Jakarta apartment rents to grow by up to 3% in the next three years

This is due to the upcoming supply of new upscale serviced apartments.

In Jakarta, serviced apartments showed a continued improvement in average occupancy rate during 3Q 2023, reflecting the normalcy of business activities after the full lifting of restrictions and increased demand from expatriates, especially from Asian countries, including Japan, South Korea and India. 

As of Q3 2023, Colliers said the occupancy rate increased by about 3.5% QOQ to 60.5%.

Here’s more from Colliers:

In terms of rental rates, all serviced apartments in the CBD area maintained their rates steady, while new supply in the form of new serviced apartment projects (Citadines Gatot Subroto and Grand Mansion Menteng by The Crest Collection) pushed rents up in the non- CBD area. As such, the average rental rate registered at IDR445,986/sq m/month and IDR410,707/sq m/month in the CBD and South Jakarta (including non- prime areas), respectively. 

Further, we expect there will be some increment in the average rental rate given the forthcoming entry of new upscale serviced apartment projects which offer higher rental rates compared to the market. 

Meanwhile, with a significant increase in the supply of serviced apartment projects together with global macroeconomic headwinds, the short-term outlook remains cautious as the occupancy rate continues to face downward pressure, with the market needing time to absorb the incoming supply. As such, we projected the increment will be limited to a range of 1% to 3% in the next three years.

In the long run, the continued development of new infrastructure projects along with political stability and supportive government policies could strengthen foreign direct investment into Indonesia and attract major multinational companies. This will further boost the demand for serviced apartments in Jakarta.