Colliers Market Report 2Q 2011

2Q 2011
jakarta rEaL EStatE markEt rEport
colliers international indonesia i the knowledge
Economic Indicators
indonesian economic indicator
2007 Economic Growth (% YoY) Inflation rate (%) Exchange rate (rp/US$) 6.30 6.59 9,124 8.00
2008 6.10 11.06 9,672 9.25
2009 4.50 2.78 10,326 6.50
2010 6.1 6.96 9.084 6.50
2011 6.51 1.062 8,7482 6.753
highlights
office sector
SBI rate (%)

Notes: 1 1Q 2011
Source: Statistics Indonesia, Finance Department, Bank Indonesia

2
january - june 2011
june 2011
Base rental rates in the CBD as of 2Q 2011 were recorded as the highest in the last 14 years for both US dollar and rupiah denominated buildings. During the quarter alone the CBD office market witnessed an increase in asking base rental rates of 6.0% q-o-q to rp109,738/sq m/month for rupiah denominated buildings and 8.7% q-o-q to US$19.30/sq m/month for US dollar denominated buildings. meanwhile several prime quality office buildings in the CBD have begun introducing new base rental rates of above US$30.00/sq m/month. the market witnessed a consistently strong demand for office which has exceeded new supply resulting in an occupancy rate which has increased to 92.8% and which is anticipated to increase further by year end. on the strata-title front, the excellent take-up rate of 97.0% has triggered price increases of 12% y-o-y to rp20.8 million/sq m in the CBD and a 13% increase y-o-y outside the CBD to rp16.6 million/sq m.
apartment sector
asking prices for all classes of apartments were relatively stable when compared to the previous quarter. meanwhile, cumulative take-up jumped from 72.1% in 1Q 2011 to 76.2% as a result of continued absorption of newly built apartments. During the quarter, three strata-title apartment projects i.e. kalibata regency, kemang Village residence and Seasons City (tower B) were completed bringing the cumulative supply of units to 90,844 units while the opening of 108 units in Fraser residence Sudirman apartments increased the total supply of apartments for lease to 8,058 units.
eXpatriates hoUsing and apartment sector

the expatriate housing market is anticipating an increase in rental rates due to the strengthening rupiah value against the US dollar. Landlords have started asking for higher rents because their expenses for repair, renovation and the operation of the house are paid in local currency while rental rates have typically been quoted in US dollars. During the first half of the year, a number of companies, particularly from FmCG (fast moving consumer goods) corporations have been expanding. this has been followed by an increasing number of expatriates being hired, fuelling the expat housing market.
retail sector
a massive amount of shopping center space (Ciputra World jakarta mall, kuningan City Lifestyle & Entertainment Centre and mall at kota kasablanka) is now under construction in the CBD which will add 229,992 sq m and increase the supply by 53% before mid-year 2012 and which will push down the occupancy rates for premium shopping centers in the CBD which now stand at 96%. Lotte Department Store has recently committed to leasing 100% of the 65,000 sq m retail space at Ciputra World jakarta mall. However, Lotte will sublease almost 90% of this space to other retailers. New retail supply was only monitored in the greater area of jakarta with the operation of Living World alam Sutera providing around 70,000 sq m of retail space. retail occupancy levels in the city of jakarta in 2Q 2011 achieved 86.6% which is 2.3% higher than the previous quarter, while the retail occupancy surrounding the city of jakarta grew to 83.9%. Nevertheless, landlords are generally still cautious due to the increasing competition among shopping centers and they have largely decided to maintain asking rental rates at the current levels.
indUstrial estate sector

total land sales reached an historic high for the last eleven years with sales during the first half of 2011 having surpassed total sales for all of 2010. additionally, industrial land prices are now quoted at historic highs. Land sold up to 2Q 2011 was 566 Ha while total land sales for all of 2010 was 543 Ha. With this impressive take-up performance, developers have had the confidence to raise the asking land prices with a 11.2% in the 2Q 2011 alone or up by 17.6% compared to 2010. the automotive and consumer goods sectors are the key drivers to the absorption of industrial land.
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JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR
Office Sector
Jakarta sUpply conditions
after only providing less than 10,000 sq m last quarter, jakarta office supply surged ahead with an additional 135,599 sq m of office space supplied by two office towers in each the CBD and outside CBD area, where 62% of the space is located in the outside CBD area. For 2011, the outside CBD area will contribute more of the total annual office space with a number of small buildings projected to enter the market.
Jakarta office cUmUlative sUpply (sQ m)
6,000,000 5,000,000 4,000,000 sq m 3,000,000 2,000,000 1,000,000 0 2007 2008 2009 CBD 2010 2Q 2011 2011F 2012F 2013F
cbd area
after having no additional office space in the beginning of the year, two office buildings were operated during 2Q 2011. allianz tower located in rasuna Said added around 25,000 sq m has applied some green building principles into the building. the other building completed this quarter is k-Link tower located in Gatot Subroto. this building provides around 26,500 sq m of semi gross space developed by k-Link, an international network marketing group from malaysia. total new office space in the CBD area accounted for 51,500 sq m this quarter, bringing the cumulative supply to 4.31 million sq m, or 2% higher YoY. of this total office space in the CBD, around 84% is office space for lease. after having recorded positive supply growth, the influx of strata-title office buildings will be stagnant this year. all office buildings projected to enter the market in 2011 will be offered for lease. the peak of strata-title office supply and absorption occurred in the 2008 - 2010 period, and most of the new strata-title office buildings were absorbed by the market. Given such a promising outlook, a number of developers started constructing more strata-title buildings. With the buildings taking around 8 to 10 days construction for one floor plate with the mechanical, electrical and fit out works, this means that a number of new strata-title buildings will be completed in 2012 - 2013. there are two remaining buildings scheduled to be completed by 2011, i.e 18 park located in the Sudirman CBD (SCBD) and tempo Scan tower located in jalan (street) rasuna Said. physically, the 18 park, comprising of 5 mid-rise towers, is 90% completed and planned to operate in october this year. a 30-level building construction activity at tempo Scan tower is being hastened to meet the completion schedule, and cladding work almost covers the whole structure of the building.
p. 2 | colliers international
outside CBD
Colliers International Indonesia - research
cUmUlative sUpply within cbd area (sQ m)

6,000,000 5,000,000 sq m 4,000,000 3,000,000 2,000,000 1,000,000 0 2007 2008 2009 For Lease 2010 2Q 2011 2011F 2012F 2013F
For Strata-title Sale

annUal sUpply vs no of proJects within cbd area

500,000 400,000 Annual Supply (sq m) 300,000 200,000 100,000 0 2007 2008 2009 annual Supply 2010 2011 2012 2013 10 8 No. of Project 6 4 2 0
No. of project
Building construction at several buildings projected to be completed in 2012 is actively progressing, such as Ciputra World office tower, office 8, aXa tower, the City Centre, World trade Centre (WtC) 2 and Eighty8. the WtC 2 will be operated under the Green mark standard set out by Singapore Building Construction authority, which will be a benchmark for green buildings in jakarta. another building approaching its completion is
multivision tower, which will be operated early next year. additional office space will not necessarily come from new building. Exim melati in jalan mH thamrin, which is being renovated, is anticipated to be released next year and will add another 4 floors to the market. on the planning stage, two buildings are soon to be developed. menara prima 2 is planned to tail the success of its predecessor, menara prima.
So far, land checking activity has been conducted, signaling that construction will be started shortly. Likewise, within the same compound of the International Financial Centre (ex Barclays/BCa building) another office tower and parking building will be built.
oUtside cbd area

the outside CBD area features two new office buildings for the quarter, i.e. Central park office tower and menara Citicon. Central park is built within the commercial compound developed by agung podomoro and is one of the largest strata-title office towers in the outside CBD area, with a size of 64,099 sq m. Located in the same area of West jakarta, menara Citicon, a 20,000 sq m office tower, came on to the market in the middle of the second quarter. this building introduced vertical circulation by providing vehicle parking elevators. this new technology concept is not widely applied by many office buildings in jakarta. the operation of these two new buildings increased the cumulative office space to 1.85 million sq m in the outside CBD area. Supply in this area will keep growing during 2011, and is the historic high of annual supply in the last 10 years. the operation of these two new sophisticated office towers added to the outside cumulative space by 1,849 sq m. Including the projection list, the supply will keep growing up to the end of 2011. that would be the largest annual supply in the last 10 years, with 2.93% growth on average per annum. Strata-title office showed a slight growth. Compared with last quarter, in 2Q 2011, there was an increase of 2%. office property for strata-title sale during 2011 represents 72% of the total annual supply. there are a number of developers planning to build office towers under the strata-title scheme over the next two years. It is anticipated that in 2012 and 2013, annual office supply for stratatitle sale will represent 51% and 38% respectively. this describes the perspective of many developers, i.e. provided the market is good, they would prefer to market their buildings under the strata-title scheme.
cUmUlative sUpply within oUtside cbd area (sQ m)
2,500,000 2,000,000 sq m 1,500,000 1,000,000 500,000 0 2007 2008 2009 For Lease 2010 2Q 2011 2011F 2012F 2013F
For Strata-title Sale

annUal sUpply vs no of proJects within oUtside cbd area

300,000 250,000 Annual Supply (sq m) 200,000 150,000 100,000 50,000 0 2007 2008 2009 annual Supply 2010 2011 2012 2013 4 2 0 10 8 No. of Project 6
No. of project
Despite causing bad traffic during rush hour, jalan tB Simatupang, as the prominent office corridor after the CBD, remains the favourite office location. apart from the projection we have outlined, there are several projects under planning projects. other than in the tB Simatupang area, several under planning office projects will also be built in West and Central jakarta. Wisma akr in West jakarta is going to build a new tower, which will be integrated
within a mixed-use development including residential and retail areas. this 19-storey office building is expected to be started next year and will contribute around 22,800 sq m of office space for sale by mid-2013. Further, a 12-storey office building with a floor plate of around 700 sq m is planned to be developed in Central jakarta with one-third of the space owner occupied.
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| colliers international
sUpply proJection dUring 2011 - 2013
proJected completion year cbd area 2011 2012 18 park tempo Scan tower Ciputra office tower multivision tower office 8 menara prima 2 World trade Centre 2 aXa tower Eighty8 the City Center office at Setiabudi 2013 Chase tower Life tower mangkuluhur tower B International Financial Center 2 menara Selaras office tower @ex Wisma Benhil the City Centre (phase 2) the City Centre (phase 3) rifa 2 SCBD Hr rasuna Said Satrio Hr rasuna Said Senopati mega kuningan Sudirman Satrio Casablanca kH mas mansyur Setiabudi Sudirman Hr rasuna Said Gatot Subroto Sudirman Sudirman Sudirman kH mas mansyur kH mas mansyur Satrio For Lease For Lease For Lease For Lease Strata-title For Sale For Lease For Lease Strata-title For Sale Strata-title For Sale Strata-title For Sale Strata-title For Sale For Lease For Lease For Lease Strata-title For Sale For Lease Strata-title For Sale Strata-title For Sale For Lease Strata-title For Sale Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under planning Under planning Under plannning Under planning Under planning Under planning Under planning Under planning Under planning total = 854,836 sq m oUtside cbd 2011 menara 165 alstom tower menara Satu 2012 Wisma pondok Indah 3 Grand Soho Slipi Sovereign plaza Chitatex tower 2013 alamanda tower talavera Suite Graha Elnusa 2 the manhattan (tower 2) Cityland tower Naras tower Signum tower Graha kirana mandiri Green tebet tB Simatupang tB Simatupang kelapa Gading Sultan Iskandar muda Slipi tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang tB Simatupang mt Haryono For Lease For Lease Strata-title For Sale For Lease Strata-title For Sale Strata-title For Sale For Lease For Lease For Lease For Lease For Lease For Lease For Lease For Lease For Lease For Lease Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under planning Under planning Under planning Under planning Under planning Under planning Under planning Under planning Under planning total = 465,792 sq m
*) 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 fovernment. Colliers International Indonesia - research
bUilding name
location
marketing scheme
statUs*
p. 4
space absorption the cbd

the CBD area continued to capture resilient performance in terms of occupancy level, which stood at 92.8%, higher by 0.91% compared to the last quarters standing. Despite the influx of two new office towers with a high precommitment level, however, these two buildings also helped the overall occupancy performance. For example, allianz, a German-based insurance company, had signed more than 50% of available space in an office tower that was then renamed allianz tower. Similarly, k-Link tower was built for the base operation of this company and it has also captivated other tenants like a media company, so the building was well absorbed when it started operation. overall, the climb in occupancy was generally propelled by improving performance of the existing buildings, which reflects that the office market in the CBD is still good. kyoei prince in Sudirman made the most of vacant retail space by having a japan-based company in the steel business, a leasing firm and the film media industry as new office tenants. across from kyoei prince building is the ex Barclays building (now renamed the International Financial Center), which has added more tenants to its list of occupants, including an It company that has taken a large space. Further, the expansion of an existing telecommunications business tenant and the relocation of an insurance company have lifted the occupancy level of the building. In the same location, midplaza welcomed new tenants from the trading, oil and gas and textile sectors. meanwhile, mayapada tower registered a new law firm, insurance and It tenants. In the mega kuningan area, the East received two new tenants, a global tax and finance consultant that will occupy one whole floor and a mining company from India that took half a floor. one large relocation from a korean-based bank occurred in Gatot Subroto. the relocation took place in the same corridor, i.e. from Gedung mitra to Wisma mulia, and involved around 2,000 sq m of office space. the vacant space left by the bank will be occupied for the building owners own use. Despite reaching a mature occupancy level, the plaza office building in mH thamrin continued to be in high demand and concluded several significant transactions. a major
p. 5 | colliers international Jakarta historical occUpancy
100% 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% 2Q 2007 2Q 2008 2Q 2009 CBD 2Q 2010 1Q 2011 2Q 2011 3Q 2011F
outside CBD
international accounting and consulting firm has secured more than 5,300 sq m and a global It based in the US will occupy a space of more than 1,600 sq m. other transactions of below 1,000 sq m continued to flow to the building. In addition, an aged office building in this location has appealed to one law firm. Such tenants with limited budget will opt for older buildings that are located within the business commercial area. In rasuna Said, a japan-based company producing clinical laboratory testing devices took space in Cyber building. apart from the new absorption during the quarter, one building in Sudirman had to release prominent tenants to new buildings. Due to security concerns after a fire incident in the building, two tenants decided to move out. a US-based infant feeding, pharmaceuticals and parenteral nutrition producer resolved to move to the plaza, while a leading car manufacturer from Sweden will relocate its office to Sentral Senayan.
shoes and automotive industries acquired office space in a building located in jalan S. parman. another deal involving a japanese transportation consultant and a shipping company occupied space in Graha atrium in Central jakarta. at menara BtN, a timber and mining company entered as tenants. In Southern jakarta, a forwarding company continued to identify office space at small buildings. Likewise, two office towers located in tB Simatupang enjoyed growing tenant lists for their buildings. For example, a global rotating equipment repair services company is to operate at arcadia office park, while ratu prabu (tower one) will have some new tenants from the property, investment and media industry businesses. Newly operating office menara Citicon, besides facilitating office space for the owner of the building, has also captured some tenants from the oil & gas and trading sectors. office leasing activities relating to companies moving in or out of buildings always occur at the same time. a telecommunications industry tenant moved out of an office tower situated around pancoran and a broadcasting company left a building in the mampang area. Shophouses remain a general competitor for buildings located outside of the CBD. our records indicate that over the last two years, tenants with limited operational budget have preferred to occupy shophouses instead of office buildings. However, such tenants make a potential market for office buildings, because once they have established their business and
tenants acitivities in the oUtside cbd area

the occupancy level for office buildings in the outside CBD area saw a slight correction of more than 1% to 89.1% this quarter. relocation and movement activities have seemingly maintained a stable occupancy within the quarter. Several office buildings in the West jakarta area registered transactions during the quarter. Some new tenants from japan and korea in the
need higher exposure to attract clients or when they need more space to grow, they would consider occupying an office building. In many cases, quite a few office buildings in the outside CBD area received the overflow from such tenants.
space available and committed in 2011 - 2012 within cbd area
2012F
commitment level
another good indicator to measure office performance besides the upward trend in rental and occupancy is the commitment level of under construction buildings. of the total space available during 2011, around 60% has been absorbed by the market. this represents commitment coming largely from insurance, trading and security companies. meanwhile, of around 227,000 sq m of space available for lease during 2012, 30% has been commited while the buildings are still under construction. most of the commitment for buildings projected to be completed in 2012 is from insurance, bank and media companies. other than offices for lease, in 2012 there will be around 216,097 sq m of office space for strata-title sale, and 40% has been sold to insurance, law, oil & gas and finance related companies. In the outside CBD area, there will be a total of around 80,221 sq m of office space and so far, 20% of this has been committed. two buildings located in tB Simatupang have secured commitment from several tenants. alstom, a global energy solutions and transport company, has committed to alstom tower, which is the official building and is named after alstom. Likewise, the under construction menara 165 has secured a leading health care and pharmaceutical company.
2011F
40,000
80,000 absorbed
120,000
160,000
200,000
240,000
280,000
projected Supply
space available and committed in 2011 - 2012 within oUtside cbd area
2012F
2011F
10,000
20,000 absorbed
30,000
40,000
50,000
60,000
70,000
projected Supply
strata-title for sale

With continued absorption of strata-title office space, it is now quite challenging to find large space available, particularly within good quality office buildings. the overall take-up rate of around 97% makes it difficult to find sizeable space. the QoQ take-up represented around 2,500 sq m of absorption, while the YoY figure was around 14,700 sq m. During the reviewed quarter, it was recorded that a mining company acquired a sizeable space at an office tower in mega kuningan area, which represented 40% of the total space sold in 2Q 2011. With growing business, a mining company took a significant space in one office tower under construction in the Senopati area. this transaction occurred long before the building will operate in 2012.
absorption of Under constrUction of strata-title for sale office within cbd area
2012F
40,000
80,000
120,000
160,000
200,000
240,000
280,000
absorbed
projected Supply
p. 6
absorption of Under constrUction of strata-title for sale office within oUtside cbd area
2012F
two office towers in the area outside of the CBD also bolstered their performance. Gandaria 8 and mt Haryono Square made great strides with excellent performance. Likewise, Central park office, which is partially offered for sale, has secured tenants like a design consultant, a supplier, mining, agricultural and trading companies and an educational institution. most of these buyers also lease space within the business district area. For some periods, offices for sale in the outside CBD area continued to show increasing performance. In 1Q 2011, overall take-up achieved 64.2%, while entering the second quarter, take-up achieved 72.8%. We expect that strata-title performance will continue to grow, given that some of the strata-title buildings have been absorbed before they are effectively in operation.
2011F
10,000
20,000
30,000
40,000
50,000
60,000
70,000
absorbed
projected Supply
asking rental rates, service charge and prices landlords market

Given the prevailing demand conditions, landlords signalled they would raise rental rates. During 2Q 2011, several office buildings in Sudirman quoting rates in rupiah denomination had their asking rental rates increased. the increase, together with rates introduced by new buildings, adjusted the overall climb of rental in rupiah to rp109,738/ sq m/month, which represents growth of 6% QoQ. meanwhile, rental rates in US dollar denomination jumped 8.73% QoQ or 17.9% YoY to US$19.30/sq m/month. the increase was triggered by the adjustment made by six buildings located in Sudirman. albeit only a slight climb, the average asking rental rates in the outside of CBD registered a 3% adjustment QoQ due to the operation of new office buildings with higher rates than the
average asking rental rates of offices in Jakarta within cbd area

rp120,000 rp100,000 rp80,000 rp60,000 rp40,000 rp20,000 2Q 2011 1Q 2011 3Q 2011F 2008 2009 2007 2010 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 rp90,000 rp80,000 rp70,000 rp60,000 rp50,000 rp40,000 rp30,000 2Q 2011 1Q 2011 3Q 2011F 2008 2009 2007 2010
within oUtside cbd area

$14.00 $13.50 $13.00 $12.50 $12.00 $11.50 $11.00
average and the adjustment in the pegged rates. average rental rates was registered at
rp82,420/sq m/month in 2Q 2011. rental rates in US dollars were relatively flat.
service charge
Compared to 1Q 2011, service charges both for the CBD and outside CBD were relatively steady QoQ as new operating office towers entered the market with relatively similar rates with the overall market. In addition, service charges for US dollar denomination buildings have been strengthening quite a bit. average service charges in the CBD was registered at rp53,668/sq m/month, while for buildings with US dollar denomination, service charges were recorded at US$6.03/sq m/ month, a slight rise compared to the last quarter. During the same period, the outside CBD area fetched a higher figure than the previous quarter by achieving rp39,295/sq m/month. the same trend was also followed by buildings with US dollar rates, which recorded a 6% increase to US$4.57/sq m/month.
p. 7
average service charges for office bUilding in Jakarta

rp60,000 rp50,000 rp40,000 rp30,000 rp20,000 rp10,000 rp0 2Q 2007 2Q 2008 CBD 2Q 2009 outside CBD
oUtlook
the good news came from World Economic Forum (WEF) on East asia held in Indonesia, which has put the country under the spotlight for investment opportunities. according to the WEF report, Indonesia is the most competitive nation in the G20 major economic grouping. this is expected to trigger further business expansion, particularly from established types of businesses from the consumer goods, financial related industry, oil and gas, mining, information technology, manufacturing industry and pharmaceutical sectors. With continued good leasing performance driven by expanding business, landlords are more confident to introduce higher rents. prime quality office buildings in the CBD are now introducing new rental rates approaching US$40.00/sq m/month, a historic high in the office market. We anticipate this will further grow, particularly when such buildings reach high occupancy. a relatively small amount of new office space of only 145,279 sq m in the CBD this year will help regulate the occupancy level. of the new office buildings entering the market in 2Q 2011 (in the CBD and outside of CBD), the overall commitment level has reached 70%. a number of growing local companies have been the driver for the growth of strata-title offices for sale. In the outside CBD area, of a total of 114,733 sq m of strata-title office space during 2011, 82% was sold to the market. Likewise, a number of existing strata-title offices in the CBD has reported continued absorption, particularly from local companies. the pattern of office leasing remained the same, with relocation and expansion activity characterising the market. relocating activities are generally followed by expansion and this largely maintains a stable occupancy rate despite the influx of new office buildings.
2Q 2010
2Q 2011
prices
there are quite a few factors that cannot withstand the price of strata-title offices increasing. amongst them are increasing construction costs and continued demand. In the future, land price will be the determining factor of office space price, particularly for property located in the CBD area. our records indicate that the average gap between the initial price of strata-title property and the current price is 35%. on average, the price of office space in the CBD was at rp20,805,556/sq m during the reviewed quarter, reflecting an increase of 12% YoY. Similarly, a 13% increase YoY was seen in the outside CBD area, registered at rp16,644,444/sq m.
price of strata-title for sale for office bUilding in Jakarta

rp30,000,000 rp25,000,000 rp20,000,000 rp15,000,000 rp10,000,000 rp5,000,000 2007 2008 CBD (rp) 2009 2010 1Q 2011 2Q 2011 2011F 2012F $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0
outside CBD (rp)
CBD (US$)
p. 8
JAKARTA | 2Q 2011 | THE KNOWLEDGE | APARTMENT SECTOR
Apartment Sector
apartment for strata-title sale sUpply
three apartment projects - kalibata regency and kemang Village residence, each consisting of three towers, and Seasons City (tower B) completed during the 2Q 2011 period. these projects are largely located in the South jakarta area and West jakarta. From the low to upper class segment, a total of 3,899 units apartments entered the market in 2Q2011, bringing the cumulative supply to 90,844 units. In other words, total supply during the quarter contributed as much as 4.3% of jakartas apartment stock, up by 4.81% compared to the previous quarter (q-o-q). In terms of class, low class apartments comprise 28% of the total jakartas apartment supply. kalibata regency, of the kalibata City Superblock, consists of three towers (towers H, j and k). this project caters to the low class segment, comprising the most of this quarters supply (64%). another project completed this quarter is Seasons City (tower B), located at jl. Latumenten, West jakarta, aimed at the middlelow class segment and comprising 17% of this quarters supply. three towers of kemang
apartment sUpply of strata-title for sale by market segment in Jakarta
Upper 8.36% middle-Upper 20.23% Luxury 3.08%
Low 28.49%
middle-Low 39.83%
Village residence (the ritz, the Cosmopolitan, and the Empire), targeted to the upper class segment, also conducted a handover of 730 units during this quarter. overall, the middlelow class and low class segment have continued to dominate for the last two years and the area outside the CBD, even in the fringe of jakarta, are preferred locations, as land is relatively
cheap and vacant land is still widely available. these middle-low and low class segment apartments such as kalibata regency and Seasons City, typically take locations close to a main street or near toll gates, because one the key success factors of an apartment is access to transportation enabling tenants to reach their workplace easily.
list of of completed proJects in 2Q 2011

development kalibata regency (3 towers) kemang Village (the Empire) kemang Village (the ritz) kemang Village (the Cosmopolitan) Season City (tower B) region South jakarta South jakarta South jakarta South jakarta West jakarta market segment Low Upper Upper Upper middle-Low total: 3,899 Units
apartment sUpply of strata-title for sale by region in Jakarta

West jakarta 24.73% East jakarta 4.61%
CBD 20.50%
Central jakarta 13.22%
North jakarta 21.42%
South jakarta 15.51%

p. 9
Up to this quarter, as much as 44% (from twelve apartment projects of a total projected 19,112 units) entered the market, dominated by the low and middle-low class segment. By contrast with supply in 1Q and 2Q, the remaining projects will be dominated by middle-upper and upper class developments. the CBD will contribute three projects: ambassade residence, Denpasar residence and Cassa Grande residence. meanwhile ,Central jakarta, North jakarta and West jakarta will be respectively supplying two projects: 1@Cik
Ditiro and Cosmo terrace, located in Central jakarta, ancol mansion and De paradiso apartment, located in North jakarta, royal mediterania Garden residence (tower Lavender) and Central park residence (tower amandine) located in West jakarta, and only one project located in South jakarta: Niffaro kalibata. overall, there is no big change in the composition of apartment distribution, with around 20.5% of total supply located in the CBD. Elsewhere,
the gravity of supply is largely in West and North jakarta, where apartment projects mostly come with massive units. West jakarta represents 24.73% of the total apartment stock in jakarta, while North jakarta has 21.42% of jakartas total units. on the targeted segment, the strata-title apartment market was dominated by middle-low class projects (40% of the total existing supply), while the luxury class segment represented the least.
asking price
In general, asking prices for apartment units in jakarta were relatively stable, experiencing only a minor increase, largely due to active construction progress, which boosted developers confidence to adjust apartment prices. the average asking price for all classes of apartment increased to rp12.25 million/sq m, up from rp12.17 million/sq m previously. as shown in the graph below, asking prices for apartments in the CBD and non-CBD have been relatively stable since 4Q 2010. the CBD maintained a steady price, registering rp16.7 million/sq m, while prices in South jakarta rose 1.03% compared to the previous quarter. meanwhile, there are some middleupper to upper class projects located in the outside CBD (West jakarta) such as the Windsor, St. moritz and ancol mansion (North jakarta), which adjusted the average price of the outside CBD area to rp9.66 million/sq m, or up by 1.54% q-o-q.
average price per sQUare meter of strata-title for sale apartments in Jakarta
rp18 rp16 price (in Rp mio)/sq m rp14 rp12 rp10 rp8 rp6 1Q 2Q 3Q 4Q 1Q 2010 2010 2010 2010 2011 CBD Non CBD 2Q 2011
demand
Continued influx of new apartment projects has not been counterbalanced by consistent absorption, and this has resulted in the downswing of take-up trend, i.e. about 76.4% registered at 2Q 2011, down from 78.9% in the previous quarter. those figures represent the absorption of all the existing and underconstruction apartment units, but have already being marketed. the absorption rate by area indicated that the CBD saw the highest level, at an average of 84.7%, while the outside CBD only managed to fetch 75.8%. In terms of the target market, the middle-lower and middleupper still dominated sales activity, registering 88.4% and 88.1% take-up rate, respectively. potential demand was generated from new couples, students, and investors looking for returns from the secondary market.
Unsold and take-Up pre-sales
5,000 4,000 3,000 2,000 1,000 0 Low middle-Low middle-Upper Upper Luxury 100% 80% 60% 40% 20% 0%
Sales rates of operating condominiums in jakarta experienced a decline by less than 1% from the previous quarters figure of 90.5% but increased by 6.1% from the last years figure of 83.5%. the adjustment occurred because of several new projects with a massive number of units entering the market. meanwhile, during the quarter the pre-sales rate of apartments under construction was recorded at 63.2%. During the quarter, presales activities were dominated by the transaction of the middle-upper segment, recorded at 70.9%.
Unsold (Unit)
take-up pre-Sales
South jakarta average
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apartment for lease (serviced and Unserviced) sUpply

For the last two years since Golf pondok Indah (tower 3) entered the market, there has been practically no additional supply of unserviced apartment units (purely leased apartments). Up to this quarter, additional supply entering the market originally came from serviced apartments. the opening of 108 units, in Fraser residence Sudirman apartments from Frasers Hospitality pte Ltd, located in the golden triangle central business district, increased the total supply of jakarta Serviced and Unserviced apartments to 8,058 units as at 2Q 2011. of this number, serviced apartments continued to lead the market by 56%. the distribution of leased and serviced apartments was primarily concentrated in the CBD and South jakarta, with as much as 43% and 37% of the total stock, respectively. remaining areas, such as Central, North, East, and West jakarta, provide fewer than 10 apartments for serviced and unserviced projects. Within these areas, the middle-upper class apartment projects formed the largest part of the market, at about 80% of the total units.
composition of apartment for lease by category by market segment
Serviced 56%
Luxury 3%
middle-Low 17%
Unserviced 44%
middleUpper 80%
In the future, there will be about an additional 217 units from unserviced apartments, from plaza Senayan apartment (towers C & D) projected to operate in late 2012. meanwhile, from serviced apartments, ascott Serviced residences at Ciputra World jakarta and Citadines rasuna contribute 170 and 153 units, respectively, and they are predicted to operate in late 2013.
demand
the average occupancy rate of apartments for lease (serviced and unserviced) in general during this quarter moved upward to an average of 76.2%, from 72.1% in the previous quarter. the influx of foreign workers to the country has been signalled from the beginning of april and this most probably caused the occupancy performance. the CBD saw the most significant occupancy increase for serviced apartments, as this area continued as the preferred location for the serviced apartment type. after dropping in the early quarter of the year, serviced apartments in the CBD managed to record higher occupancy rates than the other five municipalities, at an average of 80.3%, up 13.8% q-o-q. Similarly, South jakarta market also posted a strong demand throughout the quarter, up to an average of 79.5% increase, 11.5% q-o-q. other areas besides the CBD and South jakarta experienced 56.9% occupancy rates, allowing 489 units to become available on the market.
occUpancy of apartment for lease in different locations

1Q 2011 area serviced CBD Southern jakarta outside CBD 66.47% 67.95% 52% Unserviced 82.09% 73.42% 72.39% serviced 80.28% 79.46% 56.91% Unserviced 83.72% 77.21% 73.56% serviced 13.81% 11.50% 4.63% Unserviced 1.62% 3.80% 1.17% 2Q 2011 increase
performance of apartment for lease in different locations

area CBD Southern jakarta outside CBD total total sUpply 3,447 2,956 1,655 8,058 Units occUpied 2,829 2,297 1,166 6,292 vacant Units 618 659 489 1,766
occUpancy (%) 82.07% 77.71% 70.45%
p. 11
Inquiries for luxury rental apartments, mostly located in the CBD, are anticipated to grow gradually, along with the increased activity of big corporations, which is considered the main demand generator for the luxury apartment market. meanwhile, it is seen that leasing activity in South jakarta area was boosted by short-term occupiers.
Existing rental apartment projects in jakarta, largely composed of aged developments, are lacking amenities that newer condominium developments offer. this will likely lead to demand to concentrate selected quality projects such as serviced apartments (particularly those managed by international hotel operators) located close to or within the CBD.
oUtlook
In the next few years, apartment development will be more focused on the one-stop living concept, where occupiers/tenants can shop, do business, exercise in the gym, watch cinema and feel at home. this type of apartment is mostly found in a mixed-use residential and commercial compound. Some existing mixeduse compound projects with residential components are Sudirman CBD, Senayan City, ratu plaza, kelapa Gading Square and plaza Senayan. this will be followed by the entry of some future ongoing projects, including kuningan City, Ciputra World jakarta, rasuna Epicentrum, kota kasablanka, kemang Village, Gandaria City, Green Bay pluit, St moritz, and podomoro City. among the positive impacts of mixed-use development are the concentrations of activities in one area, which enables time and cost efficiency and reduces air pollution. apartment prices would potentially surge over time, particularly because land prices significantly increase (within the CBD) and gradual construction cost, which will inevitably affect apartment prices. In the short term, the strengthening of the rupiah value against the greenback will push landlords to increase their rental cost, because the operational cost is in local currency.
rental rates
the overall rental rates for apartments for lease (serviced and unserviced) were steady at an average US$13.74/sq m/month. a small increment was contributed by an apartment, located in kebayoran Baru, which adjusted the rental rate to increase by US$25 per unit, for operational cost reasons. However, in the future we anticipate that the strengthening of rupiah denomination against the U.S. dollar would correct the average rental rates, because in this calculation we standardize the calculation using U.S. dollars. thus far, because many leased apartment use dollars for transactions, landlords would anticipate increasing the rates because the operational costs are in rupiahs. apartments in the CBD remained the market leader in quoting asking rents of US$17.59/sq m/month, from US$17.56/sq m/month previously. meanwhile, those in South jakarta and the outside CBD maintained average rental rates of US$12.46/sq m/month and US$8.81/sq m/month, respectively. In terms of rental tariff per unit (on average), rental cost for unserviced apartments were recorded at US$1,624/unit/month. the lowest rent of this type of apartment was US$280/ unit/month, while the highest was US$5,000/ unit/month. meanwhile, average rental rates per unit for serviced apartments registered at US$2,864/unit/month. the lowest rent started from US$750/unit/month, and the highest US$4,775/unit/ month.
Unserviced
$6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 CBD South jakarta Non CBD $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 CBD
serviced
South jakarta
Non CBD
average rental rates of apartment for lease

$20.00 $15.00 $10.00 $5.00 $0.00 2007 2008 CBD 2009 South jakarta 2010 Non CBD 1Q 2011 2Q 2011 average
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JAKARTA | 2Q 2011 | THE KNOWLEDGE | EXPATRIATES HOUSING AND APARTMENTS SECTOR
Expatriate Housing and Apartments

eXpatriate hoUsing sUpply and rental rates
For the last six months, around 280 houses of expatriate standard were added to our database, including new or renovated houses. preferred expatriate areas, such as kebayoran Baru, pondok Indah, kemang, Cipete, etc., generally provide houses to an expatriates common standard, like a minimum of four bedrooms or with a building size minimum of from 400 to 600 sq m. additional facilities like swimming pools and back yards are still the main attraction in selecting a house. the under construction elevated road connecting jalan tB Simatupang to Blok m area is scheduled to finish in august next year. During the construction there were largely unjustified fears amongst newly arrived expatriates that it would trigger congestion to access areas like kemang, Cilandak or Cipete. more and more expatriates are now eyeing favourite locations like pondok Indah or kebayoran Baru. Nevertheless, the challenge lies in the limited stock in those locations, which has triggered higher asking rents there. Housing supply is relatively stagnant in these two areas, due mostly to the scarcity of land. For example, land in the prime location in kebayoran Baru can be offered as high as rp30 million/sq m (equivalent to US$3,500/sq m), and this impedes the development of new houses. the table below gives a brief description of average land price in some preferred expatriate locations. eXpatriates hoUsing rental rates
hoUsing by area menteng 3-Bedroom House 4- to 5-Bedroom House kuningan 3-Bedroom House 4- to 5-Bedroom House pondok Indah 3-Bedroom House 4- to 5-Bedroom House 3- to 4-Bedroom/complex kebayoran Baru 3-Bedroom House 4- to 5-Bedroom House 2-Bedroom townhouse/complex 3- to 4-Bedroom townhouse/complex permata Hijau, Simprug 3-Bedroom House 4- to 5-Bedroom House 3- to 4-Bedroom townhouse/complex kemang 2-Bedroom townhouse/complex 3-Bedroom townhouse/complex 4-Bedroom townhouse/complex 3-Bedroom House 4- to 5-Bedroom House Cilandak 2-Bedroom townhouse/complex 3-Bedroom townhouse/complex 4-Bedroom townhouse/complex 3-Bedroom House 4- to 5-Bedroom House Cipete 2-Bedroom townhouse/complex 3-Bedroom townhouse/complex 4-Bedroom townhouse/complex 3-Bedroom House 4- to 5-Bedroom House pejaten 3-Bedroom townhouse/complex 4-Bedroom House 400 - 600 500 - 900 US$1,500 - US$7,000 US$3,000 - US$7,000 150 - 220 200 - 300 400 - 700 300 - 500 400 - 800 US$1,500 - US$2,000 US$2,000 - US$3,500 US$2,750 - US$6,000 US$2,500 - US$3,500 US$3,500 - US$7,000 200 - 300 280 - 400 300 - 700 300 - 600 450 - 750 US$1,500 - US$2,500 US$2,000 - US$3,500 US$2,250 - US$6,500 US$2,500 - US$5,500 US$2,500 - US$7,000 210 300 - 500 400 - 700 400 - 750 550 - 1,000 US$2,000 - US$3,000 US$3,000 - US$4,500 US$3,500 - US$5,500 US$3,000 - US$5,000 US$3,500 - US$7,000 300 - 500 400 - 1,500 220 - 240 US$2,500 - US$3,500 US$2,500 - US$12,000 US$2,500 - US$5,000 500 - 750 600 - 1,500 135 - 200 250 - 700 US$2,000 - US$4,000 US$3,000 - US$15,000 US$2,500 - US$3,500 US$3,000 - US$6,700 500 - 700 550 - 1,000 350 - 600 US$2,500 - US$4,000 US$3,500 - US$15,000 US$3,000 - US$4,500 400 - 700 500 - 900 US$3,000 - US$4,500 US$3,500 - US$11,500 150 - 700 500 - 1,200 US$2,000 - US$3,250 US$3,000 - US$9,000 size (sQ m) rental rates (Us$)
average land prices in several eXpatriate locations

average land price/sQ m location in rUpiah kuningan kebayoran Baru menteng pondok Indah permata Hijau kemang Cipete pejaten Cilandak rp21.4 mio rp19.3 mio rp19.1 mio rp17.6 mio rp15.7 mio rp8.4 mio rp7.4 mio rp7.3 mio rp6.5 mio Us$ eQUivalent US$2,490 US$2,240 US$2,220 US$2,050 US$1,830 US$980 US$860 US$850 US$760
Colliers International Indonesia - residential tenant representation Services Colliers International Indonesia residential tenant representation Services
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the rental tariff for housing has been relatively the same over the last six months, with all housing quoted in U.S. dollar rents. Nevertheless, along with the strengthening rupiah value against the greenback, landlords started asking for higher rents, ranging from US$100 to US$200, because their expenses for repair, renovation and the operation of the house are paid in local currency. on the corporate side, this will be a tough issue, since accommodation cost budgets remained the same. High ranking officials generally aim for pondok Indah and kebayoran Baru, where luxury houses can be offered at above US$10,000/ month. Furthermore, there are fewer ready stock houses available in these two locations.
apartments sUpply and rental rates

For the last six months, the average rental rates tariff for selected expatriate apartments has shifted upwards. In Sudirman area, we have witnessed rental increases in the range of 13% to as high as 25% in US$/unit. overall, most increases were for serviced apartment units. In general, rental tariffs for unserviced apartments apartment rental rates
apartment by area Sudirman 1-Bedroom apartment 50 - 121 84 - 180 106 - 370 236 - 513 70 - 100 112 - 142 147 - 213 62 - 80 95 - 145 96 - 323 58 - 91 83 - 190 121 - 300 285 - 500 120 - 350 45 - 75 90 - 175 165 - 300 45 - 76 78 - 143 165 - 200 90 - 114 125 - 315 262 - 300 220 - 295 US$1,500 - US$1,700 US$1,500 - US$4,000 US$2,200 - US$5,000 US$3,500 - US$8,000 1,500 US$1,800 - US$2,500 US$1,500 - US$1,800 US$1,500 - US$2,200 US$1,500 - US$4,300 US$1,500 - US$2,000 US$1,800 - US43,500 US$1,750 - US$4,000 US$1,500 US$1,500 - US$2,000 US$1,700 - US$4,000 US$1,500 - US$2,000 US$1,500 - US$1,800 US$1,750 - US$2,600 US$1,500 - US$1,900 US$2,000 - US$3,500 US$3,450 - US$3,950 US$3,300 - US$4,500 US$2,200 - US$3,500 US$2,500 - US$4,000 US$3,000 - US$5,800 US$1,500 - US$1,700 US$1,800 - US$2,400 US$2,000 - US$3,500 US$1,900 - US$3,000 US$2,000 - US$3,800 US$2,100 - US$4,200 US$1,800 - US$2,700 US$2,500 - US$3,500 US$2,900 - US$5,000 US$5,250 - US$5,750 US$1,900 - US$2,200 US$2,450 - US$2,500 US$2,750 - US$3,900 US$2,400 US$2,700 US$4,700 US$2,200 US$3,000 US$3,400 2-Bedroom apartment 3-Bedroom apartment 4- to 5-Bedroom apartment menteng 1-Bedroom apartment 2-Bedroom apartment 3-Bedroom apartment kuningan 1-Bedroom apartment 2-Bedroom apartment 3-Bedroom apartment pondok Indah 1-Bedroom apartment 2-Bedroom apartment 3-Bedroom apartment 4- to 5-Bedroom apartment kebayoran Baru 2- to 3-Bedroom apartment permata Hijau, Simprug 1-Bedroom apartment 2-Bedroom apartment 3- to 4-Bedroom apartment kemang 1-Bedroom apartment 2-Bedroom apartment 3-Bedroom apartment Cilandak 2-Bedroom apartment 3-Bedroom apartment 4- to 5-Bedroom apartment Cipete 3-bedroom apartment size (sQ m) rental rates (Us$/Unit) Unserviced serviced
are relatively flat. Compared to last semester, rental rates for serviced apartment in menteng rose by 6%; in kuningan area (rasuna Said) they climbed by 10% to 12%; in pondok Indah rental they increased by 12%. In kebayoran Baru rental rates were relatively flat.
demand
Several lines of businesses during the first half of the year were quite expansive, particularly from FmCG (fast moving consumer goods) corporations. this is typically followed by an increasing number of expatriates being hired, fuelling the expat housing market. We have witnessed a number of housing inquiries from such an industry. meanwhile, the trend of housing demand from oil Company has been relatively constant. there are relatively few expat-standard houses within kebayoran and pondok Indah location and, for those there are, the budget will be high. pondok Indah is a preferable location in South jakarta, for it offers good amenities and ambience and is also very close to jakarta International School. Expatriates with office locations in the CBD would still favour this location notwithstanding that it is quite far from their workplace, because often the proximity to the international school is the higher priority. as for kebayoran Baru, rental rates are very high because it is near both the workplace in the CBD and international schools like jIS pattimura.
Colliers International Indonesia - residential tenant representation Services
p. 14
occUpancy
Upper-class apartments generally capture high occupancy of between 87% and 92%. this figure was fairly stable compared to what was achieved in the previous semester.
average occUpany rate of selected apartments preferred by eXpatriates
100% 80% 60% 40% 20% 0% D a B C E average
Colliers International Indonesia residential tenant representation Services
United states
the number of expatriates from the U.S. for the last four years has been relatively steady. the quarterly data for 2007 posed that around 30 expatriates came to Indonesia, while in 2008 2009 numbers fluctuated, where in some periods quarterly numbers of expatriates dropped to 20 people, but also reached a peak of around 57 expatriates. From 2010 onwards, the number of expatriates from the U.S. has gradually increased. By analyzing the graph trend, the number of expatriates from the U.S. will not fluctuate much.
nUmber of U.s. eXpats granted temporary and permanent resident permits
60 50 40 30 20 10 0 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011
demand
there are relatively few expat-standard houses within kebayoran and pondok Indah location and, for those there are, the budget will be high. Expatriates with no kids will be directed to apartment accommodation, but such an arrangement is not so popular amongst expatriates, who prefer to opt for houses rather than apartments.
aUstralia
Similar to the number of expatriates from the U.S. and Europe, australia has also shown a positive trend for the last four years . Starting with 15 people in 2007, for the last two years the number has noticeably doubled, to an average of 28 people per quarter in 2010. If we look at the distribution, the quarterly pattern is a bit random; however, in semesterly analysis there is a more orderly pattern. With such a pattern, combined with greater hope for a better economy, the number of expatriates should potentially grow.
nUmber of aUstralia eXpats granted temporary and permanent resident permits
35 30 25 20 15 10 5 0 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011
Directorate General Immigration - republic of Indonesia
trend of nUmbers of eXpatriates

the Indonesian House of representatives (Dpr-rI) has approved draft legislation that promises an unprecedented level of ease for foreign residents. Some of the foreignerfriendly regulations include the following: It will allow foreign investors to obtain permanent residency in Indonesia if they meet certain criteria. While foreign investors in the past had to stay in Indonesia for five years before being able to apply for permanent residency, the new rules shorten that requirement to three years;
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1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011
Legend: a: Dharmawangsa, Sailendra B: Four Seasons, plaza Senayan, the plaza residence C: the residence, Golf pondok Indah, Bukit Golf, ascott, menteng Executive D: aston, permata Berlian, puri Casablanca, Casablanca E: taman rasuna, puri Imperium
permanent residency will be given to families of mixed marriages between Indonesians and foreign nationals. this facility will extend to husbands, wives and children of such unions. p permanent residency without a time limit will be given to certain investors married to Indonesian citizens, which can be renewed without payment every five years at an immigration office; Discrimination towards the offspring of mixed marriages between Indonesians and foreign nationals is expected to end with the new immigration law. Children resulting from such unions are entitled to Indonesian citizenship and allowed to stay permanently in Indonesia; Children of mixed marriages who are living overseas but wish to become Indonesian citizens will be facilitated with temporary citizenship identification valid for two years. after the two-year period they can obtain permanent residence in Indonesia.
eUrope
the quarterly data for expatriates from Europe demonstrate an upward trend for the last four years. the number of expatriates from Europe experienced a surge every early quarter of the year. a significant jump occurred in 4Q 2010 and still continued to soar in the 1Q 2011. In short, the trend of a growing number of expatriates from Europe will continue to edge higher, given a stable economy and a positive investment climate.
nUmber of eUropean eXpats granted temporary and permanent resident permits
250 200 150 100 50 0
JAKARTA | 2Q 2011 | THE KNOWLEDGE | RETAIL SECTOR
Retail Sector
sUpply Jakarta
after having limited supply from one shopping arcade last quarter, again, the jakarta retail market saw no additional retail space during the reviewed quarter. Nonetheless, the construction progress is still continuing without delay, to ensure that the schedule is still on track. about three retail centres are expected to finish this year, including a sizeable retail area in kuningan City mixed-use compound, and another two shopping arcades the size of retail, i.e. area 51 and Green tebet Shopping arcade, which is projected to operate in the next or end quarter of 2011. another retail development located in South jakarta and also integrated into a massive high-rise residential complex that is anticipated to operate this year is kalibata City Square. as a neighbourhood retail concept, the majority of tenants will be from food and beverage retailers just as support. other potential supply will also come from the expansion of existing ItC roxy, a thematic gadget centre in West jakarta, which will vertically expand one floor to facilitate electronic products. With no additional supply, retail space in jakarta remained at 3.93 million sq m. as there will be limited retail space coming this year, the annual supply for 2011 will be the lowest for the last three years.
cUmUlative sUpply of retail spaces in different regions in Jakarta

1,000,000 800,000 sq m 600,000 400,000 200,000 0 2007 South jakarta 2008 Central jakarta 2009 2010 1Q 2011 2Q 2011 2011F North jakarta 2012F CBD
West jakarta
East jakarta
fUtUre sUpply list of retail centre in Jakarta

retail centre kalibata City Square kuningan City area 51 Green tebet kemang Village menteng Square kota kasablanka Ciputra World jakarta Cipinang Indah mall Green Bay pluit St moritz pulomas X Venture mall at the City Centre location kalibata Satrio pondok Indah mt Haryono pangeran antasari proklamasi kasablanka Satrio Cipinang pluit puri Indah pulomas kH mas mansyur proJected completion 3Q 2011 4Q 2011 4Q 2011 4Q 2011 1Q 2012 1Q 2012 2Q 2012 4Q 2012 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2014 constrUction progress Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under planning Under planning Under planning Under planning Under planning total = 543,467 sq m
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sUrroUnding the city of Jakarta (debotabek - depok, bogor, tangerang and bekasi)
Living World alam Sutera, launched in may 2011, is the only shopping centre completed this quarter. offering a different ambience, the centre is designed with a skylight concept with a faade dominated by glass, which optimizes the sunlight. the centre provides around 70,000 sq m of nett lettable retail space, bringing the total retail space in the DEBotaBEk area to 1.86 million sq m. the tangerang area will dominate the supply composition of retail space in the future. Based on the number of projects in the pipeline, during future 2011 2014, there will be several centres planned to open, including tangerang City, Sumarecon mall Serpong II, Shopping mall at alam Sutera and two lifestyle centre malls: the Breeze and Bintaro Lifestyle Centre. another active area is Bekasi, with several plans for new retail centres, followed by Bogor. In Bogor, apart from other future retail spaces being planned, Bellanova Country mall in Sentul will add one more floor for their expansion and this will seemingly be started next year.
cUmUlative sUpply of retail spaces in different regions in debotabek

800,000 700,000 600,000 sq m 500,000 400,000 300,000 200,000 100,000 0 2007 2008 2009 Bogor 2010 Depok 1Q 2011 2Q 2011 2011F Bekasi 2012F tangerang
fUtUre sUpply list of retail centre in debotabek

retail centre tangerang City plaza Dua raja Shopping mall alam Sutera the Breeze Sinar mas Land Sumarecon mall Serpong II Cimandala City mall Cimandala City trade Centre mal Harapan Indah Bekasi junction Bekasi trade Centre 2 metropolitan Grand mall Bintaro Lifestyle Centre location tangerang Bogor tangerang tangerang tangerang Bogor Bogor Bekasi Bekasi Bekasi Bekasi tangerang proJected completion 3Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2013 4Q 2014 development Under Construction Under Construction Under Construction Under planning Under planning Under planning Under planning Under planning Under planning Under planning Under planning Under planning total = 431,720 sq m
demand
Supply of retail space almost reaches 4 million sq m, leaving around 526,000 sq m. this reflects the occupancy level in 2Q 2011 achieving 86.6%, up 2.3% q-o-q. Since mid2009, the occupancy trend in jakarta has tended to gradually increase. the regulated supply increase and the high pre-commitment level of new retail centres are seemingly the main key drivers maintaining occupancy level. the overall vacant spaces are mostly concentrated in the strata-title retail centres (widely known as trade centres). Similar to jakarta, the average occupancy level in the DEBotaBEk area demonstrated an upward performance. During 1Q 2011, the occupancy level was registered at 83.9%, up by 1% on the previous quarter.
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occUpancy rates of retail centres in Jakarta and debotabek

100% 95% 90% 85% 80% 75% 70% 2Q 2007 2Q 2008 2Q 2009 jakarta 2Q 2010 1Q 2011 2Q 2011
Greater jakarta
tenant transactions Jakarta

Several transactions were recorded in five regions of jakarta, starting from West jakarta, which reached the highest growth q-o-q. this achievement is largely buoyed by the excellent performance of Central park mall. this shopping mall, located within Central park commercial compound, continued to add to their tenants list since opening in 2009, not only committed to occupying but with new tenants also opening their stores. the operation of new fashion and accessories retailers was dominated by such as Bershka, Stradivarius, Lee, Fearless, Next, Urban Icon Nautica, Guess, Etienne aigner, raoul, Hugo, mango and tods. For dining and gourmet dining, it was able to recruit Carls jr, Dharma kitchen, and tokio kitchen. Erha apothecary, beauty and personal care also opened at this mall, which received awards at the national and asia pacific level recently. a retail centre originally marketed for sale but available for lease is ItC roxy mas, which recorded sound performance. after being 100% sold, this centre still offers the vacated space for lease where, during the reviewed quarter, new tenants selling gadgets helped this centre achieve high occupancy. anticipating further inquiries, the landlord is planning to expand one floor vertically, in particular allocating the space for an electronic centre. In South jakarta, retail space transactions particularly turned out within the business district area, which lifted the overall occupancy performance in this region. pacific place mall continued to keep up a good leasing performance with the operation of new tenants like tesate (also opening at plaza Senayan) a culinary local tenant. other newly operating tenants include the Storm and opera Blanc. Still within this mall are the relocation activities, involving Caf Betawi, which seeks larger space, or kidzone, which will relocate adjacent to kidzania. this is planned to better organize and to make a clear zone for the centre. Further, in anticipation of the influx of a new department store from paris, Galeries Lafayette, which is confirmed to occupy space soon, the landlord is anticipating relocating several operating tenants. other tenancy activities are also occurring at Senayan City from this quarter onward. after finishing renovation, kiddy Cut re-opens, followed by topman, a mens fashion retailer, and Coldstone, an ice cream outlet. It was also indicated that some tenants will occupy large space around low zone areas of the mall. Leasing activities were also counterbalanced with closure of the stores; for example, iBox, an apple product centre, closed their existing outlet for renovation and opened a temporary outlet in an island area, while a home decor, kitchen & furnishing outlet was seen to close their operation. two retail centres in rasuna Said area - rasuna Epicentrum and pasar Festival - also welcomed the entrance of several retailers, the majority from the food and beverage industry. It was interesting to note that an unusual type of active tenants opened at Setiabudi one: prospera Dance management, a dancing class occupying the third floor. meanwhile, within this centre, Dabu-Dabu temporarily closed for renovation and ming Seafood stopped operating.
occUpancy rates in different regencies in Jakarta

100% 95% 90% 85% 80% 75% 70% 65% 60% 2Q 2007 Central jakarta 2Q 2008 South jakarta 2Q 2009 2Q 2010 1Q 2011 East jakarta 2Q 2011 West jakarta
North jakarta
p. 18
a well known lifestyle centre, Citos (Cilandak town Square), brought Delifrance as a new tenant, while plaza Blok m filled in the remaining vacant space with various retailers from food, fashion and accessories. as part of the CBD areas are within the Central jakarta region, several malls are categorized as upper class malls. For example, plaza Indonesia will have a|X armani Exchange, Saint Louis Hermes and time place. It is also indicated that amante, mandiri Bank, Edidi, Fendi and Balenciaga are planning to open soon. at plaza Senayan several tenants from F&B have opened, including De Luca, a modern Italian restaurant and cocktail bar, and paradise Dynasty, together with monolog, a coffee shop with tag line coffee and all-day breakfast opened on the ground floor. the west wing side of Grand Indonesia Shopping town has performed better than the east wing and captured two fashion and accessories retailers, Bonia and Sorella. meanwhile, in the east wing side, some boutiques from local designers have occupied vacant space left by one department store (despite from the total vacated space only one floor having been occupied). In a short time several retailers are also planning to open soon in the east wing, comprising Verde, rococo, madison and parang kencana. jakarta art District also participated in occupying a lower zone, selling various handicrafts and paintings. this tenancy mix is expected to more evenly distribute visitor traffic to the mall and boost occupancy. Not only premium malls are enjoying continuing leasing transactions; other classes of shopping centres, particularly located within Central jakarta, have also shown good performance. For example, the return of mcDonalds has restored Sarinah as a popular place for a hangout or meeting point and thus enticed Sarinah to extend its department store at the ground floor. another retail centre, plaza atrium, has acquired tenants selling gadgets, fashion and food and beverages. In tanah abang, a well-known grocery area, the stratatitle spaces were subleased by retailers selling fashion product and accessories.
meanwhile, matahari Department Store launched one new store recently. this store and several small retailers occupied a mall located around kelapa Gading, North jakarta. Still in the kelapa Gading, another big mall added toys kingdom, muji Store and Colony as mini anchor tenants. all the good stories above were contrasted with leasing terminations, in particular when the transaction within a retail centre cannot cover the operational cost. this mostly occurred in low performing strata-title retail centres. Further, not all shopping arcades posted good performance, particularly when the internal target visitors cannot support the operation of the tenants. In our view, new tenants would take the opportunity to open their outlets with minimum rental but when traffic within the centre is low, many closed down. By contrast, well-known and branded retailers would only open in established shopping centres with consistent traffic flow.
one of DEBotaBEk areas, Depok City, showed an upward trend in retail space absorption. Food and beverage retailers, such as DCost, Bumbu Desa and rice Bowl, opened at Cinere. another variety of tenant comprising fashion retailers, a sports station and accessories for women opened at Lippos Depok town Square, located in margonda. another ageing shopping centre located in the same corridor, Depok mall had renovated its faade to attract more visitors as well as providing a 24-hour service for visitors to eat at mcDonalds and kFC outlets. these strategies are quite effective in improving the mall to compete with newer malls in the surroundings. to date, the Foodhall and mizan bookstore are in the fitting-out progress to open in this mall. In the eastern part of DEBotaBEk area, Bekasi Square and pondok Gede plaza have committed with several food and fashion retailers, while in the southern part, Bellanova Country mall, located in Sentul, is planning to expand vertically to accommodate the expansion of department stores.
debotabek
Before officially launching, Living World alam Sutera had acquired some mid-size tenants like XXI, Disc tara, Electronic Solution, Informa, ace Home Centre, toys kingdom and Hero Supermarket. this mall is also equipped with a list of F&B retailers, such as j.Co, Bread talk, takigawa, roppan, kopitiam, Sate Senayan, Solaria, Bengawan Solo, and my kopi had already opened. other tenants, like Bike Colony, Guardian, Century, Body Shop, optik Seis, optik tunggal and optik melawai, are on the list of new tenants. So far, the commitment level of this shopping centre has achieved around 70%, which helps maintain the overall occupancy for the DEBotaBEk area.
occUpancy rates in different regencies in debotabek

100% 95% 90% 85% 80% 75% 70% 65% 60% 2Q 2007 2Q 2008 Bogor 2Q 2009 Depok 2Q 2010 tangerang 1Q 2011 Bekasi
2Q 2011
p. 19
commitment level in the Under-constrUction retail centre

Lotte Department Store of korea has signed to occupy the whole space in Ciputra World shopping centre in jalan prof. Satrio, and is projected to open in 2012. to date, Lotte is one of the most active retailers, which is also planning to operate in kuningan City (about 1 km from Ciputra World) with the brand of Lotte mart. a direct competitor to Lotte mart is Carrefour, which will commence in the mall at kota kasablanka. Besides Carrefour as the anchor tenant, kota kasablanka has secured several tenants to occupy a partially leasable area. In the DEBotaBEk area, tangerang City is preparing for a soft launch. the mall is built integrated with residential development and has obtained commitment from several restaurants, like Hoka Hoka Bento, Bakso Lapangan tembak, Solaria, rice Bowl, j.Co, a&W, Dunkin Donuts, Bread talks dan kFC. other types of business to operate in this mall include johny andrean, optik Seis, optik tunggal, Lily kasoem and Century. and to lure more visitors, a number of crowd puller tenants have agreed to operate, including Fun World, Fun ok karaoke, Gramedia and Carrefour. another mall in tangerang, mal at alam Sutera, was also reported to secure high precommitment leasing transactions, while the project is accelerating construction work that will be finished by next year.
In general, developers maintained service charge costs at their current level. any difference from last quarters figures was mainly in the adjustment made by a few landlords, but this only modestly lifted the average service charges in jakarta to rp70,522/ sq m/month. In the DEBotaBEk area, a couple of mixed factors have lifted the overall service charge figure, albeit moderately. Such factors are from the need to adjust the tariff according to the market value and the overall adjustment made due to operation termination and influx of new shopping centres. recorded for the DEBotaBEk area, was service charge cost at rp56,731/sq m/month, adjusted by 1.36% q-o-q.
asking rental rates and service charge

average asking rental rates in Jakarta and debotabek
rp400,000 rp350,000 rp300,000 rp250,000 rp200,000 rp150,000 rp100,000 rp50,000 rp0 2007 2008 jakarta 2009 2010 DEBotaBEk
oUtlook
Indonesia, with its enormous population and promising economic outlook, has been under the radar for many overseas investors. From the branded fashion and accessories line of business, quite a few European brands are now eyeing the potential upper class market, which is quite solid, particularly in big cities like jakarta and Surabaya. Likewise, the food and upper class restaurant types of retailers are mostly coming from Europe or the U.S., and several asia countries. they are mostly targeted at the middle to upper class segments, appealing to their lifestyle. the market is expecting to see more new brands, i.e. brands which have not operated in Indonesia but have a strong presence internationally. Such brands should be a pulling factor, particularly for snob shoppers (of which there are quite a few). on the hypermarket level, the existing competition among Carrefour, Giant and Hypermart has been challenged by the very expansive Lotte group from korea. they are now trying to acquire retail space in primary new malls, as well as acquiring land for their grocery operation. Not wanting to miss the opportunity, metro Cash and Carry is also eyeing the big market in Indonesia, although they would prefer to have stand-alone premises. all these signs have confirmed that Indonesia is a big pool of potential markets to be developed and we will see more new brands coming into Indonesia, which is good from a shoppers perspective, offering new options.
1Q 2011
2Q 2011
With only moderate upward movement, of less than 1% over last quarter, many developers choose to maintain current asking rental rates, thus bringing the average rental rates in jakarta area to rp349,507/sq m/month in 2Q 2011. a relatively improving trend of 3.7% q-o-q was enjoyed by the DEBotaBEk area, to register at an average of rp248,960/sq m/month.
the overall rental rates are projected to stabilize, with the strong possibility of gradually increasing, although developers are more prudent in introducing higher rates, due to rigorous competition. all in all, the upward trend in rental rates will be largely fuelled by the operation of new shopping centres (of middle to upper class), which will introduce higher rates than average.
average service charge in Jakarta and debotabek

rp80,000 rp70,000 rp60,000 rp50,000 rp40,000 rp30,000 rp20,000 rp10,000 rp0 2007 2008 2009 jakarta 2010 DEBotaBEk
1Q 2011
2Q 2011
p. 20
JAKARTA | 2Q 2011 | THE KNOWLEDGE | INDUSTRIAL ESTATE SECTOR
Industrial Estate Sector

sUpply
Land stock, particularly in the Bekasi region, is becoming rare due to continuing absorption. this also happens in several industrial estates in other regions, where plans for expansion have not been in place. meanwhile, in the tangerang region, many industrial estates have run out of land stock, particularly those selling to the public. Basically, while there is much land stock in tangerang, several industrial estates only sell to their own group of companies, which ensures low occupancy for several years. During 2Q 2011 we have seen an addition of approximately 4.5 hectares from the mm2100 industrial estate. this is basically a land substitution after developers acquire this green area in fulfillment of the obligation to provide a greenery quota. the small increment moderately raised the overall stock of serviceable industrial land to 8,666.3 hectares in the six regions (jakarta, Bekasi, tangerang, Bogor, karawang and Serang. Some industrial developers have suggested that they would proceed with their expansion plans. For example, one developer in karawang has another land expansion of around 138 hectares but with the option to sell the whole land parcel to investors. other industrial estates like the one in Serang have started to sell their new phase of development of 80 hectares as indented for. also in Bekasi, the market is expecting an opening of a new phase of development from one (relatively new) industrial developer of around 300 hectares but with no definite schedule. another prominent developer in Bekasi/Cikarang area has also set a target to gradually open around 200 hectares per year. additional industrial land will not only be coming from operating industrial estates. In Serang, kawasan Industri terpadu mGm is planning to open in 2012, bringing around 662 hectares to the market.
distribUtion of indUstrial land in siX regions
Serang 21%
jakarta 10%
Bogor 2% Bekasi 26%
karawang 36%
tangerang 5%
the industrial market, such as land prices and take-up rates, have moved forward. total sales for the first semester of 2011 were recorded at 566 hectares, higher than the total of 543 hectares in 2010. With another six months left,
total land sales for the whole 2011 will be at an historic high. total sales for this quarter alone only represent 53% of total sales in the previous quarter, totalling around 196 hectares.
land sales recorded Up to 2Q 2011 in each indUstrial estate

Suryacipta Delta Silicon Bekasi Fajar Greenland (kota Delta mas) kIIC jababeka kota Bukit Indah kujang Industrial Estate krakatau Industrial Estate Cilegon modern Cikande kI mitrakarawang mm2100 Industrial town kota Bukit Indah (Indotaisei) kBN CCIE millenium 0 30 60 90 120 150
hectares
180
demand
Superb is the word to describe industrial sales so far. total sales in 2010 alone have outstripped the historic high sales of 2005 but now, after only six months of 2011, total sales up to 2Q 2011 have again surpassed the total sales in 2010. In the last two years, many indicators in
p. 21 | colliers international
In general, automotive and related industries remained the key drivers for industrial land sales. Up to 2Q 2011, transactions concluded by automotive industries represented around 46% of the total sales in the first semester this year, accounting for a total of 263.5 hectares. It is interesting to note that the majority of land transactions by automotive and related industries occurred in either the Bekasi or the karawang area. In the early history of the
industrial market, the automotive industries were directed to concentrate in these two regions; therefore, big names like toyota, Honda, Daihatsu and other korean and Indian automotive industries, have been operating in these areas. their presence has been growing quite substantially, also helping their vendor and auto parts manufacturers to expand within these areas.
annUal indUstrial land sales indUstrial land sales recorded in 4Q 2010

600 500 400
hectares
cUmUlative sUpply, demand and take Up rates

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2Q 2011 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2Q 2011
300 200 100 0 2000 2002 2004 2006 2008 2005 2009 2003 2007 2010 2001
Cumulative Supply (ha)
Cumulative Demand (ha)

another dynamic industry is consumer goods and food. During the first semester 2011, three industries chose Bekasi and karawang as their location, with one small industry selecting Serang as their location. Good accessibility to the toll road, and its proximity to downtown, are positive points for many industries to be located in Bekasi or karawang. this is also the reason behind the growing number of distribution centres or logistics companies acquiring locations in either Bekasi or karawang. In the tangerang area, we have seen a limited number of transactions, as many operating industrial estates have been well absorbed, or for other reasons such as industrial estates only focusing on selling land to companies within their own group. Some others have limited accessibility, which dissuades buyers from acquiring land. Big industrial estates like Cikupamas, albeit leaving some vacant land parcels, basically have very limited land to offer, and taman tekno BSD, which only provides a
type of active indUstries Up to 2Q 2011
small amount of industrial land. our record shows that during 2Q 2011 only millennium Industrial Estate sold a factory building of 288 sq m to an expanding tenant. In the Serang area, we only registered two active industrial estates with consistent sales: modern Cikande and krakatau Industrial Estate Cilegon (kIEC). modern Cikande sold a total of 5.2 hectares of land to a building material company and the food and wire industries. all transactions were made by expanding tenants within the estate and all are local companies. kIEC, as part of krakatau Steel (the biggest national steel producer) continued to tie sales agreements with steel-related industries, with a 4.2-hectare transaction made by a korean company (new to Indonesia). apart from that, food raw materials like sugar or wheat flour continued to expand within this estate, and for this quarter we recorded one local sugar industry expanding and acquiring another 1.3 hectares.
Steel related Electronics 0.01% 2.91% pharmaceutical printing 0.07% 0.21% plastic 1.51% Consumer Goods 7.94% Food & Beverage 0.98%
manufacture machinery 1.12% Heavy 1.18% packaging Equipment Garment Chemical 1.75% 1.13% 2.19% Logistic/1.16% Warehouse 9.13%
textile 1.05%
molding 1.82%
tire Developer 10.53% 0.93% others 8.16%
automotive 46.22%
By region/regency, Bekasi contributed most transactions during the quarter, with four industrial estates booking a considerable volume. Greenland at kota Deltamas noted a total of 42 hectares of transactions by one local company, one French company and nine japanese companies, mostly in the automotive industry. the sales recorded by Greenland were much higher than the 12.8 hectares sales they concluded during 1Q 2011. In second place was Delta Silicon, which again mustered a number of small transactions totalling around 39.7 hectares. Looking at their buyers profile, most transactions were made by warehouse and logistics companies, and some manufacturers and from the plastics industry. as in previous quarters, there were more acquisitions of small land parcels from small developers. this type of developer generally buys land from Delta Silicon, builds a factory building and sells it. In the third place of the most saleable industrial estates in Bekasi was Bekasi Fajar, which reported the sale of a total of 25.6 hectares, comprising the leasing of a warehouse building (for a 30-year lease term) to a prominent consumer goods company, of around nine hectares, and selling the remainder to the industries of electronics, electrical machinery, food, plastics and paint. another industrial estate which recorded significant transactions was jababeka, which in this quarter recorded 10 hectares of land transactions, down from the 26 hectares sold in the previous quarter. Sales in jababeka during the first semester of 2011 were mostly from automotive and consumer goods, followed by smaller transactions of less than two hectares by plastic, electronics and metal manufacturers, as well as workshop service and trading. although recording small transactions, mm2100, as one primary industrial estate in Bekasi continued to register sales from NtC, in the automotive component
p. 22
industry, which expanded another 2.9 hectares. all in all, total sales for 2Q 2011 in Bekasi region were registered at 120.2 hectares, representing around 61% of total sales during the quarter. karawang was the second most active region, selling and leasing industrial land. almost all operating industrial estate within karawang registered transactions during 2Q 2011, representing 32% of the total sales during the quarter, around 63 hectares of which has been absorbed by various types of industries. kIIC sold the most of the other industrial estates, with total sales of 21.6 hectares. Sales within kIIC were from various industries: automotive parts, paint, steel cutting, tape and other industries. Land plots sold ranged in size from two to five hectares, largely from japan, with one from malaysia. after hitting a sales record in 1Q 2011 with a total of 173.2 hectares, Suryacipta Industrial Estate only sold around 12.3 hectares this quarter. Nevertheless, the total land sold within Suryacipta is the highest up to 2Q 2011 so far. Notable transactions were mostly from automotive component industries, followed by warehouse, garment, steel, packaging, pharmacy and plastic industries. kI mitrakarawang witnessed the expansion of their main tenant, astra, with a notable size of five hectares. other small transactions were of recycling and repacking industries, expanding their operation. other sales transactions were by a moulding company, taking 0.5 hectares of land in kota Bukit Indah (Indotaisei), and one automotive company from japan, which bought eight hectares land for their expanded business in kota Bukit Indah (Besland pertiwi). Basically, kota Bukit Indah (Besland pertiwi) only leases their land; however, they would offer an opensell option for their existing long duration tenant. on the leasing front, there are a few industrial estates offering land or industrial buildings for lease. In jakarta, kBN has been specializing in leasing industrial land and buildings and, up to this quarter, there were small leasing transactions mostly from the garment industry, totalling around 1.6 hectares. meanwhile in Bogor, CCIE recorded two leasing transactions from the expansion of a yarn factory and a warehouse. In karawang, kota Bukit Indah (Besland pertiwi) had leasing deals for three industrial buildings for the automotive industry, totalling around 1.5 hectares. the last leasing transactions in our note were the leasing of two textile industries from korea (totalling six hectares), and the expansion of an auto-parts industry from japan of four hectares, all in kujang Industrial Estate in karawang.
indUstrial land prices

two reasons have been the determinant factors for industrial land to keep moving forward. First is the scarcity of land available, and the second is the continued absorption of substantial volume. again, during 2Q 2011 the market still witnessed continuing increases in land prices, where all regions reported price increases during the quarter. on average, land prices on average increased by 15.9% compared to last
greater Jakarta indUstrial land prices
$120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Bogor tangerang karawang Bekasi Serang
quarter, or around an 18.1% increase compared to last years figure. In Bogor, land prices increased by 15.9% q-o-q, up by 18.1% compared to last years figure, due to the price adjustment made by one industrial estate in Sentul area. In tangerang, price increases were mostly due to adjustments made by some industrial estates with limited stock.
US$/sq m
karawang, as one of the most active regions selling industrial land, kept increasing their land price. In this quarter alone, the market has witnessed prices increase by 10.1% q-o-q, up by 26% compared to last year. almost all industrial estates within karawang introduced new prices. Continuing inquiries for industrial land in this region pushed developers to lift land prices. meanwhile, Bekasi saw only a small percentage of land price increase, at only 4.8% q-o-q. this relatively small increase was because the land prices in this area are already higher than other regions. only three industrial estates initiated new land prices during the reviewed quarter. Since 4Q 2010, land prices in Bekasi have risen by 10.6%. price increases in Serang were largely driven by two most active industrial estates, modern Cikande and kIEC. Compared to last quarter, prices rose by 11.2%, mainly from adjustments made by modern Cikande. price increases compared to the last figures of 4Q 2010 were up by 17.6%, in both estates. overall, prices increase for the quarter rose by 11.2% over the previous quarter, while price comparison with previous figures showed an increase of 17.6%.
indUstrial bUilding and rental rates

CCIE in Bogor maintained their leasing tariff for industrial buildings at their current level (i.e. rp32,500/sq m/month). In kota Bukit Indah (Besland pertiwi) and kujang Industrial Estate, both located in karawang, rental tariff for industrial building was set at US$3.00/sq m/ month while tariff for land is US$0.50/sq m/ month.
indUstrial maintenance cost

overall, maintenance costs stood at the same level as last quarter, with the only adjustment made by one industrial estate in Serang area by rp50. this adjustment, because very moderate, maintained the overall average maintenance cost as in 1Q 2011. plans for adjusting maintenance cost tariff will probably materialize by end of this year in one industrial estate in karawang.
p. 23
greater Jakarta indUstrial maintenance costs

$0.10 $0.09 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Bogor tangerang karawang Bekasi Serang
US$/sq m/month
480 offices in 61 countries on 6 continents

United States: 135 Canada: 39 Latin america: 17 asia pacific: 194 EmEa: 95

$1.9 billion in annual revenue 2.4 billion square feet under management Over 15,000 professionals
colliers international indonesia: indUstrial land prices and maintenance costs* World trade Centre 10th 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 floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 faX 62 21 521 1411 Ferry Salanto Division manager, research World trade Centre 10th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 faX 62 21 521 1411
Copyright 2011 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.
region Bogor tangerang karawang Bekasi Serang

*1US$ = rp 8,600
Land price (sq m) Lowest US$ 50.00 US$ 60.00 US$ 65.00 US$ 87.20 US$ 58.10 Highest US$ 174.40 US$ 174.40 US$ 80.00 US$ 130.00 US$ 98.80 average US$ 112.20 US$ 113.30 US$ 68.90 US$ 107.80 US$ 78.5
maintenance Cost (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 US$ 0.03 Highest US$ 0.09 US$ 0.12 US$ 0.06 US$ 0.07 US$ 0.05 average US$ 0.08 US$ 0.07 US$ 0.05 US$ 0.06 US$ 0.04
oUtlook
after hitting the total sale figures of 2010, the industrial market will certainly see the year as the historic highest. Despite a safe position in term of sales, sales activity in the remainder of the year would not be slack, because the market has anticipated significant transactions such as the 20-hectare sales deal between one industrial estate in Bekasi and an air conditioning manufacturer from japan, and several smaller transactions that will invigorate the market at least over the third quarter. the optimism is reflected in the sales target of some developers. one estate in karawang, for example, has stated that their sales up to 2Q 2011 have surpassed their target, where 80% of total transactions have been concluded. Likewise, one industrial estate in Bekasi is very confident about their sales target in the future. key drivers for industrial sales would be similar, i.e. the automotive and related industry will be the prime mover to spur the industrial market. other types of industry predicted to grow over the future will include food industry, consumer goods, pharmaceuticals and logistics. on the investor front, japanese investors will continue to commit to Indonesia, because they control huge businesses in this country. It is interesting to note also the increasing number of korean companies planning to invest in Indonesia, particularly in property businesses. thus far, koreas poSCo (pohang Steel and Iron Corporation) and Indonesias krakatau Steel have signed a joint venture agreement. this synergy will result in the biggest steel production plant and will trigger other plants related to the steel business looking for industrial land.
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2Q 2011

jakarta rEaL EStatE markEt rEport

colliers international indonesia i the knowledge

2008 6.10 11.06 9,672 9.25

2009 4.50 2.78 10,326 6.50

2010 6.1 6.96 9.084 6.50

2011 6.51 1.062 8,7482 6.753

SBI rate (%)

Source: Statistics Indonesia, Finance Department, Bank Indonesia

january - june 2011

eXpatriates hoUsing and apartment sector

indUstrial estate sector

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

cUmUlative sUpply within cbd area (sQ m)

For Strata-title Sale

annUal sUpply vs no of proJects within cbd area

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

oUtside cbd area

For Strata-title Sale

annUal sUpply vs no of proJects within oUtside cbd area

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

sUpply proJection dUring 2011 - 2013

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

space absorption the cbd

tenants acitivities in the oUtside cbd area

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

space available and committed in 2011 - 2012 within cbd area

strata-title for sale

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

asking rental rates, service charge and prices landlords market

average asking rental rates of offices in Jakarta within cbd area

within oUtside cbd area

Colliers International Indonesia - research

rp82,420/sq m/month in 2Q 2011. rental rates in US dollars were relatively flat.

JAKARTA | 2Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

average service charges for office bUilding in Jakarta

price of strata-title for sale for office bUilding in Jakarta

outside CBD (rp)

JAKARTA | 2Q 2011 | THE KNOWLEDGE | APARTMENT SECTOR

list of of completed proJects in 2Q 2011

apartment sUpply of strata-title for sale by region in Jakarta

Central jakarta 13.22%

North jakarta 21.42%

South jakarta 15.51%

JAKARTA | 2Q 2011 | THE KNOWLEDGE | APARTMENT SECTOR

South jakarta average

Colliers International Indonesia - research

JAKARTA | 2Q 2011 | THE KNOWLEDGE | APARTMENT SECTOR

apartment for lease (serviced and Unserviced) sUpply

Colliers International Indonesia - research

occUpancy of apartment for lease in different locations

Colliers International Indonesia - research

performance of apartment for lease in different locations

occUpancy (%) 82.07% 77.71% 70.45%

JAKARTA | 2Q 2011 | THE KNOWLEDGE | APARTMENT SECTOR

Colliers International Indonesia - research

average rental rates of apartment for lease

Colliers International Indonesia - research

JAKARTA | 2Q 2011 | THE KNOWLEDGE | EXPATRIATES HOUSING AND APARTMENTS SECTOR

Expatriate Housing and Apartments

average land prices in several eXpatriate locations

JAKARTA | 2Q 2011 | THE KNOWLEDGE | EXPATRIATES HOUSING AND APARTMENTS SECTOR

apartments sUpply and rental rates