Jakarta new prime industrial supply to reach nearly 1m sqm by 2027

As a result, vacancy rates could hit up to 13%.

According to a recent report, JLL anticipates market dynamics to shift as stakeholders explore joint ventures, land acquisitions and diverse development strategies. The eastern part was poised for robust demand, particularly from manufacturing and EV sectors, through 2025.

“Forecasts point to 0.8 million sqm of new supply by 2027, potentially pushing vacancy rates to 12-13%. The market was prepared for changes due to global economics, with the aim to attract FDI in manufacturing. Industrial parks to plan upgrades to meet new demand,” the report added.

Here’s more from JLL:

Chinese EV, electronics and FMCG sought ready-to-lease spaces with specific requirements, often needing factory rentals. Some modern warehouses successfully met this demand by providing necessary adjustments and modifications to suit these companies’ needs.

Net absorption exceeded 100,000 sqm despite limited new supply. 3PLs led demand, while the eastern parts of Jakarta emerged as EV hubs, boosting warehouse demand. Market competition intensified as some owner-occupiers began leasing their available spaces.

Greater Jakarta’s market shows resilience as vacancy rates return to single digits

Only one new project added 7,200 sqm in Tangerang, with the market demonstrating resilience as vacancy rates declined to 9.5% from 12.7%.

Future supply prospects expanded with new market entrants. Saka Industrial Perkasa (SIP), Astra Property’s industrial arm, is prepared to contribute to new supply. Meanwhile, EZA Hill acquired three existing assets last year, adding to their underdeveloped land banks.

Eastern Jakarta sees competitive pricing as rent growth slows

Rents decreased 1.25% q-o-q, primarily in the eastern and southern areas of Jakarta due to heightened competition, while other areas saw relatively flat rents q-o-q.

Market yields began compressing from 8-8.5% towards 7.0-7.5%. Investors demonstrated confidence by accepting adjusted returns, highlighting the sector’s long-term potential.