Jakarta Property Market Overview 1st Half 2019Jakarta Property Market Overview 14 Office Market...

Prepared by

Coldwell Banker Commercial Indonesia

Kawasan Bisnis Granadha, 12th B Floor

Jl. Jend. Sudirman Kav. 50,

Jakarta 12930, Indonesia

Jakarta Property Market Overview

1st Half 2019

2

ECONOMIC INDICATOR is considerable

as one of the most important factors that

affects property market

Economic Overview

3

Economic Indicators

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Inflation (%) Interest Rate (%)

1998

o Asian financial crisis causes inflation

to reach 77.68%

o This affected the interest rate which

reached 37.97%

2008-2010

o Global Crisis Occurred, with 2008 inflation

reaching 11.06% and then decreasing in

2010 reaching 6.96%

o Interest rate in reached 8.35% and was

stable again at 6.50% in 2009 and 2010

2016-2018

o In order to maintain the stability of

the Interest Rate, BI set a BI Repo

Rate policy in August 2016, which

was kept the rate stable in 2016 at

4.65%

Source: Bank Indonesia, 2019

Inflation and Interest Rate of Indonesia (%)

Economic Overview

4

Economic Indicators

-15

-10

-5

0

5

10

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GDP Growth

1998

o GDP in 1998 dropped dramatically due

to Asian Financial Crisis reaching -

13,13%

2008-2010

o After the Asian financial crisis, Indonesia’s

economic conditions began to improve

from 2000 to 2007

o In 2008 the global economic crisis began

in the USA and slightly affected Indonesia

GDP in 2009 with growth only at 4.63%

2016-2018

o There was an economic slow down

in 2015 but it did not significantly

affect Indonesia GDP which

remained stable in 2015 reaching

4.79% and in 2018 it reached 5.17%

Source: Central of Statistic Agency, 2019

Indonesia GDP Growth

Economic Overview

5

Although there was some correction in global economic in

2014, the GDP of Indonesia was relatively more stable with

average growth of 0.4% in last three years.

-8,00%

-6,00%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

China India Indonesia Japan

Indonesia; 5.02%

China; 6.60%

India; 7.00%

Japan; 0.80%

Gap between the highest and lowest growth of economic

growth in Indonesia was relatively low compared to others

countries in Asia.

Japan is the major country in Asia that achieves positive

economic growth than Indonesia.

Economic Indicators – Comparison GDP Growth in Asia

Source: Economic Trading, 2019

GDP Growth (%)

Economic Overview

6

Economic Indicators – Indonesia GDP

Sectors2018

(Rp billion) (%)

Manufacturing 2,947,299 19.86%

Wholesale and Retail Trade 1,931,911 13.02%

Agriculture, Foresty and Fishing 1,900,349 12.81%

Construction 1,562,297 10.53%

Mining and Quarrying 1,198,987 8.08%

Transportation & Communication 1,356,336 5.37%

Finance & Real Estate 1,022,888 4.15%

Others 2,917,290 19.66%

Total 14,837,358 100%

9.612.507

10.699.87811.526.333

12.401.729

13.587.213

14.837.358

-

2000000,0

4000000,0

6000000,0

8000000,0

10000000,0

12000000,0

14000000,0

16000000,0

2013 2014 2015 2016 2017 2018

Indonesia GDP (in Rp Billion)

Manufacturing

GDP continued to improve during the last several

years with average growth of 5.11% per annum

19.86%

Wholesale & Retail Trade13.02%

Source: Central of Statistic Agency, 2019

Economic Overview

7

Economic Indicators – Investment

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Mill

ion U

SD

Foreign Direct Investment

FDI Number of Project

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Bill

ion ID

R

Domestic Direct Investment

DDI Number of Project

Sourcre: BKPM, June 2019 Sumber: BKPM, June 2019

DDI (Domestic Direct Investment) has shown an increase in

both number and value of projects.

Based on type of sectors, DDI in the country dominated by

transportation (18%), construction (14%), food industries

(12%), electricity, gas & water (11%), and mining (10%)

Compared to DDI, FDI (Foreign Direct Investment) has been

more stable over the last several years.

Major FDI in 2018 included housing and industrial estate

(15%), transportation (10%), mining (10%), metal industries

(8%), and chemical & Pharmaceutical industries (7%).

High Correlation Between Economic & Property Market

8

Jakarta Office Market in CBD Area

1998 Crisis

- Supply growth down

- Demand negative

- Longer recovery

2008 Crisis

- Supply & Demand drop, but market still positive

- Limited supply in 2010

- Faster recovery

2015 Global’s Economic Slowdown

- Negative take up in 2014-2016

- Demand start to growth in 2017 and construction still on

- Shifting in type of business

-15,00%

-10,00%

-5,00%

0,00%

5,00%

10,00%

15,00%

(400.000)

(200.000)

-

200.000

400.000

600.000

800.000

Annual Net Supply Annual Net Take Up GDP

9

Jakarta Apartment Market

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

-

5.000

10.000

15.000

20.000

25.000

30.000

Annual Net Supply Annual Net Take Up Interest Rate

1998 Crisis

- Demand dropped dramatically to 82,58%

- Need 4 years to recovery

2008 Crisis

- Demand decreased 18,39%

- Demand still high in 2009


- Still growth in 2014-2015

- Middle & Mid Low segment enjoy the good absorption

- Investment slowing down untill now


10

Jakarta Retail Market

1998 Crisis

- Supply & Demand negative

- Shorter recovery

2008 Crisis

- Supply & Demand drop, but market still positive

- Supply still high in 2019

- Demand slowing down in 2010-2011


- Moratorium retail in Jakarta

- Limited new supply

- Demand slowing down and still positive trend

-15,00%

-10,00%

-5,00%

0,00%

5,00%

10,00%

15,00%

(400.000)

(200.000)

-

200.000

400.000

600.000

800.000

Annual Net Supply Annual Net Take Up GDP


“In the last few years, Jakarta’s Property Market shown in slowing down pace”

On Hold & Delay on New

Projects in Certain Sector

Limmited New Additional Supply Wait and See to Invest in

PropertyRental in Downward

Pressure

“However, MARKET SENTIMENT in property sectors has GROWN POSITIVELY since last year indicated by the

following figures”

11

Several New Launch Project were

Driven by Infrastructure Development

New Launch in Middle Upper and Upper

Segment have Targeted to Investor

Price Started to Grow in Perform

Projects

Shifting in Bussiness Type:Tech

Based Company

Economic Indicators – Implication of Current Economy to Property Market



12

Property Market Highlight

• Commercial property growth influenced

by the on-going construction (including

MRT, LRT, and toll road), particularly for

apartment and office sectors.

• Occupancy and sales rate increase in

retail and apartment market sectors.

• Apartment market was driven by

absorption of the middle segment.

• Retail market was greatly contributed by

food & beverage tenants and fast

fashion retail expansion.

• Co-working space and fintech

contributed significantly to leasing

activities in office sector.

• Price level continued to increase

moderately, whilst several

developments continued to adjust their

rental to a lower level due to most of

projects maintain a similar level from

previous year.

• During the 1st half 2019 most of property sectors in Jakarta had

recorded a moderate figures, with apartment is considerable as the

most perform property sectors

• In midst of major political event, property market shows

positive sentiment in the first half of 2019.

• Higher demand level in the property market along with

optimism in Indonesian Economy which has grown above 5%


13

Cumulative Supply Comparison

Jakarta contribute over 70% to the overall property market in Indonesia

Office Supply

(sqm)

Retail Supply

(sqm)

Hotel Supply

(room)

Apartment Supply

(unit)

93%

4% 2% 1%

Jakarta Surabaya

Medan Bandung

65%

16%

6%

13%

Jakarta Surabaya

Medan Bandung

55%

16%

9%

20%

Jakarta Surabaya

Medan Bandung

69%

18%

3%10%

Jakarta Surabaya

Medan Bandung


14

Office Market – Supply and Demand

Property

SectorMarket Highlight

Market Indicators

Occupancy Leasing Activity Rental

Office

Market

• There was over 90,000 sqm as new additional supply entered the Jakarta

office market during 2019

• Occupancy stood at 81.06% in the 1st half 2019, declined by 0.14%

compared to that in the end of 2018

• A positive net take up of 107,300 sqm, which mostly contributed by state-

owned companies, coworking space, e-commerce, and financial institution

• Rental has continued in downward pressure as occupancy remained in a

low level, stood IDR 203,000 per sqm per month, decreased by 2.44%

0%

20%

40%

60%

80%

100%

-

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

2015 2016 2017 2018 1Q19 2Q19

Cumulative Supply, Demand, and Occupancy of Office

in Jakarta

Cumulative Supply Cumulative Demand Occupancy

Supply & Demand (sqm) Occupancy

-

50.000

100.000

150.000

200.000

250.000

300.000

2015 2016 2017 2018 1Q19 2Q19

Rental and Service Charge of Office in Jakarta

Rental Service Charge

IDR/sqm/month


15

Retail Market – Supply and Demand

0%

20%

40%

60%

80%

100%

3.600.000

3.800.000

4.000.000

4.200.000

4.400.000

4.600.000

2015 2016 2017 2018 1Q19 2Q19

Cumulative Supply, Demand, and Occupancy of Retail in

Jakarta


-

100.000

200.000

300.000

400.000

500.000

600.000

700.000

800.000

2015 2016 2017 2018 1Q19 2Q19

Rental and Service Charge of Retail in Jakarta

Rental Service Charge

Property


Market Indicators


Retail

Market

• Retail market remained stagnant due to limited new supply entered the

market over the last several years

• Limited new supply has led leasing activities tend decrease

• Occupancy rate has relatively stable at 91.22% in the 1st half 2019

• F&B, fast retail, and lifestyle tenants (entertainment, sport center, etc) still

dominate the demand

• Rental stood at IDR 660,700 per sqm per month, relatively stable from the

end of 2018

Supply & Demand (sqm) Occupancy IDR/sqm/month


16

Apartment Market – Supply and Demand

0,00%

20,00%

40,00%

60,00%

80,00%

100,00%

-

50.000

100.000

150.000

200.000

250.000

2015 2016 2017 2018 1Q19 2Q19

Cumulative Supply, Demand, and Sales Rate of

Apartment in Jakarta

Cumulative Supply Cumulative Demand Sales Rate

24.000.000

24.200.000

24.400.000

24.600.000

24.800.000

25.000.000

2015 2016 2017 2018 1Q19 2Q19

Price of Apartment in Jakarta

Price (IDR/sqm)

Supply & Demand (unit) Sales Rate

Property


Market Indicators

Sales Rate Selling Activity Price

Apartment

Market

• In the 1st half 2019, total cumulative supply of strata-titled apartment in

Jakarta remained at 181,900 units, upper and middle upper segment as

additional supply entered to the market

• Demand absorption was not as high as demand in the last year with net

take up stood at 1,370 during 2019

• Middle and middle low market segments enjoyed a better good

absorption, then following by middle up segment

• Average price was recorded at 24.88 million per sqm, increased by 0.43%


17

Hotel Market – Supply and Demand

0,00%

20,00%

40,00%

60,00%

80,00%

100,00%

-

10.000

20.000

30.000

40.000

50.000

2015 2016 2017 2018 1Q19 2Q19

Cumulative Supply, Demand, and Occupancy of Hotel in

Jakarta


-

250.000

500.000

750.000

1.000.000

1.250.000

1.500.000

1.750.000

2015 2016 2017 2018 1Q19 2Q19

Room Rate of Hotel in Jakarta

Hotel Room Rate (IDR/room/night)

Property


Market Indicators


Hotel

Market

• Additional new supply came from 4-star and 3-star hotel in south and

north Jakarta

• Occupancy rate decreased by 4.92% compared to the same period in 2018

• Limited absorption in the 1st half 2019 due to election and limited corporate

activities, whereas demand generator came from government and MICE

activities

• 4-star enjoyed the good perform during the 1st half 2019

• Demand decrement have led room rate decreased slightly 1.65%

compared to 1st half 2018

Supply & Demand (room) Occupancy

18

ELECTION ACTIVITIES have influenced

decision of investors and developers to

stimulate property market

19

Office Market in Jakarta

Comparison of Property Market in 2014 and 2019

Office Sector Has Grown Positively Since Past 2 Years

(200.000)

-

200.000

400.000

600.000

800.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H-2019

Net Supply & Net Demand of Office Leased in Jakarta

Annual Net Supply Annual Net Take Up

demand lagging behind

supply

Absorption of office market in 1st

half 2019 show a better

performance compared to half in

2018, recorded at more than 50.0%

Although demand and supply of office

market shown positive, office rental

has already being downward pressure

since past 5 years

54.2%

Supply

15.2%

Demand

28.8%

The Average Growth Rate Since Past 5 Years

20

Apartment Market in Jakarta


-

5.000

10.000

15.000

20.000

25.000

30.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H-2019

Net Supply & Net Demand of Apartment in Jakarta


Apartment Market Get Affected by Pre 2019 and Post 2014 Election Season

New supply and absorption of

apartment in 1st half 2019 has

dropped compared to half in 2014,

whilst in 2004 and 2009 tend stable

Supply

-40.1%

Demand

-22.1%

Elections have had an impact on the

investor market, particularly in the

middle upper and upper segment,

where people choose afford to put

buying and selling decisions on hold


21

Retail Market in Jakarta


Retail Market Was More Stagnant Than The Office and Apartment Markets

Supply

-51.0%

Demand

-29.8%


-

200.000

400.000

600.000

800.000

1.000.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H-2019

Net Supply & Net Demand of Retail Leased in Jakarta


Election had a little impact on

consumer good

Limited demand in retail market kept

rental to remain stable

22

As economic has strong correlation

to property market performance

Let us take a look to

ECONOMIC FORECAST in 2020

to predict Property Market Outlook

Economic Forecast

23

Bank Indonesia

World Bank

It is estimated a slightly better economic performance in 2020…

Asian Development Bank

Bank Indonesia

target GDP

growth only

increase

0.1%

Property Market Outlook

24

Positive sentiment will be translated into a

higher number of transactions

Enquiries and leasing activities is expected to

reach stronger growth

Apartment will continue to show a better market

performance compared to other sectors

Hotel market performance will depend on

corporate and public policy in ticket fares

Even though enjoy a positive demand, office

occupancy remain low in the short term

Rental in most of recurring sectors will

continue in downward pressure

Property Cycle

25

Room rate will increase slightly after election in line with occupancy increment which derived by

MICE activities from government and corporate

Slowing down still continue in office rental, whilst retail rental tend stagnant

Apartment price will increase moderately in positive level

Overall, business climate will improve after Election, growth will better in second half 2019

Acceleration

Early Recovery Downturn

Growth Slowing

Current Condition (1H 2019) Future Condition (2H 2019)

Based on Rental and Price

Tommy H. Bastamy

Head of Strategic Advisory [email protected]

Angra Angreni

Research & Consultancy of Strategic Advisory [email protected]

Elzsa Nadiya

Research & Consultancy of Strategic Advisory [email protected]

Strategic AdvisoryColdwell Banker Commercial IndonesiaKawasan Bisnis Granadha, 12th B floorJl, Jend Sudirman Kav. 50Jakarta 12930Phone : +62 21 255 39 388 ext. 502Fax : +62 21 255 39 399Email : [email protected]

Contact Us

Thank You

27

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