Giant global tech firms to build data centres in Indonesia 

Projects by Microsoft, Google, Amazon, Alibaba, and more will be completed over the next two years.

Prior to July, Savills notes that the property market had shown steady growth following a successful rebound in the first quarter, when a strong path to recovery was previously anticipated. 

Several major developers reportedly booked robust sales in Q2, mostly led by landed house sales within their projects. In addition, shophouses and apartment sales in some major townships during the April to June period also picked up moderately, indicating a growing confidence among buyers after the slump in 2020. 

Here’s more from Savills:

In the retail sector, foot traffic slowly increased especially in popular shopping malls, but developers are still cautious to launch new mall projects in anticipation of limited expansion plans from retailers during the pandemic. Modest net take-up and low additional supply kept vacancy unchanged at around 12%. 

Meanwhile, the office market, both in the Jakarta CBD and outside the CBD saw elevated new supply levels amid slow absorption over the last two years. As a result, vacancy continued to rise and now stands at 25% (Jakarta CBD) and 28% (outside the CBD). With limited enquiries from corporate occupiers, recent demand has been driven by e-commerce, co-working operators and tech companies. 

Notable trends during the pandemic period include the expansion of data centers particularly in Jakarta and surrounding areas. To cater for the growth in domestic e-commerce and online apps a number of foreign investors (including major global players) have confirmed plans for the development of data centers over the past six months. These include Microsoft, Google, Amazon, Alibaba, Tencent, NTT and Singapore’s GIC, which have launched projects scheduled for completion over the next two years. With under provision compared with other markets in the region, data center development prospects in Indonesia have a lot of room for growth in the future. 

Similarly, the growth of Indonesia’s e-commerce market has also fuelled the expansion of modern logistics centers particularly around the capital city of Jakarta. Rising demand from logistics and distribution companies continued to attract institutional investors to expand in this sector. Regional players like GIC, LOGOS and ESR are among the first entrants lured by Indonesia’s attractiveness which is seen as the next big thing in Asia’s e-commerce market after China.


Join Realestate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

New home sales dropped 31.4% during the month.
This is due to elevated supply levels and uncertain demand from the Mainland.
The growth will be more prominent in Japan, Australia, and Hong Kong.
There were 17 major deals worth over US$12.8m each.
Private equity investors’ interest in offices will drive investment demand.
Savills expects rents of outlying business parks to bottom out soon.
Data centres accounted for 34% of all investments during the quarter.
Luxury brands are still wary of going to the high streets.
Q3 Grade A office rents increased 0.7% for the first time in five quarters.
Average multifamily asking rents dropped 3.6% over the year. 
Rents declined in all major submarkets while Kowloon rents proved more resilient.
Sales were propelled by the residential sector.
22% of all residential launches in H1 2021 were from the affordable segment.
But Colliers says transactions may pick up in Q4.