Jakarta Grade A office rents down 2.4% in Q2

On a year-on-year basis, rents decreased 9.6%.

Grade A office rents in Jakarta CBD fell by around -2.4% q-o-q. According to a JLL report, considering the observed tenant-favourable market, landlords of lower-occupancy buildings were still willing to offer competitive rents.

Rents decreased by approximately 9.6% y-o-y. Due to limited occupier demand and the downsizing trend, rents are expected to fall further.

Here’s more from JLL:

Grade A negative net absorption was recorded in 2Q22 at approximately -5,000 sqm. Several leases were still identified despite being downsized, on average, due to ongoing market pressure and changing workplace strategy.

Companies in the automotive, energy and healthcare sectors were recorded to lease space in 2Q22.

Four consecutive quarters of no new supply as of 2Q22

There were no new Grade A office building completions in the quarter. The situation in 2Q22 marks one year without new supply additions in the Jakarta CBD.

Four projects are still expected to become fully operational by the end of 2022: Rajawali Place, Mori Building, Thamrin Nine Tower 1 (Autograph) and Tower 2 (Luminary).

Outlook: Market pressures are likely to continue

Flight-to-quality remains the central theme. However, area requirements might be smaller since the downsizing trend continued. Enquiries for green buildings may arise from MNCs to support their corporate sustainability goals.

Due to the upcoming new supply and limited demand, market pressures are likely to continue; the falling rents are expected to continue in the next half of 2022.

Note: Jakarta Office refers to Jakarta's CBD Grade A office market.