jakarta rEaL EStatE - Colliers International

2Q 2012 i the knowledge

research & forecast report

jakarta REAL ESTATE

Property Sector Overview office sector In the last six months, average asking base rental rates of CBD office buildings with US Dollar tariffs rose substantially by 25% to US$26.60 / sq m / month. In contrast the average asking rental rates for buildings quoted in Rupiah rose by only 13% to IDR143,807 / sq m / month during the same period. This continued upward trend occurred because the amount of available good-quality office space in the CBD is becoming scarce, leaving around 4.1% of office space vacant at the end of the quarter.

apartment sector Over the last one-year period, the average apartment price in the CBD for unsold units has risen by 20% from IDR22.9 to 27.5 million / sq m. This rise was largely triggered by a substantial increase in land prices in the CBD. Nevertheless, most of the new and upcoming apartment projects in the CBD are experiencing good sales. Another location which recorded a YoY increase of 9.5% in price is South Jakarta outside the CBD where apartment prices escalated from IDR17.2 to 18.8 million / sq m. In terms of supply, another 6,168 units of strata-title apartments have been handed over this quarter in DKI Jakarta, bringing the overall number of apartments to 115,928.

eXPATRIATE HOUSING sector The available supply of expatriate-standard housing for the most preferred locations like Pondok Indah, Kebayoran Baru and Kemang is being depleted because a large number of expatriates are moving to Indonesia. Meanwhile, increases in rental rates, ranging from US$100 to 300 per unit per month, were seen in the serviced apartment market.

retail sector After being relatively flat for several periods, the Jakarta retail market finally saw a moderate increase of almost 9% in asking base rental rates as a result of rent adjustments made by shopping malls with high occupancy and by shopping centres with recently completed major renovation. The average asking base rental rate for available typical floors in DKI Jakarta is IDR413,382 / sq m / month.

industrial estate sector Industrial land prices continued to soar this quarter with Serang recording the highest change in the QoQ price at 26%, from an average of US$85.16 to 107.53 / sq m. Bekasi and Karawang also saw a continuing increase in land prices by 6 to 9% this quarter, largely due to the scarcity of land and sustained inquiries. The average YoY increase for land in Karawang and Bekasi was even more substantial, i.e. 85 and 70%, respectively. Overall, land prices in the major industrial areas moved upward by almost 7% QoQ or 32% YoY. As land availability becomes the major issue this year, total sales, were limited to only 30% of the total sales in 2011. Total sales in 2Q 2012 reached 180.2 hectares, mostly fuelled by the sale of 84 ha of land in Kota Bukit Indah.

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jakarta | 2q 2012 | OFFICE

Office Sector

Supply JAKARTA SUPPLY: 1.7 million sq m of office space to enter Jakarta market

Existing Supply

2015F

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2000

sq m

jakarta OFFICE CUMULATIVE SUPPLY

Annual Supply Colliers International Indonesia - Research

The total office space in Jakarta area in 2Q 2012 was 6.48 million sq m of which around 70% is located in the CBD. In this quarter alone, 210,179 sq m of new office space flowed into Jakarta. This figure is the highest over the last two years, much higher than in the previous year. With the first half of 2012 gone, the amount of new office space projected to enter the market in the remainder of the year will be around 350,000 sq m, both in the CBD and outside the CBD.

In the next two years, we expect to witness a significant amount of new office space, particularly during 2014. During 2013 - 2014 it is projected that not less than 1.4 million sq m of new office space will be supplied to the market. The annual supply in 2014 is expected to be the largest in history, despite construction being started on only a few of the projected buildings.

cbd After securing AXA insurance as the anchor tenant. AXA Tower was officially launched. This office tower is part of an integrated development called Kuningan City located in Jalan Satrio and is offered both as strata-title office space and office space for lease. Another office tower officially going into operation during the second quarter is a strata-title office building called Office 8, located in the Senopati area. Thus, the operation of these two buildings contributed another 122,073 sq m of office space during the quarter. Apart from those buildings, two smaller office buildings were also officially launched

p. 2

| Colliers International

during the quarter. 18 Office Park located in the Sudirman CBD (SCBD) consisting of five smallscale towers has recently begun leasing space in one of the buildings (Tower D). Another building operating in 2Q 2012 is Indosurya Plaza (previously known as Exim Melati) in the Thamrin Nine complex. This is an old building being rejuvenated where operations were halted for almost two years. With a new façade and modern look and given its strategic location, this building is trying to compete with other buildings.


CBD annual OFFICE SUPPLY BASED ON MARKETING SCHEME 500,000 400,000

sq m

300,000 200,000 100,000

For Lease

2015F

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

For Strata-title Colliers International Indonesia - Research

With four additional buildings in the CBD, the cumulative supply of office space is registered at 4.50 million sq m. This number will increase to 4.74 million sq m by the end of 2012. It is anticipated that in the three years ahead (2013 - 2015) there will be around 1.23 million sq m of office space of which 60% will be available in 2014. Our supply projections are supported by the construction activities in the field. Office projects scheduled for the remainder of 2012 are expected to be completed as scheduled. This is also the case with office projects scheduled to begin operations in 2013 - 2015 of which some have shown commitment to deliver projects as planned. Menara Prima 2, located in the Mega Kuningan area, is an office tower scheduled to open in 2013 and is 50% complete. A high commitment to deliver projects on time was also shown by three projects scheduled for 2014 at which initial works such as land preparation up to the ground-breaking stage have been started. For example, The Noble House Office Tower project in Mega Kuningan and Wisma Mulia 2 in Gatot Subroto have entered the land preparation stage. The other project is Sahid Sudirman Center which will be one of the biggest office towers along Sudirman providing more than 100,000 sq m of office space. Another project is Life Tower in Jalan HR Rasuna Said. This building is in the process of completing the basement works. Meanwhile, Rasuna Tower which also located in Jalan HR Rasuna Said, due to have redesign, it seems that building will reschedule its completion. Apart from the projects under construction, several projects have been officially announced,

including District 8 and the development of more office towers in the Sampoerna Strategic Square complex in Jalan Sudirman. Meanwhile, the future St. Regis Hotel planned to be built in Jalan Jenderal Jenderal Sudirman was cancelled but the plan for the St. Regis Hotel continues with a new landlord. Together with this hotel development is an office tower next to the future hotel and located in Jalan Jenderal Gatot Subroto. The Mega Kuningan area is a business district with quite a few vacant plots of land compared to other business districts. Besides the plan for The Noble House Office Tower project, one future office project will be developed by Farpoint in Mega Kuningan. There will be more commercial development built in this area given the availability of vacant land. Another potential area where office development could be built is the Rasuna Epicentrum area. Two office towers called Gran Rubina are planned to be built. With all of the under-construction office projects and the planned office towers in the pipeline, the CBD area is anticipating a huge office space supply particularly in 2014. It is very challenging to search for plots of land along Jalan Jenderal Sudirman or Jalan Thamrin, however the potential for new development in the CBD would appear along Jalan Jenderal Gatot Subroto and in the superblock locations like the SCBD, Rasuna Epicentrum and Mega Kuningan. Likewise, secondary roads with quick access to the main thoroughfare in the CBD would potentially become a location for commercial development.

Colliers International |

p. 3


outside cbd The distribution of office development does not only focus on the CBD area. With the current road infrastructure, inadequate public transport and continued escalation of private car use, traffic is the major obstacle to companies opting for a CBD location. Nevertheless, traffic is Jakarta problem but being located in the outside of CBD would at least alleviate the travelling time to the office. Furthermore, several companies do not require the profile and prestige of CBD location, particularly for those in non-service industries like oil and gas, mining or consumer goods. The other factor is

accessibility. Companies in the industrial or manufacturing sector with workshops or factories in the surrounding cities like Tangerang, Serpong, Bekasi and Bogor will most probably find office locations in the outside of the CBD for easier accessibility. Likewise, the plan to entirely connect Jakarta Outer Ring Road (JORR 1) in the middle of 2013 will promote more office development particularly in the western part of Jakarta and most importantly, will shorten the travel time to the airport.

outside CBD annual OFFICE SUPPLY BASED ON MARKETING SCHEME 300,000 250,000

sq m

200,000 150,000 100,000 50,000

2015F

2014F

2013F

2012F

2Q 2012

2011

2010

2009

2008

For Strata-title

1Q 2012

For Lease

2007

2006

2005

2004

2003

2002

2001

2000

0

Colliers International Indonesia - Research

The office market in the outside the CBD area is also anticipating more development in the years to come. During 2Q 2012, two new office towers, i.e. Grand Slipi Tower, known previously as Grand Soho in West Jakarta and Wisma Pondok Indah 3 in South Jakarta, were the newest to contribute a total of 88,106 sq m. The addition of these two office towers brought the cumulative supply in the outside the CBD area to 1.97 million sq m as of 2Q 2012. By the end of 2012, the office market in this area will see further supply of another 120,520 sq m and should this officially open on time, the cumulative supply will reach two million square metres. The remaining office towers projected to be finished this year are all in the final construction stages.

p. 4


In response to growing inquiries for office space in the outside the CBD area, supply is anticipated to significantly grow to almost 700,000 sq m in 2013 - 2015. Of these, around 45% will be offered as office space for stratatitle sale. It is interesting to note that Jalan TB Simatupang will provide the most office development of 444,830 sq m while the remaining supply will be spread out in West Jakarta including GP Plaza, DIPO Business Center, Gallery West and Wisma 77 (Tower 2). In North Jakarta, there will be De Suites and Graha Kirana 2. Meanwhile, South Jakarta will also provide several office towers including Menara Sentraya, Eighty8 Tower B and a newly launched office tower, L’avenue, located in South Jakarta.


tb simatupang As part of the area in South Jakarta, TB Simatupang appears to be enjoying the fastest growth in the outside the CBD area. With continued inquiries for office space mainly derived from oil and gas industries, consumer goods, telecommunications, contractors etc., the TB Simatupang location has lured quite a few developers to build office towers. Currently,

from the launch of Ventura Tower in 1990 to the launch of Plaza Alstom in 2011, there has been 284,948 sq m of office space along TB Simatupang corridor representing around 14% of the total office space in the outside Jakarta area.

Existing Supply

2015F

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2000

sq m

tb simatupang OFFICE SUPPLY

Annual Supply Colliers International Indonesia - Research

Despite no new office space being added during 2Q 2012, 44,020 sq m of office space will commence operations in the remainder of 2012. Nevertheless, the TB Simatupang office market is anticipating a surge in supply in 2013 - 2014 with a total new office space of 339,390 sq m. Several future office towers are concentrated around the Arcadia office complex including Green Kosmo Mansion, 18 Office Park and PHE Tower. PHE is the abbreviation for Pertamina Hulu Energi, the anchor tenant of this building which was previously known as Chitatex Tower. Not far from Arcadia is the planned Oleos Tower.

In the area surrounding the existing Talavera Office Park are Talavera Suite (the extension of Talavera Office Park) and Alamanda Tower. Further west, an integrated commercial complex next to FIF building called South Quarter is now being constructed. Should the projected buildings finish in 2014, the TB Simatupang corridor will register 668,358 sq m of the cumulative office space which will more than double the current total office supply in 2013 - 2014. Traffic congestion will potentially become a drawback for this location.


p. 5


FUTURE office buildings

projected completion time

building name

location

SGA (SQ M)

marketing scheme

status*

CBD AREA 4Q 2012

DBS Tower

Satrio

For Lease and For Strata-title

Under Construction

4Q 2012

18 PARK Tower A

Sudirman

64,000 4,814

For Lease

Under Construction

4Q 2012

World Trade Centre 2

Sudirman

57,000

For Lease

Under Construction

4Q 2012

Tower 1 at The City Center

KH Mas Mansyur

84,000


Under Construction

4Q 2012

18 PARK Tower B

Sudirman

4,570

For Lease

Under Construction

4Q 2012

Perkantoran Setiabudi

Setiabudi

11,000


Under Construction

4Q 2012

18 PARK Tower C

Sudirman

4,441

For Lease

Under Construction

4Q 2012

18 PARK Tower E

Sudirman

4,233

For Lease

Under Construction

1Q 2013

Menara Prima 2

Mega Kuningan

40,000

For Lease

Under Construction

1Q 2014

Life Tower

HR Rasuna Said

30,500

For Lease

Under Construction

2Q 2014

Gran Rubina Tower 1

HR Rasuna Said

40,000

For Strata-title

In Planning

2Q 2014

The Noble House Office Tower

Mega Kuningan

45,000

For Lease

Under Construction

2Q 2014

The City Center (phase 2)

KH Mas Mansyur

34,000

For Strata-title

In Planning

4Q 2014

Menara Pertiwi

Mega Kuningan

40,000

For Lease

In Planning

4Q 2014

Graha Surya Internusa 2

HR Rasuna Said

40,000

For Lease

In Planning

4Q 2014

Mangkuluhur Tower B

Gatot Subroto

39,356

For Lease

In Planning

4Q 2014

Menara Selaras

Sudirman

36,596

For Lease

In Planning

4Q 2014

Sahid Sudirman Center

Sudirman

126,600

For Strata-title

Under Construction

4Q 2014

The City Center (phase 3)

KH Mas Mansyur

34,000

For Strata-title

In Planning

4Q 2014

Rifa 2

Satrio

30,000

For Strata-title

In Planning

4Q 2014

Wisma Mulia 2

Gatot Subroto

70,000

For Lease

Under Construction

4Q 2014

Chase Tower

Sudirman

83,000

For Lease

In Planning

4Q 2014

Gran Rubina Tower 2

HR Rasuna Said

70,000

For Lease

In Planning

1Q 2015

Office Tower @St Regis

Gatot Subroto

90,000

For Lease

In Planning

1Q 2015

Menara Palma 2

HR Rasuna Said

50,000

For Lease

In Planning

2Q 2015

Ciputra World Jakarta 2

Satrio

60,000


In Planning

2Q 2015

International Financial Center 2

Sudirman

40,000

For Lease

In Planning

4Q 2015

District 8

Sudirman

71,545

For Strata-title

In Planning

2Q 2015

Tower 1 at Sampoerna Strategic Square

Sudirman

43,000

For Strata-title

In Planning

4Q 2015

Tower 2 at Sampoerna Strategic Square

Sudirman

118,000

For Lease

In Planning

OUTSIDE CBD AREA (exclude TB SIMATUPANG) 4Q 2012

Blue Green Office Boutique

Meruya

20,000

For Lease

Under Construction

4Q 2012

Eighty8 Tower A

Kasablanka

56,500


Under Construction

2Q 2013

Eighty8 Tower B

Kasablanka

31,000

For Lease

Under Construction

4Q 2013

DIPO Business Park

Slipi

19,600

For Strata-title

Under Construction

1Q 2014

De Suites

Pantai Indah Kapuk

For Lease

In Planning

2Q 2014

Wisma 77 Tower 2

Letjen S. Parman

24,200

For Strata-title

In Planning

2Q 2014

L’Venue

Pasar Minggu

41,597

For Strata-title

In Planning

2Q 2014

Graha Kirana 2

Yos Sudarso

25,000

For Lease

In Planning

2Q 2014

GP Plaza

Slipi

12,204

For Strata-title

Under Construction

2Q 2014

Menara Sentraya

Iskandarsyah

52,072


In Planning

2Q 2014

Gallery West

Kebon Jeruk

22,800

For Strata-title

In Planning

p. 6


8,000


projected completion time

SGA (SQ M)

building name

marketing scheme

status*

TB SIMATUPANG 3Q 2012

Sovereign Plaza

16,020


Under Construction

4Q 2012

PHE Tower (Chitatex Tower)

28,000

For Lease

Under Construction

2Q 2013

Alamanda Tower

33,000


Under Construction

4Q 2013

Talavera Suite

17,172

For Lease

Under Construction

4Q 2013

Green Kosmo Mansion (GKM)

23,000

For Strata-title

Under Construction

4Q 2013

Oleos 2

For Lease

Under Construction

1Q 2014

The Manhattan Square


Under Construction

1Q 2014

Beltway Office Park Tower B

9,600

For Lease

Under Construction

1Q 2014

Gedung Aneka Tambang Tower 2

16,000

For Lease

Under Construction

1Q 2014

South Quarter Tower 1

40,778

For Strata-title

In Planning

2Q 2014

18 Office Park (Cityland Tower)

36,627

For Strata-title

In Planning

2Q 2014


40,778

For Lease

In Planning

4Q 2014


40,778

For Lease

In Planning

4Q 2014

Plaza Oleos

39,778


In Planning

1Q 2015

The Manhattan Square Tower 2

33,440


In Planning

2Q 2015

Signum North Tower

18,000

For Lease

In Planning

4Q 2015

Signum South Tower

54,000

For Lease

In Planning

4,181 37,699

*) Under Construction: where construction activity is in progress, including either foundation or superstructure. Under Planning: no contruction activities on site but all permits have been approved by the Government.


Demand EXISTING DEMAND CBD The activity of tenant expansions has again lifted the overall occupancy performance during the quarter which was recorded at 95.9%, a Y-o-Y increase of 3.4%. During the quarter alone, several operating buildings have recorded an increase in the occupancy level. The amount

of office space being absorbed by these buildings ranged from 1,000 to 6,000 sq m. Leasing activities were mostly dominated by mining, oil and gas, IT, shipping and cargo, insurance and finance-related industries.

4,500,000

100%

3,600,000

80%

2,700,000

60%

1,800,000

40%

900,000

20%

Cumulative Supply

Cumulative Demand

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

0% 2001

0 2000

sq m

cumulative supply, demand and occupancy of office space in the cbd

Occupancy (%) Colliers International Indonesia - Research


p. 7


The better performance of occupancy rates during the quarter was also fuelled by the performance of newly operating office buildings with high pre-commitment levels before they

are in operation. AXA Tower, 18 Park (Tower D) and Indosurya Plaza operate with high occupancy and this helped to maintain the overall occupancy level during the quarter.

OUTSIDE THE CBD The overall occupancy for outside the CBD area registered a slight increase compared to the previous quarter, moving upward to 92.4%. Some buildings scattered in East, North and South Jakarta registered higher occupancy

which helped to lift the overall modest occupancy level. The limited supply of office space in East and North Jakarta was the reason for the occupancy rate increase.

sq m

cumulative supply, demand and occupancy of office space in outside the cbd 2,000,000

100%

1,600,000

80%

1,200,000

60%

800,000

40%

400,000

20%

Cumulative Supply

Cumulative Demand

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

0% 2000

0

Occupancy (%) Colliers International Indonesia - Research

tb simatupang Some old buildings (built during the 90s) experienced a slowdown in occupancy.

Compared to the previous quarter, occupancy slowed by around 3.7% to reach 92%.

PRE-COMMITTED DEMAND During 2012 there will be 378,131 sq m of new office space of which around 80% has been absorbed. The remaining six months ahead will be a lot easier for buildings scheduled in 2012 to continue their peak performance. The next year will be a tough year to find new office space as only limited space will be available, however, the period of 2014 - 2015 will be quite challenging for the office market given the huge projected supply. None of these office projects expected during that period has confirmed precommitted demand. What is available during 2012 in the outside the CBD area of 227,396 sq m has been 55% secured. In the remaining six months, the

p. 8


search for tenants will continue. Most absorption in 2012 occurred in buildings located along Jalan TB Simatupang. In 2013, the total projected office supply of 127,953 sq m has been 26% absorbed and most absorption was experienced by strata-title office buildings. The big challenge will occur in 2014 when a significant 447,911 sq m of office space is projected to be finished. Of the total supply, less than 2,000 sq m has been committed so far. Office buildings projected to be finished in 2014 will be facing a very challenging situation, particularly those located in Simatupang because more than half of the office space will be in this location.


space available and committed in 2011 - 2014 cbd

outside cbd

Space Absorbed

Annual Supply

Space Absorbed

2014F

2014F

2013F

2013F

2012F

2012F

2011

2011 0

250,000

500,000

750,000

0

250,000

sq m

Annual Supply

500,000

750,000

sq m Colliers International Indonesia - Research

Rental Rates, Service Charge and Prices RENTAL RATES: US$27.43/sq m/month Around 22 buildings quoting rents in Rupiah adjusted their base rents upward in the range of IDR10,000 to 50,000 per sq m per month. During the quarter. This brought the average rental rates for buildings quoting Rupiah rent to climb by 7.2% to IDR143,807 for all class of buildings in the CBD. Similarly, with 18 buildings announcing new rental rates ranging from US$1.00 to 12.00 , the average US dollar rent also moved upward Q-o-Q by 13.8% to an average of US$26.60 per sq m per month. In recent times, landlords are generally aware that the office market is peaking due to limited supply and this psychologically led quite a few landlords to test the market by adjusting base rental rates close to the market rate.

Albeit moderately, a similar trend was also shown by offices in the outside the CBD area. An increase of 5.1% brought the average rental rates for Rupiah denominated buildings to IDR99,610 per sq m per month. The increase was triggered by some office buildings asking for higher rates of between IDR15,000 and 20,000. On a regional scale, South Jakarta fetched the highest average rental rates of IDR121,872 per sq m per month given the higher quality of most buildings in this area, particularly buildings in the TB Simatupang area.

average asking rental rates in jakarta Rp276,000

$30.00

Rp230,000

$25.00

Rp184,000

$20.00

Rp138,000

$15.00

Rp92,000

$10.00

Rp46,000

$5.00

Rp-

$0.00 Premium

Grade A Rp

Grade B

Grade C

US$ Colliers International Indonesia - Research


p. 9


service charge Though several buildings did renovation work, service charges remained stable during the quarter. The average service charge was only raised by IDR545 to 55,631 per sq m per month

in the CBD. Meanwhile the service charges in the outside the CBD was IDR42,593 per sq m per month and only climbed by IDR1,145 over last quarter.

strata-title office space for sale CBD The absorption level of strata-title office space in the CBD reached 96.9% as of 2Q 2012. Consequently, with limited strata-title office space being available, the price continues to move upward. Compared to last year, the price of strata-title office space has gone up 21.5%

while the price under Q-o-Q review went up by 7.8%. The average price of strata-title office space sold at the US Dollar rate was US$2,867 per sq m while that in Rupiah were offered at an average of IDR25.8 million per sq m.

outside CBD The overall take-up rates of offices outside the CBD area dropped substantially from 94.6% to only 83.8% in 2Q 2012. The operation of new and sizeable office buildings during 2Q 2012 with relatively low take-up rates changed the overall absorption performance. In term of strata-title office space price per square metre,

a significant jump was recorded Q-o-Q to IDR2.76 million which put the average price at IDR20.9 million per sq m. Most of operating strata-title buildings adjusted the price in the range of IDR1 to 4 million while some others have confidently raised the price between IDR7 and 11.5 million.

Outlook The absorption rates of office space is projected to mildly increase at least until 2013 because new supply in the CBD is very limited during that year. The types of industry which drive this sector will remain, i.e. banking, insurance, oil and gas and the mining and natural resources business. However, a challenging situation will occur both in the CBD and in the non-CBD areas because a significant number of new office space is projected to come on stream. Again, the rents showed an upward trend Q-o-Q with buildings quoting US Dollar rates experiencing a significant climb. To date, the

p. 10


market is very confident because quite a few developers are trying to adjust rental tariffs to rival the average market. Buildings with very high occupancy rates are even arbitrarily setting their new prices with the confidence that the market will absorb the office space. The continuing adjustment in the office rents would open more opportunity for the sales of strata-title office space. In the long term, owning office space will be very attractive and this is shown by the good performance of strata-title office space sales.

jakarta | 2q 2012 | apartment

Apartment Sector Apartments For Strata-title Sale

Supply As of the end of June 2012, a total of 13 towers at nine projects, totalling 6,168 units, have been handed over during 2Q 2012. This quarter’s additional unit supply almost doubled, up by 44% from the previous quarter. It was even the highest supply of the last three years, bringing the total cumulative supply of strata-title apartments to 107,944 units. Approximately 68% of this quarter’s supply came from brand new developments, including Belmont

Residence (Tower Everest), St. Moritz (The Royal Suite Tower), Senopati Suites, Residence 8 at Senopati (Towers 2 & 3), Cervinno Village, Menteng Square (Three Towers) and Denpasar Residence (Tower Kintamani). The remaining 32% came from subsequent phases (additional towers) of current projects such as Seasons City (Tower C) and Green Palace Apartment (Towers R & T).

LIST OF completed project in 2Q 2012

region

#units

Belmont Rseidence (Tower Everest)

apartment name

Kebon Jeruk

location

West Jakarta

553

St. Moritz (The Royal Suite Tower)

Puri Indah

West Jakarta

220

Seasons City (Tower C)

Latumenten

West Jakarta

Green Palace (Towers R & T)

Kalibata

South Jakarta

1,260

Senopati Suites

Senopati

South Jakarta

103

Residence 8 at Senopati (Towers 2 & 3)

Senopati

South Jakarta

650

Cervinno Village

Kasablanka

South Jakarta

Menteng Square (3 Towers)

Matraman

Central Jakarta

Denpasar Residence (Tower Kintamani)

Satrio

CBD

714

518 1,600 550


As shown on the table, the majority of newlybuilt apartment units are located in South Jakarta, accounting for 41% of the total stock,

followed by Central and West Jakarta at 26 and 24%, respectively. Meanwhile, the CBD only contributed 9% of the 2Q 2012 supply.

SUPPLY DISTRIBUTION OF STRATA-TITLE APARTMENTS IN jakarta by region West Jakarta 25.5%

CBD 18.7% Central Jakarta 13.1%

East Jakarta 5.5%

North Jakarta 18.9%

South Jakarta 18.2% Colliers International Indonesia - Research

Overall, West Jakarta remained the largest provider of strata-title apartment units, followed by North, CBD and South Jakarta which contributed around 18% of the total stock. East Jakarta remains the area which provides the

least number of units since only a few areas so far are suitable for apartment development and close to business areas like Cawang, Cakung and MT. Haryono.


p. 11


The continued flow of supply to the market reflects a rosy situation for the apartment market in the future. Developers keep building new projects and some are offering sequels to their existing projects. This can be seen at Residence 8 at Senopati (Phase 2) and Senopati Suites 2 which recorded sales rates 98 and 100%, respectively. During this quarter, Jakarta’s apartment market saw a mass of newly-launched projects, most of them located in West Jakarta. Madison Park

and Metro Park Residence (both developed by Agung Podomoro Group); Green Central (Tower Cerberra), St. Moritz (The New Presidential Tower) and Giannetti Apartments will add a total of 3,671 units to the stock in West Jakarta in the two to three years ahead. Meanwhile, Pluit Seaview (Tower Belize) and Royal Olive Residence (previously planned as El Medina Apartments) will add another 300 and 225 units to North Jakarta and South Jakarta stock, respectively.

newly - launched apartments in 2Q 2012

apartment name

location

region

#units

Madison Park

Tanjung Duren

West Jakarta

1,400

Metro Park (2 Towers)

Kebon Jeruk

West Jakarta

1,200

Pluit Seaview (Tower Belize)

Pluit

North Jakarta

300

Green Central (Tower Cerberra)

Gajah Mada

West Jakarta

420

Royal Olive Residence (Tower I)

Buncit Raya

South Jakarta

225

St. Moritz (The New Presidential Tower)

Puri Indah

West Jakarta

151

Giannetti (2 Towers)

Kemanggisan

West Jakarta

500


West Jakarta, South Jakarta, and North Jakarta remains the favourite locations for apartment projects for upcoming years since the land prices are relatively affordable (for middle-class projects) and vacant land in certain locations is still available compared to the CBD and Central Jakarta.

The apartment market will see more condotels (condominiums for sale but operated like a hotel). In the next three to five years, several projects are scheduled to go into operation under several hotel brands like Aston, Best Western, Swiss-Belhotel, Citadines and Wyndham.

condotel projects in

apartment name Aston Rasuna

operator

status

Aston

Operates

Citadines Rasuna

Citadines

Under Construction

The Bellevue

Best Western

Under Construction

The Hive Tamansari

Best Western

Under Construction

Grand Whiz The Park Residence

Whiz

Under Construction

Woodland Park

Swiss-Belhotel

Under Construction

Wyndham The H Residence

Wyndham

Under Construction

Aston Titanium Square

Aston

In Planning

Aston Sentra Timur Residence

Aston

In Planning

Aston D’Batavia

Aston

In Planning Colliers International Indonesia - Research

Aston leads with 40% of the ten projects followed by Best Western with 20%. Meanwhile Citadines, Whiz, Wyndham, and Swiss-Belhotel

p. 12


have only one property each in the CBD, North Jakarta and East Jakarta respectively.


condotel projects based on operator

Wyndham 10%

SwissBelHotel 10%

based on region

Aston 40%

East Jakarta 40%

CBD 20% Central Jakarta 10%

Whiz 10%

Citadines 10%

South Jakarta 20%

North Jakarta 10%

Best Western 20%


By region, East Jakarta leads with 40% of the condotel projects operating in this area while South Jakarta and the CBD each have 20% of this market. Two of the four condotel projects in East Jakarta are located in the Cawang area. Cawang is becoming a promising area since it is at the intersection of the industrial area in Bekasi and the downtown. Meanwhile, Jalan MT Haryono (partially located in Cawang area) has been the location for commercial and highrise residential development where existing

strata-title apartment projects have good absorption rates. Condotels and condominiums are both sold with a strata-title. Unlike the usual condominiums, condotels are operated as a hotel with a registration desk, cleaning service and fully furnished. Also the management and design that a condotel provides is as good as the hotel standard.

Demand During the second quarter of 2012, the take-up rate for all marketed projects demonstrated good performance. This was evidenced by an increase in the cumulative take-up rate in Jakarta’s apartment market compared to the previous quarter. The CBD area continued to

have the highest absorption as well as an increase in demand QoQ. Furthermore, the overall sales of apartments in 2Q 2012 in Jakarta was at 78.2%, an increase of 0.5% over the previous quarter.

average take-up rates in different region rEGION

1Q 2012

2Q 2012

CBD

82.6%

85.6%

South Jakarta

79.7%

79.7%

Outside CBD

77.9%

78.6%

Q-o-Q 3% 0.7%


The increasing performance of sales activities since the end of 2011 is in line with developers’ confidence to launch their new apartment projects. Overall pre-commitment sales of projects under construction showed an upward

trend for CBD locations, while other locations reported a slight decrease in the pre-sales. In general, the influx of new apartments could not counterbalance the speed of sales.


p. 13


take-up of pre-sales apartments in different regions rEGION

1Q 2012

2Q 2012

Q-o-Q

CBD

67.8%

70.3%

2.5%

South Jakarta

67.4%

64.2%

3.2%

Outside CBD

65.3%

64.7%

0.6%


comparison of take-up rates between existing and pre-sales apartments take-up

1Q 2012

2Q 2012

Q-o-Q

Existing

89.1%

91.0%

1.9%

Pre-Sales rate

66.3%

65.3%

1.0%


The slight increase was mainly triggered by the good sales of newly completed projects. The operating strata-title apartments in South Jakarta experienced the highest take-up rates, especially those located within Kebayoran Baru

and Senopati areas. For some time, these areas have been favourite locations for residential projects because they are close to the Jakarta Central Business District.

take-up of operating apartments in different regions rEGION

1Q 2012

2Q 2012

Q-o-Q

CBD

96.0%

96.5%

0.5%

South Jakarta

90.2%

92.9%

2.7%

Outside CBD

87.0%

89.0%

2.0%


Asking Price An adjustment to the asking price of strata-title apartments was made in order to separate the prices of existing apartments and apartments under construction. For this purpose, our average price will be adjusted and will only encompass prices of unsold apartments and apartments under construction but which have been offered on the market. The low cost apartments or rusunami will be excluded from this average because they does not represent the overall market price, particularly with the escalation of land prices in Jakarta. In general, asking prices for apartment units in Jakarta experienced an upward trend, largely due to active construction progress and good

p. 14


sales performance during 2Q 2012. The increase was also triggered by newly-launched projects which offered good building quality, more complete facilities, unique concept and a modern style of building. During 2Q 2012, the CBD area maintained the highest asking price for apartment projects, registering IDR27.51 million/sq m, up by 6.1% from IDR25.92 million/sq m previously. South Jakarta and the Non-CBD area, which have more moderate increases than in the CBD, are registering IDR18.85 and 15.05 million/sq m or up by 5.48% and 4.04%, respectively compared to the previous quarter.


asking prices for apartments in jakarta IDR 30,000,000 IDR 25,000,000 IDR 20,000,000 IDR 15,000,000 IDR 10,000,000 IDR 5,000,000 1Q 2011 CBD

2Q 2011

3Q 2011

South Jakarta

4Q 2011 Non CBD

1Q 2012

2Q 2012

Average Colliers International Indonesia - Research

average asking price in different regions region

Average asking price in IDR/sq m 1Q 2012

Q-o-Q

2Q 2012

CBD

25,921,725

27,509,319

6.1%

South Jakarta

17,873,998

18,852,720

5.5%

Outside CBD

14,470,974

15,055,464

4.0%

Average

18,187,738

19,012,947

4.5%



p. 15


Apartment For Lease (Serviced and Non-serviced)

Supply No new apartments for lease (serviced or nonserviced) were launched between April and June. Meanwhile, the supply was reduced due to Puri Apartments, located in West Jakarta, temporarily ceasing operations to renovate and improve the interior of their apartments. Consequently, Puri Apartments comprising 72 units of non-serviced apartments and 23 units of serviced apartments, terminated the occupancy of all remaining tenants this quarter. After having been in operation for 17 years, the management made the decision in order to compete and to become the first destination

location in West Jakarta for the expatriate market. Because of this, the total cumulative supply for both serviced and non-serviced apartments dwindled to 7,984 units, a decrease of 1.2% from the 8,079 units in the prior period. After all, the number of apartment for lease projects is expected to grow, especially in the CBD area. Colliers International Indonesia recorded that as many as four projects, comprising 791 units, mostly are in the under construction phase.

LIST OF future APARTMENTs for lease projects

apartment name

location

region

Category

#units

Plaza Senayan (Tower c & D)

Senayan

CBD

Non-serviced

217

Ascott Kuningan

Satrio

CBD

Serviced

186

Somerset Kentjana

Pondok Indah

South Jakarta

Serviced

188

Frasers Suites

Satrio

CBD

Serviced

200


cumulative supply of apartment for lease (serviced and non-serviced) 6,000 5,000

U nit

4,000 3,000 2,000 1,000 0 2005 2006 2007 2008 2009 2010 Serviced

2011

1Q 2012

2Q 2012F 2013F 2014F 2015F 2012

Non-serviced Colliers International Indonesia - Research

Demand In line with the expanding business of multinational firms and rising inflow of foreign investment, leasing inquiries from expatriates were seen to rise in 2Q 2012. The overall market for leasing (serviced and non-serviced) apartments recorded an upward trend to an average 80.1% after a lower performance of 75.1% in the previous quarter. Expatriates from foreign or multinational firms continued to dominate the demand for serviced apartments,

p. 16


while local renters dominated the non-serviced apartment market. Of the apartments for lease, the non-serviced apartment category experienced the largest increase in occupancy of 6.8% from the previous quarter to an average 80.6%, due to short-term increasing demand from local government institutions having training and seminars.


comparison of occupancy on serviced and non-serviced apartments occupancy

1Q 2012

2Q 2012

Q-o-Q

Serviced

77.6%

79.1%

1.5%

Non-Serviced

73.8%

80.6%

6.8%


Demand from corporations is mainly generated in the South Jakarta area, which is also known as a favoured location for expatriates due to its proximity to international schools, hospitals, retail centres, and business centres. Benefiting from the good ambience with big shade trees and its proximity to the downtown, this area remains the most preferred location particularly by western expatriates and wealthy Indonesians.

After more than a year of construction on the flyover project which connects Antasari and Blok M, the apartment buildings located around that project, such as Taman Kemang Jaya, Griya Prapanca, and Luxury Kemang have been quite active and recorded a positive trend.

average occupancy at apartments for lease in all regions rEGION

1Q 2012

2Q 2012

QoQ

CBD

84.4%

85.5%

1.1%

South Jakarta

76.2%

84.1%

7.9%

Outside CBD

66.5%

72.9%

6.4%


Lease transactions are expected to continue to increase in line with the improving national economy. From our survey, quite a few serviced and non-serviced apartment landlords conveyed their optimism that the market will be better

given that they have achieved pre-commitment leases from new tenants. In the short term, the terms of lease will benefit from school holidays as well as business travellers coming to Jakarta.

Rental Rates We upgraded the methodology analysis of rental rates for apartments for lease. Apartments for lease are managed for rental only and are divided into two types i.e. serviced apartment and non-serviced apartments. The focus of the report will place more emphasis on the CBD area and South Jakarta area. This is mainly because these two areas are the most preferred locations for expatriates. In addition, the majority of apartments for lease are mostly found in these two areas.

During 2Q 2012, some serviced apartments, mostly in the CBD area, increase their rental rates by a minimum of US$50.00 to a maximum of US$300.00/unit/month. This was mainly due to the increase in operational costs and because of the adjustment made following the market trend. Meanwhile, rental rates of nonserviced apartments both in the CBD and NonCBD remained stable. Serviced apartments in the CBD have average rental rates of US$27.57/ sq m/month, while in the Non-CBD area including South Jakarta they are US$21.29/sq m/month.


p. 17


average asking rental rates based on region region

serviced

non-serviced

CBD

US$27.57

US$16.48

Non-CBD

US$21.29

US$12.40


Apartments for lease in the CBD area have the highest asking rents of US$23.87/sq m/month modestly increasing compared to the prior period, while in the Non-CBD area including

South Jakarta, rents for apartments for lease moved upward mildly to US$14.89/sq m/ month.

average rental rates of apartment for lease (serviced and non-serviced)

R ental Rate/sq m/month

$26.00 $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 2Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 CBD

Non CBD Colliers International Indonesia - Research

Outlook Several indicators like the increase in sales and apartment prices have indicated that the market for apartments has improved. Compared to the last two years, apartment prices have increased quite significantly, particularly those located in the strategic commercial area. In particular, those within the CBD or in proximity to the downtown have experienced the greatest increase mainly due to substantial escalation in land prices. Recently, the price of apartments under construction could be double that of the initial price in one to two years time. On the other hand, sales of apartments have grown gradually following the confidence in the country’s investment prospects. This is by

p. 18


evidenced the sales performance of each under construction project where pre-commitment sales are recorded in high numbers. Other indicators which are influencing this vibrant market are the influx and interest of foreign investors looking to acquire development projects. On the other hand, it is quite challenging to find motivated enbloc sellers in such a conducive investment climate. Such investors would aim at certain locations where the leasing market is strong, in particular, the CBD and parts of South Jakarta which are either close to downtown or to international schools.

jakarta | 2q 2012 | residential expat housing

Residential Expatriate Housing Sector Expatriate Housing

Supply and Rental Rates South Jakarta is so far irreplaceable as an expatriate home location as it provides comprehensive facilities for expatriate needs such as an international school, international clubs, international hospital, entertainment centre, shopping spots, offices and other points of interest. Expatriates with children would rather endure longer travel times to their office locations as long as their children’s schools are close to their homes. Thus housing within the catchment of the international school is in high demand. Nevertheless, there are a very limited number of houses that meet expatriate standards. In order to meet those requirements, many houses in favourite locations such as the Kemang, Cipete and Cilandak areas, are doing renovations and refurbishment. Furthermore, landlords are willing to demolish their old houses to build more modern ones with better design and building materials to increase their competitiveness as well their rental rates.

For the reasons mentioned above, there are a few high-quality houses within the preferred location that have adjusted their average asking rental rates during the first half of the year. Typical houses are offered at a slightly higher monthly rent, ranging from US$2,500 (for a three-bedroom house) to the highest US$7,000 (for a four- to five-bedroom house). Even in certain areas like Menteng, Kebayoran Baru and Pondok Indah, the landlords are asking exceptionally high rents up to US$15,000 per month. The Menteng area, which is close to the CBD and where the stock of good quality expatriate housing is limited, has the widest range of rental rates, from US$4,000 - 15,000 per month. This is mainly because there are some small or older houses which are still available on the market. The table below gives a brief description of average land prices in some preferred expatriate locations.

average land prices in several expatriate locations locations

average land price/sq m in idr

in us$ (equivalent)

Kuningan

21.4 million

2,490

Kebayoran Baru

19.3 million

2,240

Menteng

19.1 million

2,220

Pondok Indah

17.6 million

2,050

Permata Hijau

15.7 million

1,830

Kemang

8.4 million

980

Cipete

7.4 million

860

Pejaten

7.3 million

850

Cilandak

6.5 million

760 Colliers International Indonesia - Research


p. 19


expatriate housing rental rates locations

size (sq m)

rental rates (in us$/unit)

Kuningan 4 - 5 Bedroom House

500 - 900

3,500 - 11,500

600 - 1,500

4,500 - 15,000

250 - 700

3,500 - 8,000

500 - 1,200

4,000 - 15,000

550 - 1,000

4,500 - 15,000

400 - 1,500

3,500 - 12,000

220 - 240

2,750 - 4,500

4 Bedroom Townhouse/complex

400 - 700

3,500 - 5,500

3 Bedroom House

400 - 750

3,000 - 5,000

550 - 1,000

3,500 - 7,000


200 - 300

2,500 - 3,500


400 - 700

3,500 - 6,000

3 Bedroom House

300 - 500

2,500 - 3,500

4 - 5 Bedroom House

400 - 800

3,500 - 7,000


400 - 600

3,500 - 7,000

4 Bedroom House

500 - 900

3,000 - 7,000


300 - 700

3,500 - 6,500

3 + 1 Bedroom House

300 - 600

3,000 - 5,500

4 - 5 Bedroom House

450 - 750

3,500 - 7,000

Kebayoran Baru 4 - 5 Bedroom House 3 - 4 Bedroom Townhouse/complex Menteng 4 - 5 Bedroom House Pondok Indah 4 - 5 Bedroom House Permata Hijau, Simpruk 4 - 5 Bedroom House 3 - 4 Bedroom Townhouse/complex Kemang

4 - 5 Bedroom House Cipete

Pejaten

Cilandak


Demand On the demand side, there were no changes in the type of industries that were looking for expatriate-standard housing. Several lines of businesses such as oil and gas, consultants (PwC, ABB), and the World Bank were active

p. 20


during the first half of 2012. To date, demand for expat housing has been increasingly high but the supply rates grew slower as stock is limited.


Apartments

Supply and Rental Rates For the first half of 2012, the average rental rates for selected expatriate apartments have shifted upwards. Overall, most increases occurred in the serviced apartment market ranging from US$100 - 300 per unit per month. In general, rental tariffs for non-serviced apartments remain relatively flat, except for apartments for expatriates in high demand, like Pakubuwono Residence and Dharmawangsa Residence. Such projects are very confident that they can raise the rent by at least an additional US$500 per unit.

On the fringe of the CBD, the Senopati Suites project will become a preferred location for expatriates. Besides its instant access to the CBD, this apartment complex provides large units, a barbeque area and other facilities. Below is a table providing information on the rental rates in the selected apartment complexes for expats based on number of bedrooms and location.

rental rates of selected apartment projects in the expatriates location locations

size (sq m)

rental rates (us$/unit) serviced

non-serviced

Sudirman 2 Bedroom Apartment

119 - 121

3,800 - 5,500

2,500 - 4,000

3 Bedroom Apartment

156 - 238

4,400 - 6 300

3,500 - 5,000

4 - 5 Bedroom Apartment

236 - 513

-

4,000 - 8,000

2 Bedroom Apartment

95 - 145

2,750 - 4,250

2,000 - 2,500

3 Bedroom Apartment

96 - 323

3,200 - 4,400

2,500 - 4,000

Kuningan

Kebayoran Baru 2 - 3 Bedroom Apartment

120 - 350

-

1,750 - 4,000


400 - 500

-

5,500 - 7,000

Menteng 2 Bedroom Apartment

112 - 142

-

2,000

3 Bedroom Apartment

147 - 213

-

2,200 - 3,500

83 - 190

2,700 - 3,100

2,000 - 2,500

3 Bedroom Apartment

190 - 300

3,400 - 4,500

2,800 - 3,500


285 - 500

5,250 - 5,750

3,500 - 4,000

225 - 300

3,000

2,700 - 4,000

165 - 200

-

2,500 - 3,500

220 - 295

-

3,500 - 5,000

262 - 300

-

3,450 - 3,950

Pondok Indah 2 + 1 Bedroom Apartment

Permata Hijau, Simpruk 3 - 4 Bedroom Apartment Kemang 3 Bedroom Apartment Cipete 3 - 4 Bedroom Apartment Cilandak 3 Bedroom Apartment



p. 21


Occupancy Upper-class apartments generally had high occupancy of between 79 and 95%. This figure was somewhat stable compared to what was achieved in the previous semester. The most

preferred areas are still in the CBD or areas close by, rather than South Jakarta, such as Ascott and Shangri-La Residence.

average occupancy rate of selected apartments preferred by expatriates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% A

B

C

Notes: A: Dharmawangsa, Shangri-La, Airlangga, Pakubuwono 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

p. 22


D

E

average


jakarta | 2q 2012 | retail

jakarta jakarta retail cumulative supply 5,000,000

sq m

4,000,000 3,000,000 2,000,000 1,000,000

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0


The Jakarta retail market again saw no additional retail space this quarter. Despite reaching the final stage of construction, six retail centres which are projected to bring new supply in 2012 have not been completed. One of the projected developments is eXion Mall located within the Kemang Village complex. A hypermarket opened last year but the mall will only be officially launched in October 2012. Similarly, a big mall in the Kasablanka area, South Jakarta is speeding up construction to hasten its completion. This more than 100,000 sq m mall will officially open in the first month of 3Q 2012. The other retail centre is Pulomas

Xventure which will feature the entertainment attraction like labyrinth jungle, bumper boats and flying fox within the mall. Another mall showing commitment to open as scheduled is Ciputra World (now known as Lotte Shopping Avenue after being entirely leased by Lotte). This mall is finishing work on the façade as a final preparation before opening soon. With no new malls entering the market, the total supply of retail space in Jakarta was 4.04 million sq m in 2Q 2012. This number is similar to the previous quarter.

jakarta retail cumulative supply based on region 1,200,000 1,000,000 800,000 sq m

600,000 400,000 200,000

CBD

Central Jakarta

South Jakarta

North Jakarta

East Jakarta

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

0 2000

Retail Sector

Supply

West Jakarta


Overall, from 2000 through 2011, the average Jakarta retail supply showed an annual growth of 12.2%. This growth demonstrated additional supply of 249,593 sq m per year during the

period. With 282,827 sq m of new retail supply entering the market in 2012, it will maintain an average growth above 200,000 sq m per year.


p. 23


Based on region, the retail supply in West Jakarta showed the lowest average growth at 6.5% per year between 2000 and 2Q 2012. After Central Park in 2009, there were no new malls opened and the cumulative supply stayed at 597,210 sq m. New retail space will only become available in 2013 with the opening of St Moritz Mall. In the South Jakarta area, Kota Kasablanka Mall and eXion Mall at Kemang Village are expected to operate in the future. Another mall is Pondok Indah Street Gallery, which is an extension of Pondok Indah Mall 1 on which construction started last year. Should these future malls open, they will contribute 175,152 sq m new supply. Since 2010, there have been no new malls completed in North Jakarta. The total supply stayed at 935,199 sq m and there will be no new supply in North Jakarta up to the end of 2012. The only future mall in the region will be The Baywalk at Green Bay providing 52,000 sq m of new retail space in 2013. Although East Jakarta had the smallest cumulative supply as of 2Q 2012, i.e. 299,348 sq m, the region showed growth of 14.6% per year from 2000 to 2Q 2012. After two smallscale retail centres came onto the market with a total of 22,663 sq m in 2010 - 2011, Pulomas XVenture and Cipinang Indah Mall are anticipated to bring 45,200 sq m of new supply in two years. Central Jakarta, which covers retail areas like Menteng, Gajah Mada, Senen and Tanah Abang showed 18.2% average growth from 2000 to 2Q 2012. The golden age of the retail supply in Central Jakarta occurred from 2002 to 2005 when there was 566,173 sq m. The total supply for the region was 747,410 sq m as of 2Q 2012.

p. 24


However, due to limited land, no new retail centres have been opened in Central Jakarta since last year. It seems that the trend will continue until the end of 2014. Unlike Central Jakarta, the scarcity of vacant land currently does not impact the influx of retail supply in the CBD. The total cumulative retail space was 719,593 sq m in 2Q 2012, reflecting an annual growth of 12.8%. The latest shopping centre was Kuningan City Lifestyle Mall in late 2011. Ciputra World Mall in Jalan Satrio is projected to open in the second semester of 2012. Several under-construction retail centres projected to enter the market in 2013 are rushing their work progress to meet the completion schedule. Cipinang Indah Mall and The Baywalk at Green Bay Pluit have almost completed the construction of building structures. Meanwhile, only just starting work on the basement, St Moritz Mall confidently stated that they will be completed next year. These future malls will add another 129,200 sq m of retail space in Jakarta. Apart from construction activities, other issues like supply reduction will occur in Jakarta. A retail centre located in Tendean, South Jakarta, will close in the next quarter of 2012. The landlord is planning an apartment development and will replace the mall which has been in operation since 2002. Another supply reduction will probably happen in one year. A mall located in Jalan Thamrin will cease operations and as a result, an office tower is planned to replace the existing mall. Still around the Thamrin area, a retail centre which has been in operation since 1962 is planned to be revamped. Later on the landlord will extend its leasable area and the whole compound will remain as a commercial centre with a hotel.


LIST OF future shopping centres in jakarta

shopping centres name

location

nla

Region

status

(sq m)

2012 Kota Kasablanka

Kasablanka

South Jakarta

110,000 Under Construction

eXion Mall Kemang Village

Antasari

South Jakarta


Ciputra World Jakarta

Satrio

South Jakarta


Menteng Square

Proklamasi

Central Jakarta

Pulomas X’Venture

Pulomas

East Jakarta

4,475

Under Construction

25,200

Pondok Indah Mall Street Gallery

Pondok Indah

South Jakarta

Under Construction

9,100

Under Construction

Cipinang Indah Mall

Cipinang

The Baywalk @Green Bay Pluit

Pluit

East Jakarta

20,000

Under Construction

North Jakarta

52,000

St. Moritz

Under Construction

Puri Indah

West Jakarta

129,200

Under Construction

Mall at the City Centre

KH Mas Mansyur

Central Jakarta

35,000

Under Planning

The Gateway

Pondok Gede

East Jakarta

10,000

Under Planning

Pantai Indah Kapuk Mall

Pantai Indah Kapuk

North Jakarta

30,000

Under Planning

Pondok Indah

South Jakarta

40,000

Under Planning

2013

2014

2016


bodetabek bodetabek retail cumulative supply 3,000,000 2,400,000 sq m

1,800,000 1,200,000 600,000

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

0 2000

Pondok Indah Mall 3


Cimanggis Square is the latest shopping centre in the Jabodetabek area and there will be no new retail centres afterwards in the outside Jakarta area (Bodetabek). Two retail centres in Tangerang, Mall Bale Kota and Alam Sutera shopping malls will only be completed at the end of 2012.

The absence of new shopping centres maintained the cumulative supply in Bodetabek area at 1.93 million sq m however, this area is still perceived as a potential area for the retail market to grow. Today, there are several areas with growing business and residential areas in the outside of Jakarta which have potential for retail businesses.


p. 25


In Bekasi, there will be 138,285 sq m of new retail centres projected to be completed in 2013 and as of this quarter, all retail centres are reported to have reached the final stages of construction. In 2Q 2012, some shopping malls were

hastening construction to meet their completion dates. Some of these malls are Cibinong Citymal in Bogor and four retail centres in Bekasi including Bekasi Junction, Grand Metropolitan Mall and Grand Galaxy Mall while the extension of Citra Gran Mall is scheduled for completion in early 2013.

bodetabek cumulative supply based on region 1,200,000 1,000,000

sq m

800,000 600,000 400,000 200,000

Bogor

Depok

Tangerang

2014F

2013F

2012F

2Q 2012

1Q 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

Bekasi Colliers International Indonesia - Research

LIST OF future shopping centres in bodetabek


location

Region

nla (sq m)

status

2012 Shopping Mall at Alam Sutera

Alam Sutera

Tangerang


Mall Balekota

Tangerang

Tangerang

25,000

Under Construction

Grand Galaxy Mall

Bekasi

Bekasi

23,000

Under Construction

Bekasi Junction

Bekasi

Bekasi

42,000

Under Construction

Grand Metropolitan Mall

Kalimalang

Bekasi


Urbana Cinere

Cinere

Depok

30,000 Under Planning

Cibinong City Mall

Cibinong

Bogor


Mall Ciputra Citra Gran

Cibubur

Bekasi


Plaza Cibubur extension

Cibubur

Depok


Bintaro Xchange

Bintaro

Tangerang


Lippo Cikarang Citywalk (phase 2)

Cikarang

Bekasi


Summarecon Bekasi (phase 1)

Bekasi

Bekasi


Mal Harapan Indah

Bekasi

Bekasi


The Breeze Sinar Mas Land

Serpong

Tangerang


Bekasi Trade Center 2

Bekasi

Bekasi

30,000

Cimandala City Trade Center

Bogor

Bogor


Summarecon Bekasi (phase 2)

Bekasi

Bekasi


2013

2014

Under Planning

2016


p. 26



Demand existing retail performance 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007

2008

2009

2010 Jakarta

2011

1Q 2012

2Q 2012

BoDeTaBek Colliers International Indonesia - Research

jakarta As of 2Q 2012, the occupancy rates of retail centres for lease in Jakarta improved moderately to 89.5% Q-o-Q. Thanks to middle-class retail centres like Tebet Green, Pasaraya Blok M, Plaza Semanggi, Kalibata City, POINS and f’X Lifestyle x’nter which maintained the overall performance. Occupancy rates for middle- to upper-class malls achieved an average of 93.3% in 2Q 2012 up mildly compared to the previous quarter. Kuningan City, a new mall which has been operating since last year, has a good occupancy rate together with other middle- to upper-class malls. On the other hand, middle- to low-class malls showed a moderate decline in occupancy during the quarter. In 2Q 2012, the average occupancy rate of this class was 85%. The high competition among the electronics and gadget retailers located in Mangga Dua. Has created rivalry among stores which caused some tenants (fashion and accessories) to pull out. This was also seen in a mall located in the Blok M area of South Jakarta. All in all, it is not always market competition which causes some retailers to terminate their business which decrease the occupancy level of a mall. Some landlords are now quite selective in sorting out their existing tenants (low performing tenants are replaced). Other than that, some renovation work at a mall may also affect the overall occupancy. The food and beverage (F&B) businesses are some of the most active retailers which help maintain the level of occupancy. The industry has grown faster in the second quarter after slowing in the prior quarter. They are likely

speeding up expansion in anticipation of the Islamic holiday, Idul Fitri, when people usually spend more for both F&B and fashion. Plaza Semanggi, Kalibata City Square, Tebet Green, f’X Lifestyle x’nter, Plaza e’X, Kuningan City, Central Park and Plaza Festival are malls with F&B domination which opened in 2Q 2012. For example, Roppan and Kenny Rogers Restaurant, which are located in the main entrance of Plaza Semanggi, have been open since May 2012. Likewise, The Coffee Bean & Tea Leaf opened at Tebet Green and Central Park Mall. The largest F&B invasion was at Plaza Festival (now known as Passer Koeningan), a mall that combines sport, entertainment and culinary concepts which welcomed Betawi Tempo Doeloe as an anchor tenant during 2Q 2012 with 2,200 sq m of space. Fashion retailers of shoes, bags and accessories are the second most active. Some brands are quite active this quarter including Color Box, Atmosphere, Gallop, Armani Jeans, Hugo Boss, The Little Things She Needs, Crocs, Rococo, Barbara Shoes, Class Room and Furla. In addition to F&B and fashion, other retailers like home equipment, gadgets and electronics, entertainment, beauty, health and personal care were active tenants in 2Q 2012. In the home equipment category, three retailers have taken large spaces between 1,000 and 7,000 sq m at malls located in South Jakarta. Ace Hardware and Informa, two retailers in the Kawan Lama Sejahtera group of companies, opened at Tebet Green and Pasaraya Blok M while Home Solution will open at Plaza Semanggi. During 2Q 2012, Ace Hardware has been operating while Informa and Home Solution are doing fitout work. Colliers International |

p. 27


occupancy rates based on class 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007

2008

2009

2010

Middle Upper

2011

Middle

1Q 2012

2Q 2012

Middle Low Colliers International Indonesia - Research

LIST OF new major tenants during 2Q 2012


location

region

Retailers

line of business

Plaza Festival

HR Rasuna Said

South Jakarta

Passer Koeningan

Food and Beverages

Ope

Pasaraya Blok M

Blok M

South Jakarta

Informa

Home Appliances

Fitti

Tebet Green Mall

MT Haryono

South Jakarta

Ace Hardware

Home Appliances

Ope

Plaza Semanggi

Sudirman

South Jakarta

Home Solution

Home Appliances

Fitti

Kuningan City

Satrio

South Jakarta

Ace Hardware

Home Appliances

Ope


LIST OF new tenants during 2Q 2012

shopping centres name Plaza Semanggi

location Sudirman

region South Jakarta

Retailers

line of business

status

Roppan

Food and Beverages

Open

Kenny Rogers

Food and Beverages

Open

Dapoer Selera

Food and Beverages

Fitting Out

Color Box

Fashion and Accessories

Fitting Out

Athmosphere


Fitting Out

Tebet Green

MT Haryono

South Jakarta

The Coffee Bean and Tea Leaf

Food and Beverages

Open

Kuningan City

Satrio

South Jakarta

Kay Collection


Open

Samasara Reflexology

Beauty and Health Care

Open

Chrysler

Automotive

Fitting Out

Energy Massage Reflexology

Beauty, Health and Personal Care

Fitting Out

NYX Cosmetics


Fitting Out

Sukasuki

Food and Beverages

Opening Soon

Watsons


Fitting Out

Optik Melawai

Optical

Opening Soon

The Little Things She Needs

Shoes, Bags and Accessories

Fitting Out

Crocs


Fitting Out

Rococo Rack


Fitting Out

Steps

Education and Entertainment

Fitting Out

Plaza e’X

f’X lifestyle x’nter

MH Thamrin

Sudirman

Central Jakarta

Central Jakarta

continued

p. 28




location

region

Retailers

line of business

status continuation

Mall Taman Anggrek

Citraland

S. Parman

Daan Mogot

Central Park

S. Parman

West Jakarta

West Jakarta

West Jakarta

The Little Things She Needs


Open

Erafone Megastore

Gadget and Electronics

Open

X.To.X Plus

Fashion

Open

Babara


Open

Tony & Moly


Open

Gallop

Fashion

Fitting Out

Samsung

Electronics

Fitting Out

TX Travel

Others

Fitting Out

The Coffee Bean and Tea Leaf

Food and Beverages

Open

Armani Jeans

Fashion

Open

Hugo Boss

Fashion

Fitting Out

Furla


Open

Bose

Gadget and Electronics

Open

Class Room


Open

Pizza e Birra

Food and Beverages

Fitting Out

Black Canyon Coffee

Food and Beverages

Fitting Out

Play House Land

Kids, Hobbies and Toys

Opening Soon

Mall Artha Gading

Kelapa Gading

North Jakarta

Optik Melawai

Optical, Jewellery and Watches

Fitting Out

Graha Cijantung

Cijantung

East Jakarta

Inul Vizta

Entertainment

Open Colliers International Indonesia - Research

bodetabek The occupancy rate in the Bodetabek area is relatively stagnant at 86.3%. Overall, the retail market in Bodetabek saw both leasing activities and leasing terminations keeping the occupancy rate the same. The closure of several stores in some retail centres in Serpong, Tangerang has brought more vacant space. Tenants like beauty, health and personal care, tour and travel, and money changers ceased operations at the mall which is located in Serpong main road. Business competition among retailers has pushed several tenants to move out of the shopping centre. Again, due to tight competition, several retailers in a shopping centre located in the BSD, Tangerang could not survive and have vacated their premises. To anticipate further vacancy, the landlord tried to approach owners of store

units that have been purchased to convince them to lease the units like retail space (like a mall) and finding lessees for the space. After three to five years of operations, the landlord will return the units to the unit owner. Such strategy is expected to save the whole premises from becoming vacant and will boost the landlord’s reputation. Apart from a declining trend in occupancy, some leasing activities helped to fuel the overall performance in the Debotabek area. Living World, which is located in Alam Sutera, Tangerang has increased its occupancy after one year of operations. Currently the remaining vacant space is only 20% of the total leasable area.

LIST OF new tenants during 2Q 2012

shopping centres name Living World

location Alam Sutera

region Tangerang

Retailers Bebek Tepi Sawah

line of business Food and Beverages

status Fitting Out



p. 29


future retail performance After having intensive approach and doing a preliminary study into expanding operations into Indonesia, German-based giant retailer, Metro Group has decided to terminate the plan because they want focus more on improving sales figures. The cancellation was announced almost a year after Metro announced their plan to open their first outlet in Jakarta by 2012. Nevertheless, this action does not affect the plans of other foreign retailers to expand into Indonesia. Parkson Retail Asia (PRA) will open its first store in Jakarta by September 2013,

after successfully negotiating a 10-year lease agreement for retail space at St. Moritz Mall, located in the Puri Indah, West Jakarta. The stores, which will occupy 17,101 sq m of retail space, will target the upper-income market segment. The new Parkson store will complement PRA’s existing Centro department store brand, which has been operating in Indonesia for around eight years. The firm also plans to expand the Centro brand to other regions with rapid growth in the middle-class population.

LIST OF new committed tenants in the future retail centers

shopping centres name St. Moritz Mall

location Puri Indah

region

Retailers

West Jakarta

Parkson

line of business

Size (sq m)

status

17,101 Open in September 2013

Department Stores


pre-commitment level during 2011 - 2014 jakarta

bodetabek

Space Absorbed

Annual Supply

Space Absorbed

2014F

2014F

2013F

2013F

2012F

2012F

2011

2011 0

100,000

200,000

sq m

300,000

0

100,000

Annual Supply

200,000

300,000

sq m Colliers International Indonesia - Research

p. 30



Rental Rates and Service Charge Rental rates rental rates in jakarta and bodetabek area Rp450,000 Rp400,000 Rp350,000 Rp300,000 Rp250,000 Rp200,000 Rp150,000 Rp100,000 Rp50,000 Rp0 2005

2006

2007

2008

Jakarta

2009

2010

2011

1Q 2012

2Q 2012

BoDeTaBek Colliers International Indonesia - Research

After having operated from 2009 to 2011, some malls which are targeted at the middle- to upper-class segment increased their rental rates during 2Q 2012. The increase is in line with the performance of the mall, i.e. those with less vacant space will ask for higher rents. Some newly-opened malls located in Gandaria, Jalan Satrio and Jalan S. Parman have reported that they will adjust the rental rates due to increasing occupancy. A shopping centre located in West Jakarta which has done some renovation work has adjusted the asking rents upward. Traffic flow to the mall will be one of criteria for the landlord to increase or maintain the current rents.

mall in Jalan Pemuda has succeeded in raising the asking rental rates after maintaining high occupancy.

An increase in the average asking rent was also seen at the middle-class malls. A shopping centre located in Kramat Jati, East Jakarta repositioned itself by having a facelift, redesign, new interior works and improvement of the public facilities like tiles, toilets and elevators. With this additional capital expenditure, the shopping centre could attract branded retailers as their new tenants and increase the rental rates. Still in East Jakarta, a long-operating

Driven by increasing rental rates, the overall average asking rental rate in Jakarta was IDR413,382/sq m/month. The rental rates are projected to go higher over the next period particularly due to the influx of new malls which come with higher offering rental rates above the average market. According to our records, the upcoming malls will have asking rental rates of between IDR400,000 and 500,000/sq m/ month when they are launched.

Other ways to increase income in local currency (Rupiah) is to adjust the pegged rate. The pegged rate is the nominal exchange rate of local currency against the US Dollar set by the shopping centre management and it is generally below market value. This pegged rate is used by quite a few malls. A mall located in Senen, Central Jakarta adjusted their pegged rate by IDR500 compared to the previous quarter which increased the occupancy cost in Rupiah become higher.


p. 31


rental rates of shopping centres in jakarta and bodetabek Rp800,000 Rp700,000 Rp600,000 Rp500,000 Rp400,000 Rp300,000 Rp200,000 Rp100,000 Rp0 2005

2006

2007

2008

Middle Up

2009 Middle

2010

2011

1Q 2012

2Q 2012

Middle Low Colliers International Indonesia - Research

The average rental rates for Bodetabek also showed an increasing trend in 2Q 2012. For example, a mall in Bekasi has adjusted the pegged rate which increased the asking rent in Rupiah. Some efforts were made to achieve higher rental rates. A mall in Depok and two

malls in Tangerang increased the offering rental rates for the remaining leasable area. Overall, some of the rent changes have caused the rental rates in Bodetabek to go higher Q-o-Q to IDR252,159/sq m/month.

service charge In 2Q 2012, both Jakarta and Bodetabek area saw an increase in the service charge from IDR545 to 640/sq m/month. In Jakarta, the

service charge was an average of IDR77,795/sq m/month while in the Bodetabek area the service charge is IDR60,956/sq m/month.

Outlook The retail market has been gradually performing better with more leasing activities both in the operating and upcoming shopping centres. Landlords are generally quite concerned with the improving economy which leads to creating more retail sales and they are quite aware that amid increasingly high competition level in the market, they have to follow the dynamics of the market. Thus, quite a few mall owners (in particular old malls) make capital expenditures to improve the looks of the mall, change the interiors, replace non-performing retailers and adjust the tenancy mix in order to attract more

p. 32


crowds so they can ask for higher rents. Even more, one strata-title retail owner is quite concerned with the low performance at the shopping centre and is willing to take unpopular action to save the performance and the image of the shopping centre. Indonesia, as the fourth largest population in the world, will remain as an interesting market for investors and retailers. New foreign retailers have invaded Indonesia and we will see more foreign retailers particularly from Asian countries expand operations into this country.

jakarta | 2q 2012 | industrial estate

Industrial Estate Sector

Supply After several quiet periods, the industrial market saw new supply in 2Q 2012. At this point, Kota Bukit Indah (Indotaisei) must develop their remaining land stock in order to fulfil their transaction commitment with one big automotive manufacturer. Around 84 hectares of land should be ready; therefore, the landlord is rushing to deliver as scheduled. While the project is still under construction, the transaction was concluded, and we now recognise this as additional new serviceable industrial land. Thus, the total serviceable industrial land in the six regions (Serang, Tangerang, Jakarta, Bekasi, Karawang and Bogor) is now 8,750.3 hectares. The classic industrial supply issue remains the continuing enquiries for industrial land versus the limited stock of land on offer. For the last couple of years, land scarcity has been a major problem for most industrial estates, and the substantial surge in land demand is at the crux of this problem. It has been reported that, in certain industrial estates, potential buyers seeking industrial land come to the estate almost every day. Most of the time, this ends with no transaction because land is limited. In a landlord’s market such as this, developers like those located in Bekasi or Karawang continue to sell raw land at the price of ready-to-use land. Buyers are taking the position of acquiring

raw land at the current price anticipating a further increase when land is offered in a ready-to-use condition. They are now willing to buy raw land (at the ready-to-use price) and wait another year before the landlord delivers the land with all of the infrastructure. All in all, the land scarcity is anticipated, but it is seen as an opportunity to provide more land supply amidst mounting enquiries. For example, there is a plan to acquire around 200 hectares of land for an existing industrial estate located in the far west of Jakarta. Similarly, there is also an expansion plan for a leading industrial estate on the east side of Jakarta to expand an additional 150 hectares. In Serang, the new Kawasan Industri Terpadu MGM industrial estate indicated that they have plans to open in 2012 with around 662 hectares of land. However, they have yet to confirm a definite delivery timeline. Furthermore, the future overall industrial land stock is still significant. The only problem is that they are not ready to sell. Some property conglomerates such as Gajah Tunggal Group, Agung Podomoro Group, Lippo Group and Jababeka are holding back land stock allocated for industrial use. Agung Podomoro Group is planning to develop a total of 342 hectares of land for industrial use.

distribution of industrial land in SIX regionS

Serang 21%

Jakarta 10%

Bogor 2% Bekasi 26%

Karawang 36%

Tangerang 5% Colliers International Indonesia - Research


p. 33


Demand Since the beginning of the year, it was predicted that it would be difficult for total sales in 2012 to exceed those in 2011. Thus far up to the first semester of year 2012, total industrial land sold amounts to 30% (180.21 hectares) of total sales in 2011. The main reason is not because of demand reduction, because demand is still strong. Limited land stock availability is the major issue, which will lessen total sales during the whole year. Like in the previous quarter, Karawang remains the area with the most land being sold. Kota Bukit Indah by Indotaisei registered the highest sales among others, followed by Suryacipta. Total sales in Karawang was actually higher this quarter than it was last. In Bekasi, total sales for the second semester is less than in the first

quarter. Delta Silicon together with Greenland were quite consistent in terms of total land being sold. Meanwhile, Jababeka still registered transactions, though they were smaller in scale than those of the previous quarter. In Serang, total sales this quarter reduced compared to the previous quarter, mainly because KIEC’s sales figures were one-third of what they were the previous quarter. Meanwhile, Modern Cikande recorded better sales this quarter. In total, Karawang area sold a total of 118.63 hectares, which was 106.86 hectares more than what was recorded last quarter. Due to limited land supply, Bekasi only sold 49.16 hectares, which amounts to 71% of the total sales in 1Q 2012. Meanwhile, total sales in Serang was only 70% of the sales of the previous quarter.

annual industrial land sales up to 1H 2012 1400 1200

hectares

1000 800 600 400 200 0 2000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2011 1H 2012


land absorption during 4Q 2011 The substantial land sales in Kota Bukit Indah by Indotaisei was mainly derived from one leading automotive company, Astra Honda Motor (AHM). AHM is expanding its motorcycle plant, taking a total of 84 hectares of land in stages. This is so far the biggest industrial transaction up to the first semester this year. Other sizeable land transactions of 15 hectares occurred in KIIC, which sold to a US-based consumer product company for their expansion. Meanwhile, still in Karawang area, Suryacipta sold several parcels of land comprising six different companies in the automotive industry and totalling 12.53 hectares. The other three transactions were attributed to a ceramics factory and building materials warehouses. In total, Suryacipta sold a total of 19.63 hectares, amounting to only 34% of the total sales of the previous quarter.

p. 34


In the Bekasi region, Delta Silicon led in the amount of land being transacted, with 28.06 hectares. Again, transactions in Delta Silicon were dominated by industrial building developers who bought the land, built a small industrial building and sold. Other transactions were concluded by automotive parts companies and warehouse operators. In the second rank, Greenland continued to make deals with autoparts industry companies (six transactions), which altogether totalled 16.2 hectares. Jababeka only sold a total of 1.3 hectares (8% of the total land sold in 1Q 2012) of land, comprising four small transactions of less than one hectare each. Four sectors are represented: manufacturing, plastic injection mould, trading and chemical supply. The smallest transaction recorded in Bekasi was MM2100, for 0.63 hectares of land for the expansion of an existing electronic parts manufacturer.


Another active region is Serang, where the two most active industrial estates operate. Modern Cikande saw a total transaction of 11.39 hectares mainly made by a Japanese candy factory (3.57 hectares), a textiles factory (3.00 hectares), oil recycling facility (2.07 hectares), chemical

plant (1.44 hectares) and other small workshops and warehouse companies. KIEC, owned by the biggest national steel producers, recorded a total of four hectares of land comprising the expansion of two steel-related industries.

land absorption during 2011 Kota Bukit Indah led the total automotive industry sales for 2Q 2012 . In second position was Delta Silicon, with 28.06 hectares. Three

other industrial estates with significant transactions were Suryacipta, Greenland KIIC and Modern Cikande.

land sales recorded during 2Q 2012 in each industrial estate Kota Bukit Indah (Indotaisei) Delta Silicon Suryacipta Greenland (Kota Delta Mas) KIIC Modern Cikande Krakatau Industrial Estate Cilegon Jababeka MM2100 Industrial Town 0

10

20

30

40

50

60

70

80

90

hectares


cumulative supply, demand and take-up rates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Cumulative Supply (ha)

Cumulative Demand (ha)

1Q 2Q 2012 2012

Take-up Rate (%) Colliers International Indonesia - Research


p. 35


With more than 58% of the overall sales during the first half of 2012, automotive and related industries remained the key drivers for industrial land sales. Up to 2Q 2012, transactions concluded by automotive industries accounted for a total of around 230 hectares. The majority

of land transactions by automotive and related industries occurred in either the Bekasi or the Karawang area. Other dynamic industries during year in review included chemical, warehousing, steel-related, F&B, consumer goods, and manufacturing industries.

types of active industries during 1H 2012

Manufacturing Logistics/ 2.0% Warehouse Oil & Gas 4.1% 5.9%

Steel-Related 3.1% Pharmaceutical 1.0% Plastics 1.5%

Metal Textiles 2.3% 0.3% Building Material 2.9% Developer 5.5% Others 6.2%

Food & Beverage 2.4%

Automotive 58.6%


Industrial Land Prices Given a limited supply with continued demand, land prices rocketing by an average 32.4% Y-o-Y. The Serang region recorded the highest jump (26.3% Q-o-Q, or 37% Y-o-Y). Meanwhile, Bekasi registered only a 6.3 % increase this quarter (Q-o-Q) but the Y-o-Y change is significant at 70%. Likewise, in Karawang, land prices increased moderately this quarter. The determinant factors (supply and demand performance) have kept industrial land prices in forward motion. Industrial estates in Karawang keep increasing their land prices. In this quarter alone, the market has witnessed prices increase by 9.0% Q-o-Q. Three industrial estates within Karawang introduced new prices. Continuing enquiries combined with the scarcity of industrial land in this region has pushed developers to lift land prices. Meanwhile, Bekasi saw a modest percentage increase in land prices, at 6.3% Q-o-Q. This

p. 36


relatively small increase was due to the fact that land prices in this area are already higher than in other regions. Three industrial estates initiated new land prices during the reviewed quarter. Reviewing the overall figure for the full year, the price increase in Bekasi has gone up significantly. Furthermore, the Bekasi region commands the highest land prices compared to other regions. Two major industrial estates (Modern Cikande and KIEC) in Serang drove the most significant changes in the price of industrial land. This time, both industrial estates were confident enough to introduce significant price increases. Compared to last quarter, prices rose by 26.3%. Price compared to the previous year’s (2011) figures were up by 37.0% in both estates. We anticipate that the continued wave of land price increases will still take place during the remainder of 2012.


greater jakarta industrial land prices $180

US $/sq m

$150 $120 $90 $60 $30 $0 2006

2007

2008

Bogor

2009

Tangerang

2010

Karawang

2011 Bekasi

1Q 2012

2Q 2012

Serang


industrial maintenance cost

Overall, maintenance costs stood at the same level as last quarter. None of the operating industrial estates announced adjustments

service charges during the quarter under review.

greater jakarta industrial land prices $0.10

US $/sq m/month

$0.08 $0.06 $0.04 $0.02 $0.00 2006 Bogor

2007

2008 Tangerang

2009

2010

Karawang

2011 Bekasi

1Q 2012

2Q 2012

Serang


INDUSTRIAL LAND PRICES AND MAINTENANCE COSTs*

Lowest Bogor

Maintenance Costs

Land Price (sq m)

Region

US$ 50.00

Highest US$ 161.29

(/sq m/month) Average US$ 105.65

Lowest

Highest

Average

US$ 0.07

US$ 0.08

US$ 0.07

Tangerang

US$ 60.00

US$ 161.29

US$ 114.15

US$ 0.04

US$ 0.11

US$ 0.06

Karawang

US$ 107.53

US$ 150.00

US$ 127.51

US$ 0.05

US$ 0.06

US$ 0.06

Bekasi

US$ 150.54

US$ 225.81

US$ 175.14

US$ 0.06

US$ 0.07

US$ 0.06

Serang

US$ 107.53

US$ 107.53

US$ 107.53

US$ 0.03

US$ 0.05

US$ 0.04

*1US$ = Rp 9,300



p. 37


Outlook Up to the first semester of 2012, it is obvious to see that land availability remains the major issue holding back the industrial. Total sales recorded during the first half of 2012 represented 30% of the total sales in 2011, meaning that total sales for 2012 are unlikely to match figures seen in 2011.

Should the momentum of economic progress maintain through 2013, next year’s industrial land sales should be vibrant, because the combination of the influx of new industrial land would be well counterbalanced with continued enquiries from growing companies.

512 offices in 61 countries on 6 continents United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 • $1.5

billion in annual revenue

• 979

billion square feet under management

• Over

12,500 professionals

COLLIERS INTERNATIONAL INDONESIA: World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 FAX 62 21 521 1411

Michael Broomell Managing Director World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 FAX 62 21 521 1411 Ferry Salanto Associate Director, Research World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 FAX 62 21 521 1411

Copyright 2012 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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