Jakarta office rents on a downward streak for over two years now

But rental declines are now slowing with only a 0.6% drop in Q3.

As vaccination rates increase and restrictions begin to relax, office leasing activities in Jakarta are expected to slowly recover. Colliers recommends landlords to be aware of cost-saving strategies adopted by occupiers. Expansionary demand is likely to be dominated by domestic and regionally based companies due to quicker approval processes.

“The average rent in the CBD has been on a downward trend for more than two years. After dropping 7% YOY in 2020, the average asking rent continued its downward trend in 2021, albeit at a slower pace. In Q3, rent averaged IDR248.042, only a decrease of 0.6% QOQ. With about 1.5 million sq m currently vacant space available in the market, it is expected that more pressure will be on landlords.”

Here’s more from Colliers:

Currently, asking rentals in some buildings remains unchanged, but landlords will offer competitive rental packages for certain tenants. Asking rents will likely remain flat until the end of 2021, or only down by around 4% YOY. The level of demand is expected to improve, although we still see that potential rent increases will be partly due to this, and partly due to higher rentals set by new, premium office buildings. 

In Q1 2021 the average rent outside the CBD fell substantially. However, it gradually rose to IDR188,321 this quarter, increasing 1.5% QOQ. Similar to the CBD, the level of demand for office buildings located outside the CBD is expected to remain relatively low in the next few years. The only reason for upward adjustments in the overall rent is mainly because of the contribution of new buildings which offer higher rents than average market rentals.

The strata-title office sales market has been relatively quiet and, in the last nine months, average selling prices stayed at IDR54 million in the CBD and IDR36 million outside the CBD. Sales volume is expected to remain low. There is likely to be stagnation in selling prices, probably until 2022.