30% for mortgage loans coming into force in the early part of 3Q 2012. For the apartment sector it will be less significant to the growth of demand. First, because only a few apartment buyers are using mortgages (around 10 to 15%), while the majority are using cash instalments paid during the construction period, or hard cash. Secondly, some developers are anticipating this regulation by allowing buyers to pay the 30% down payment over a six-month period. In general, the apartment market continued to demonstrate strengthening performance. Developers remain confident on the back of positive buyer sentiment, reflected by increasing sales growth and steady increases in asking prices. New projects in the pipeline are seemingly adhering to their completion schedules to maintain buyer confidence and to take advantage of the momentum of a bullish market.
p. 22
| colliers international
retail Sector
Supply
jakarta
the third quarter saw additional retail space from the completion of a huge retail centre called kota kasablanka which provides around 100,000 sq m of retail space. thereafter, as of the end of September 2012, a retail centre located within a mixed-use commercial complex in kemang has also contributed new supply. Originally, the mall was known as Exion Mall at kemang Village, but close to the grand opening, the developer chose a new name and officially called it Lippo Mall kemang. this new mall brought the total retail space in jakarta to 4.19 million sq m. as of 3Q 2012, the total annual supply year-todate was 164,981 sq m and the market is expecting to see around 87,100 sq m of additional supply by the end of this year. From the field survey, the construction progress of upcoming retail centres is likely to meet the expected completion schedule. One of them is a large-scale mall within the Ciputra World jakarta commercial compound which was introduced as Lotte Shopping avenue. another upcoming project is Pondok Indah Street gallery
jakarta retail cumulatiVe supplY
5,000,000 4,000,000
which is speeding up construction to open soon. With the completion of these two projects, the jakarta retail market will see the total supply of retail space reach 4.3 million sq m by the end of 2012. the retail supply in jakarta is expected to continue growing. It is projected that there will be around 220,000 sq m of new additional retail space in 2013. In the following year, Bakrieland Development plans to build a lifestyle mall in Sentra timur, East jakarta together with the expected completion of PIk Mall. after experiencing significant growth in supply from 2002 to 2009, there have been a limited number of developers building strata-title retail centres. One of the reasons is the low performance of many strata-title retail centres. Of the total 4.19 million sq m of prevailing retail space in jakarta, around 69% is retail space for lease at malls. It was also seen that all of the existing and upcoming malls to open during 2012 to 2014 will be offered for lease.
sq m
3,000,000 2,000,000 1,000,000 0 2011 2000 2002 2004 2006 2008 2001 2005 2009 2003 2010 2012 2013 2007 2014
Existing Supply
annual Supply
Under Construction
Under Planning
Colliers International Indonesia - research
colliers international |
p. 23
shopping centres name 2012 Lotte Shopping avenue Pondok Indah Mall Street Gallery 2013 Cipinang Indah Mall Pulomas XVenture the Baywalk Mall St. Moritz Mall 2014 Sentra timur Walk PIk Mall 2015 Podomoro City Expansion Shopping Mall at Pancoran Slipi Satrio
location
region
nla (sQ m)
deVelopment status
Pondok Indah
20,000 Under Construction 25,200 Under Construction 52,000 Under Construction 129,200 Under Construction
Pancoran
bodetabek
In the BoDetaBek area, after having no retail centres open in the previous quarter, Mall Bale kota in tangerang provided some new supply. Mall Bale kota, located in the main road of tangerang city, contributed around 25,000 sq m of retail space bringing the total to 1.96 million sq m as of 3Q 2012. In addition, the retail market is expecting a large mall development, i.e. a shopping mall at alam Sutera which is projected to open in the next quarter. afterwards, the supply is projected to grow from 2013 to 2014 when at least 11 retail centres will open. Nine of these are classified as new mall construction while the rest are the extension and renovation of existing malls. In 2013, besides the extension of Plaza Cibubur, five retail centres will bring around 168,285 sq m of additional new stock. these malls, which are under construction, are shopping centres between 20,000 and 50,000 sq m. By the end of 2013, strata-title retail space will comprise 36% of the total retail space in the BoDetaBek area, particularly after the completion of Bekasi junction. In 3Q 2012, four new projects were announced as future retail centres. Besides the second phase of Lippo Cikarang Citywalk, a small-scale retail centre which is in planning, the other three retail centres have broken ground and are expected be completed in 2014. these malls are the Breeze, Bintaro Xchange and Summarecon Mall Bekasi. In the meantime Urbana Cinere, which has been under construction since early 2012, is currently known as Cinere Bellevue Suites. the total annual supply projected in 2014 is 140,300 sq m and will bring the cumulative supply to 2.40 million sq m. apart from the development of new malls, existing malls are also expanding. a mall located around karawaci, tangerang is planning to add around 30,000 sq m of leasable space. as of 3Q 2012, the project is still in planning.
p. 24
| colliers international
Existing Supply
annual Supply
Under Construction
Under Planning
Colliers International Indonesia - research
shopping centres name 2012 Shopping Mall at alam Sutera 2013 Grand Galaxy City Mall Bekasi junction Grand Metropolitan Mall Cibinong City Mall Mall Ciputra Citra Gran Plaza Cibubur Extension 2014 Bintaro Xchange Lippo Cikarang Citywalk Phase II Summarecon Bekasi Phase 1 Cinere Belleuve Suite the Breeze Sinar Mas Land 2015 Bekasi trade Center 2 Mal Harapan Indah Bekasi Bekasi Bintaro Bekasi Bekasi
location
region
nla (sQ m)
deVelopment status
alam Sutera
tangerang
23,000 Under Construction 42,000 Under Construction 47,285 Under Construction 30,000 Under Construction 26,000 Under Construction 2,000 Under Construction
45,000 Under Construction 8,000 Under Planning 35,000 Under Construction 28,000 Under Construction 24,300 Under Construction
Bekasi Bekasi
colliers international |
p. 25
Demand
the occupancy rate during the quarter experienced a minor drop from 89.5 to 88.0%. In this quarter some shopping centres are consolidating and reviewing operations in order to enhance their performance. Some of the efforts being made include major refurbishment and a remix of tenancy composition although this may result in lower occupancy. One example is a mall located in the Pluit area which is preparing a new strategy in anticipation of a new budget hotel within the compound by inviting some branded restaurants like I-ta Suki, Crown Palace and Shanghai Sky as well as entertainment venues such as Inul Vizta karaoke. another negative factor is the closure of several gadget and computer shops in a shopping centre located in Lebak Bulus, South jakarta.
2010
2011
2012YtD
almost all segments of shopping centres experienced a minor drop in occupancy. Occupancy rates for middle- to upper-class malls moved downward slightly to 92.5% in this quarter, not because of slowing performance of prevailing malls but due to the influx of new malls which operate with a lower occupancy compared to the overall market. Likewise, the occupancy of middle-class retail centres was 86%, slightly lower than the previous figure. relatively stable performance of 83% was seen at middle- to low-class shopping centres. Nonetheless, in general, leasing activities were still active primarily in newly operating retail
centres. Large-scale shopping centres like Central Park Mall, Shopping Mall Gandaria, kuningan City and the latest, kota kasablanka and Lippo Mall kemang have secured more than 95% pre-commitment occupancy in 3Q 2012. kota kasablanka and Lippo Mall kemang have been around 75%, occupied by operating tenants but have been secured 95% precommitment occupancy. Currently Lippo Mall kemang has several major tenants like Debenhams, Hypermart, ace Hardware, Best Denki, Cinema XXI and Fitness First Platinum. Meanwhile, at kota kasablanka, Carrefour and Cinema XXI joined SOGO which opened previously when the mall was launched.
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| colliers international
Year of operation
status
2009 Central Park 2011 kuningan City 2012 kota kasablanka 2012 Lippo Mall 2012 Lotte Shopping avenue 2013 St. Moritz
Metro 14%
Debenhams 14%
Centro 7%
SOGO 20%
Matahari 45%
Giant 16%
Lotte Mart 9%
Hypermart 28%
Carrefour 47%
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p. 27
Despite the slowing performance of global hypermarkets in some European countries, the Indonesian retailers association forecasts that the hypermarket business in Indonesia will continue its upward trend since the Indonesian economy looks stable and resilient. In addition, the retail market in Indonesia is expected to maintain this growth because the purchasing power of the middle class is increasing. Slightly better performance was seen by retail centres in the Bodetabek area. recording a modest increase QoQ, the overall occupancy was able to reach 86.6% in 3Q 2012. retail centres recorded a mild increase in numbers of tenants mainly in tangerang, Depok and Bekasi. Overall occupancy in Depok was 87.2% reflecting slight growth over the quarter. the operation of Mall Bale kota in tangerang has
had less impact on the overall occupancy in this area where occupancy was stable at around 80%. Mall Bale kota operates with Hypermart and other smaller tenants which keep the overall occupancy in tangerang stable. another mall, located in tangerang, is Supermal karawaci which maintains its position as a middle- to upper-class mall and hence, some relocation activities are in progress to find a better tenancy composition. as part of the plan to extend the leasable area, the mall has contracted with Carrefour High End (selling upper-class merchandise) and toys r Us to occupy the space. In Bekasi, a similar trend also occurred as occupancy registered relatively steady growth and hovered at 79.3%. Likewise, occupancy in Bogor stabilised at 89.9%. the high occupancy for the overall retail market in Bogor was mainly due to limited supply.
2012YtD
location
region
retailers
jakarta
kota kasablanka Lippo Mall kasablanka kemang South jakarta South jakarta SOGO, ace Hardware, Cinema XXI, Electronic & Home Solution, Carrefour, Marks & Spencer Debenhams, marks & Spencer, Hypermart, ace Hardware, Fitness First Platinum, Cinema XXI, Best Denki, Chipmunks Playland and Cafe
bodetabek
Cimanggis Square Mall Balekota Cimanggis tangerang Depok tangerang Hypermart, Matahari, time Zone Hypermart, Electronic Solution, ace Hardware, Gramedia, Informa, Cinema XXI, Matahari, toys kingdom, amazone
Colliers International Indonesia - research
p. 28
| colliers international
future demand
an encouraging combination of factors for the growth of retail business occurred in Indonesia, including an expanding middle class, steadily growing economy and declining debt-to-GDP ratios which are expected to entice retailers to open in Indonesia. Mitra adi Perkasa, franchiser of global brands in Indonesia, brought new brands such as Desigual and Crabtree & Evelyn to aim at the middle-class demographic. jakarta is an urban, metropolitan area and not limited to the boundaries of the city but includes other cities in the surroundings which together comprise a total population of almost 28 million people. this huge potential continues to attract overseas retailers to come to this country. Meanwhile, according to a National Bank in Consumer Banking 2012 survey, around 42% of middle-class respondents spent for food and beverages. It is obvious that food and beverage . retailers and fashion retailers make up the majority of typical tenants in a shopping centre. Within the quarter, some new local brand restaurants were also opened, including tuan
pre-commitment leVel during 2012 - 2014 jakarta
absorbed Supply
rumah and tjap toean, as well as fashion retailers Bling (part of the Metrox Group). In the middle- to upper-class segment, Central retail Corporation (CrC), part of the thailandbased Central Group of Companies, recently announced the launch of its first branch of Central Department Store in Grand Indonesia Shopping town. the Central Department Store is planning to open a store which will take four floors or around 21,000 sq m and is scheduled to open in 2014. as part of their expansion plans in Indonesia, Central Department Store will open a store in the upcoming extended space of a shopping centre in West jakarta. Several other big overseas retailers are eyeing Indonesia closely as their next investment destination. Some have confirmed the commencement of operations in Indonesia in 2014 while others are still testing the waters before making a decision.
bodetabek
absorbed Supply
2014F
2014F
2013F
2013F
2012F
2012F
100,000
200,000
300,000
100,000
200,000
300,000
sq m
sq m
Colliers International Indonesia - research
colliers international |
p. 29
location
region
retailers
jakarta
Cipinang Indah Mall the Baywalk @Green Bay Pluit Cipinang Pluit East jakarta North jakarta Carrefour ace Hardware, Cinema XXI, Farmers Market, Electronic Solution, Bandar Djakarta, Informa, time Zone, toys kingdom, Burger king, Optik Seis, Pendopo, Bike Colony, Home Solution, White Hunter, Han Gang, Domino Pizza, roppan, Breadtalk, jCo Donuts, johnny andrean Salon, Baleno, Samuel & kevin, american Giant, Mattress, lady americana St . Moritz Puri Indah West jakarta Debenhams, Zara, Marks & Spencer, kidz Station, Starbucks, Burger king, Dominos Pizza, Matahari, Hypermart, Electronic City, Cinema XXI, ranch Market, Sea World Indonesia, tony romas, kiyadon Sushi, the Coffee Bean and j.Co, Parkson Pantai Indah kapuk Mall Pantai Indah kapuk North jakarta ace Hardware, Best Denki, Gold Gym, Food Hall
bodetabek
Bekasi junction Grand Metropolitan Mall Mal Ciputra Citra Gran Bintaro Xchange Bekasi Bekasi Bekasi Bintaro Bekasi Bekasi Bekasi tangerang Lotte Mart Centro, Farmers Market, toys kingdom, FunWorld, Sate khas Senayan, Optik Melawai Matahari, Hypermart, Gramedia, Starbucks, Bengawan Solo Farmers Market, Best Denki, rockStar Gym, Frigo Ice Skating
Colliers International Indonesia - research
2011
2012YtD
Middle Upper
p. 30
| colliers international
the trend of rental rates in jakarta and the greater jakarta (jabodetabek) area remained stable as of 3Q 2012 compared to the previous quarter (QoQ). there are no shopping centres in jakarta reporting price adjustments during the quarter; however the overall adjustment was mainly due to an influx of new malls whose rental rates are above the market average. the rental rate was 6.3% higher than the previous quarter which brought the average asking rental rates for typical retail floor space to IDr437,085/ sq m/month. apart from that, the average asking rental rates in this report are quoted in rupiah and therefore for several upper-class shopping malls using US dollars the value should be converted to the prevailing exchange rate which is higher than in the previous quarter. If we refer to the rental rates graph, the figure in September 2012 is 15.3% higher than the figure at the end of 2011. the adjustment occurring in 2012 year-to-date is mainly driven by three factors. First is the rent adjustment
made by newly-launched projects. rental rates in the initial stage have been changing in accordance with the increasing occupancy performance, Second is the renovation and new tenancy composition made by relatively old shopping centres in order to charge higher occupancy cost. third is the pegged rate adjustment and exchange rates (the weakening of the rupiah against the US dollar) which impacted the retail centres quoting US dollar rents. rental rates for upper-class malls have gone up steeply compared to other segments mainly because of the first factor mentioned above. Currently the rental rates for middle- to upperclass retail space was between IDr600,000 and 1,200,000/sq m/month. Meanwhile, the middle-class retail space was offered at around IDr340,000/sq m/month while the middle- to low-class space was offered at IDr230,000/sq m/month.
aVerage asking rental rates in jakarta and bodetabek area based on class
IDr 800,000 IDr 700,000 IDr 600,000 IDr 500,000 IDr 400,000 IDr 300,000 IDr 200,000 IDr 100,000 IDr 0 2005 2006 2007 2008 Middle 2009 2010 Middle Low
Colliers International Indonesia - research
2011
2012YtD
Middle Upper
In the greater jakarta area (Bodetabek), rental rates were seen to remain stable at IDr251,995/ sq m/month. a mall located in tangerang is
serVice charge
there was no difference in the service charges during the quarter. the maintenance tariff hovered at IDr80,987/sq m/month in jakarta while in the BoDetaBek area service charges are on the average of IDr60,561/sq m/month. In 2013, it is expected that there will be some malls increasing their maintenance costs in anticipation of the governments plan to increase electricity tariffs next year.
colliers international |
p. 31
Outlook
While European countries faced economic turmoil, developing countries like Indonesia forged ahead. With improving consumer confidence and increasing spending, global retailers continued their expansion into this market. For the past few years, overseas retailers like Carrefour, Lotte, Sogo and other smaller retailers like 7-Eleven and Circle-k saw their businesses expanding in this market. the moratorium on the construction of shopping malls and commercial centres bigger than 5,000 sq m will remain in effect until the end of 2012. the under-construction shopping centres had mostly been granted permits before the moratorium was issued. Nevertheless, exceptions will be given for new malls in the jl. Dr. Satrio area, South jakarta and East jakarta. With a limited number of projects over the next two years, the moratorium will have a positive impact by maintaining the balance between supply and demand and it will also give mall operators time to evaluate their strategies. Currently, shopping centres are more concerned with enhancing their asset value by doing refurbishments or creating a more interesting tenancy mix to justify new rental rates.
p. 32
| colliers international
Supply
Up to 3Q 2012, land availability remained the major issue for the industrial market. During the quarter, none of the expansion plans of operating industrial estates were readily available for the construction of industrial buildings. almost all industrial estates with expansion plans reported that new land would only be available during 2013. In the Bekasi area, two prominent industrial estates are speeding up the construction progress for the land expansion. One industrial estate is now focusing on developing around 150 hectares (gross) of land, where half of this is projected to be available in the middle of 2013, while the remainder will only be ready for industrial building construction in late 2013 or mid-2014. another potential industrial plot to be developed occupies around 29 hectares (gross) in one active estate in Bekasi, which is projected to be ready in mid-2013. One industrial estate in Bekasi is also rushing for the preparation of new industrial land as part of their commitment to pre-committed buyers. In other industrial estates in the same area, the next phase of expansion is also being prepared, but this is also probably going to be ready sometime in 2013. Overall, the industrial land stock as of 3Q 2012 remained unchanged and will likely increase in 2013.
Serang 21%
jakarta 10%
karawang 36%
tangerang 5%
Colliers International Indonesia - research
Demand
total industrial land absorption decreased significantly compared to the previous quarter, accounting for only 30% compared to figures seen in 2Q 2012. However, the total transactions occurring this quarter were not only coming from the real transaction of 53 hectares but also from the pre-committed transactions over the land under preparation, which will be handed over sometime next year when it is ready to be developed. the total pre-committed transaction that occurred this quarter were for 109.2 hectares and, therefore, the total industrial land being transacted during 3Q 2012 was 162.37 hectares. this is slightly lower than total transactions completed in the previous quarter. Pre-committed transactions are now becoming quite popular amidst land scarcity and mostly occur between land owners and existing tenants, particularly when they trust each other. Of most pre-committed transactions during the quarter, a significant number were carried out by existing tenants in need of business expansion. Land plots are reserved before they are ready (after cut and fill works, placing roads and other infrastructure), paid at the current market price and handed over to buyers after the land is ready for development.
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p. 33
Of the 53 hectares of real transactions in 3Q 2012, the highest land transaction was done by Delta Silicon with a total of 25 hectares of land sold. this includes the sale of around 12 hectares to F&B tenants (which plan to expand their operations), six hectares of automotive company transactions and miscellaneous other transaction to other industrialists including developers who build standard warehouse buildings for sale or for lease. the Delta Silicon has been recording consistent sales due to the availability of land. Modern Cikande in Serang sold in the second rank but registered much lower sales than Delta Silicon. Of the total land sold, the biggest plot was concluded by a gypsum board manufacturer company out of France accounting for six hectares, while the other smaller transactions were completed by the building material industry and steel-related companies. total land sold during the quarter in Modern Cikande was 6.8 hectares. Similarly, in sales volume, Suryacipta in karawang recorded a total of 6.4 hectares comprising three transactions two automotive companies from japan (totalling more than 70% of total transactions) and a casting company from korea. New tenants made all of these of transactions. Meanwhile, kIIC in karawang sold two plots: one five-hectare plot to a chainrelated company from japan and another smaller plot (1,000 sq m) to an existing tenant undergoing expansion. these two transactions in kIIC are probably going to account for the last of the companys saleable industrial land before the launch of its next phase. Currently, kIIC is
annual industrial land sales
1400 1200 1000 hectares 800 600 400 200 0 2001 2005
focusing mainly on leasing transaction to maintain their remaining land assets for recurring income. Such measures are also applicable in some industrial estates. One estate in Serang is trying to prioritise leasing enquiries rather than sell land due to the limited available of land and their intention to hold on to remaining assets. kIEC, which is affiliated with the biggest state enterprise producing steel, continued to sell land to two steel-related companies (one is a local company and one is an australian-based company). this transaction involved five hectares of land. Meanwhile, jababeka reported registering a total of 2.45 hectares of land composed from relatively small transactions such as trading, food, pharmaceuticals, packaging, metal, automotive and chemical. Meanwhile, MM2100 sold the last land parcel they have (totalling around one hectare) to a data-storage and cool-storage company. MM2100 is now concentrating on developing more industrial land as part of its extension plans. On the leasing front, only kota Bukit Indah (Besland Pertiwi) is an active estate. along the quarter, one leasing transaction registered over 1.4 hectares of land for the expansion of existing japan-based automotives. In the first stage, around 3,000 sq m of building space was developed to fulfil the needs of this japanese client.
2009
2003
2010
2007
2011
p. 34
| colliers international
2012YtD
2000
2002
2004
2006
2008
pre-commitment sales
Several pre-commitment transactions were recorded during the quarter, although the handover process will be largely completed in 2013. amidst the land scarcity, tenants (mainly existing tenants) are competing to get new land for their expansion plans by paying in advance before the land is completely developed as ready-to-use industrial plots. this is now a common phenomenon in the industrial market in order to secure land for future business expansion and to peg prices at the current value. a good example is Greenland International Industrial Center, located in kota Delta Mas, Bekasi, where transactions materialised in advance of next years handover. this quarter, around 21.2 hectares of land were sold to five japan-based buyers in the automotive and logistics industries. Other pre-commitment sales also occurred in one industrial estate in Bekasi. While the location for ready-to-use industrial land was being prepared, around 43 hectares of land were sold to an automotive industry and warehouse operator. Meanwhile, another industrial estate in the same area also recorded 50 hectares worth of land transactions during the quarter to their existing tenants.
hectares
Colliers International Indonesia - research
colliers international |
p. 35
Steel-related 3.9% Pharmaceutical 1.0% Plastics 1.3% Food & Beverage 4.8%
Metal 0.4%
automotive 54.4%
In Bekasi, the q-o-q price has adjusted by IDr 50,000 to IDr100,000 for industrial estates quoting rupiah denominations, while those charging in US dollars asked for roughly US$10.00 more per sq m. Meanwhile, almost all active industrial estates in karawang charge in US dollars. During the quarter, karawang witnessed a US$10.00 per sq m price increase.
US$/sq m
p. 36
| colliers international
Nothing changed for service charge tariffs, but one industrial estate is anticipating an increase in 2013 to counterbalance the climbing
operational costs. Meanwhile, one industrial estate in Bekasi maintained the service charge tariff but increased the water tariff by 20%.
$0.06 $0.04 $0.02 $0.00 2006 Bogor 2007 2008 2009 karawang 2010 Bekasi 2011 Serang 2012YtD
$1.5 billion in annual revenue 979 billion square feet under management Over 12,500 professionals
colliers international indonesia: World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 fax 62 21 521 1411 Michael Broomell Managing Director World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 fax 62 21 521 1411 Ferry Salanto associate Director, research World trade Centre 10th & 14th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 fax 62 21 521 1411
Copyright 2012 Colliers International the information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
tangerang
Land Price (sq m) Highest US$ 157.80 US$ 151.80 US$ 160.00 US$ 252.50 US$ 105.20 average US$ 128.90 US$ 115.90 US$ 133.00 US$ 187.70 US$ 105.2
Maintenance Costs (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 US$ 0.03 Highest US$ 0.08 US$ 0.11 US$ 0.06 US$ 0.07 US$ 0.05 average US$ 0.07 US$ 0.06 US$ 0.06 US$ 0.06 US$ 0.04
US$ 100.00 US$ 80.00 US$ 105.20 US$ 152.50 US$ 105.20
Outlook
total sales during 2012 are expected to be lower than total sales volume in 2011. Up until 3Q 2012, total year-to-date sales represented only 34% of total sales in 2012. For the remaining three months in the year, it is not expected to catch up to last years performance. the brisk economy and continued enquiries for industrial land are not enough to underpin sales performance. the main problem lies in the shortage of land, which is not anticipated long before the boom in the industrial market. Year 2013 will be a one of supply, since several industrial estates are rushing for construction with the expectation to deliver next year. Nevertheless, most of the upcoming industrial land scheduled for next year is already reserved by pre-commitment sales, and only a few will be available for sale. thus, we still expect new industrial land to be difficult to find next year. therefore, we still anticipate escalating prices next year. For several years, the automotive industry has dominated as the major driver for industrial land absorption and will still continue to do so next year. Given the huge population and growing middle class, Indonesia will continue to be an appealing market for a variety of products. therefore, we still believe that the industrial buyer profile will remain the same.
accelerating success.
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