201307 reif in brief

jakarta rEaL EStatE research & forecast report

www.colliers.com

1Q 2013 i the knowledge

Property Sector Overviewoffice sectorDuring the first quarter of 2013, the average asking base rental rates in the CBD continued to rise increasing by 8% (US$) and 6% (IDr) QoQ. Buildings with US dollar tariffs were recorded at an average of US$33.83/sq m/month while those in rupiah stood at IDr179,429/sq m/month. this increase in rental rates was mainly driven by the scarcity of good quality office space with only a 3% vacancy rate in the CBD. On the strata-title front, average asking prices for both US dollar and rupiah building have gone up modestly by around 2% QoQ to US$3,375/sq m and IDr28.4 million/sq m, respectively.

apartment sectorthe average apartment price, for units in the CBD, has climbed substantially (26%) YoY from IDr25.9 to 32.6 million/sq m. In South jakarta, apartment prices went up by 25% YoY from IDr17.8 to 22.5 million/sq m. Similarly, in the apartment for lease sub-sector, the average asking rental rates in the CBD climbed significantly by 11.2% QoQ from US$23.69 to 26.34/sq m/month.

retail sectorthe retail market continues to perform well, albeit with moderate price increase, with average asking base rental rates for all class shopping centres in jakarta rising 3% QoQ to IDr468,084/sq m/month. We anticipate a further increase in asking rental rates, given that the amount of retail space in the future will be quite limited (particularly in 2014 - 2015). Of the total 313,500 sq m of space to be completed in 2013, 82% has already been booked. In 2014, there will be only 9,000 sq m of retail space completed but 53% has already been pre-committed. Similarly, of a total of 70,000 sq m projected to be added to the 2015 market, 32% has been reserved.

industrial estate sectorSerang recorded the highest increase in land prices, 22%, during the quarter. However, land prices in Bekasi remained the highest compared to other regions, at an average of US$215.03/sq m. During the quarter, overall land prices in all regions saw a 10.5% increase on average. total land sales registered during the quarter was 243 hectares of which a 150-ha sale was concluded by the newly-opened karawang jabar Industrial Estate to a leading automotive company. again, land transactions occurring during the quarter were dominated by pre-commitment sales (74%), for which payment was made in advance, but hand-over will be conducted upon completion of infrastructure.

office sectorSupply

jakarta office cumulatiVe supplY

Colliers International Indonesia - research

cbd

JAKARTA

the construction activity in the CBD is seeming to dwindle during 2013; however, this does not mean that the jakarta office market is starting to weaken. In particular, during 2013, new office stock in the CBD will be very limited. Landlords of the future office buildings scheduled to be completed this year are still testing the waters and are waiting for the right moment to officially launch the projects. In 1Q 2013, there are two office buildings operate, namely Blue Green Office Boutique (in West jakarta) and Prudential Centre (in South jakarta) contributing additional space of 51,000 sq m. to date, total office space for the whole jakarta area was registered at 6.8 million sq m.

Projected annual office space for 2013 will be

311,908 sq m, far lower than the total annual supply for 2012 which was 547,070 sq m. Moreover, the total annual supply in 2012 was the largest since 1990.

the total additional 311,908 sq m during 2013 will be contributed by 18 office buildings comprising two big projects and six small projects in the CBD. Meanwhile outside the CBD area, only two office buildings is of notable size, while the remaining eight projects are relatively small to medium size projects. Of this total space available in 2013, only around 10% are marketed as strata-title office space. Compared to 2012, strata-title offices were the majority, accounting for 67% of the total annual supply in that year.

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

10,000,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

YtD

2013

F

2014

F

2015

F

2016

F

sq m

Existing Supply annual Supply

No new office buildings are ready for operation this quarter and the cumulative supply in the CBD remained at 4.62 million sq m which represents 67.9% of the total jakarta office supply. Meanwhile, of the 311,908 sq m of jakarta annual supply in 2013, 46.6% will be contributed by office buildings located in the CBD area which means that there will be 145,332 sq m new, additional supply to operate during this year. Most upcoming office space during 2013 will be supplied in the jalan Satrio and Mega kuningan sub-markets, contributing around 72% of the total annual supply. this is because two office

towers in these sub-markets are sizeable office buildings including DBS tower (64,000 sq m) and Menara Prima 2 (40,000 sq m). the remaining six office buildings are scattered around jalan rasuna Said and jalan Sudirman with semi-gross areas between 4,000 and 11,000 sq m. the total 2013 office space in rasuna Said was 27,715 sq m higher than in the Sudirman corridor. In Sudirman alone, three small offices located within an office park in the SCBD area will only deliver 13,617 sq m. these numbers are far below those in the previous year when the Sudirman area contributed 198,519 sq m or 68.5% of the total new supply in 2012.

the CBD Sees No New Supply During 1Q 2013

p. 2 | colliers international

JAKARTA | 1q 2013 | oFFiCe

composition of cbd office supplY based on grade


cbd office cumulatiVe supplY


outside cbd

Premium, 335,918 sq m

Grade a, 1,843,864 sq m

Grade B, 1,513,140 sq m

Grade C, 937,052 sq m

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

YtD

2013

F

2014

F

2015

F

2016

F

sq m

the outside the CBD area saw two new office towers operating in 1Q 2013, including Blue Green Office Boutique and Prudential Centre, which brought another 51,000 sq m of office space. thus, this brings the cumulative supply in the outside the CBD to 2.18 million sq m where 82% are offered as offices for lease. the total annual office space during 2013 will be 166,576, mainly scattered in South (115,976 sq m) and West jakarta (50,600 sq m). For the last three years, these two regions have been dominating as the main supplier of office space

in the outside the CBD area. During 2010 to 2012, there was 486,573 sq m of office space entering the outside the CBD market with 51% in South jakarta and 29% in West jakarta. Meanwhile, North jakarta has been developing into a commercial office area starting in the kelapa Gading and Pluit areas.

Based on marketing schemes, after contributing 143,290 sq m or 55.6% of the total annual supply in 2012, it is projected that there will be only 19,600 sq m of new strata-title office space in 2013.

Based on marketing scheme, because there will be only 11,000 sq m for strata-title sale, the majority of office space during 2013 will be

offered as offices for lease (92%). this situation is mostly due to project scheduling which in 2013 is dominated by offices for lease.

colliers international | p. 3


composition of outside cbd office supplY based on grade


outside cbd office cumulatiVe supplY


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

YtD

2013

F

2014

F

2015

F

2016

F

sq m

Grade a, 120,599 sq m

Grade B, 676,799 sq m

Grade C, 1,383,278 sq m

tb simatupang the substantial growth of the office supply in South jakarta is largely underpinned by the growing commercial activities, particularly in tB Simatupang and Pondok Indah areas. Last year, 60% of the 142,786 sq m of new office supply in South jakarta was located in tB Simatupang. In 2013, with a projection of 115,967 sq m of office supply in South jakarta, 73% will be located in tB Simatupang.

Since the development of the first strata-title office tower initiated by Sovereign Plaza, the number of strata-title developments continues to grow. to date, the comparison between strata-title and office buildings for lease is 2% : 98% while by the end of 2014, it will be 24% : 76%.



contribution new office supplY in tb simatupang to outside cbd

Colliers International Indonesia - research0

50,0

00

100,

000

150,

000

200,

000

250,

000

300,

000

350,

000

400,

000

450,

000

2016F

2015F

2014F

2013F

tB Simatupang Outside CBD s q m

new supplY in 2014 - 2016 While new office stock during 2013 will be in short supply, 2014 will see 613,192 sq m of new office space scattered throughout all of the jakarta area with 37% located in the CBD area. thus far, some under-construction buildings scheduled to operate in 2014 have shown significant construction progress, such as Lippo kuningan (previously known as Life tower), Gran rubina and Sinarmas MSIG tower (previously known as Chase tower). Meanwhile in the outside the CBD area, 18 Office Park, Manhattan Square, Plaza Oleos and Green kosmo Mansion (GkM) are expediting the construction progress to meet the completion. Even Beltway tower 3 has been working on the final stages of their construction.

Meanwhile, several office buildings in the pipeline and planned to operate in 2015 have started construction work in 2013. In the CBD, International Financial Center (tower 2) located in jalan Sudirman has started with ground works. Meanwhile in jalan rasuna Said, an office tower called rasuna tower is under construction, catching their completion which is scheduled for 2015. two other new developments in jalan Gatot Subroto, i.e. Office tower at St regis and Centennial are preparing for structural work, as well as Bahana Office tower and Noble House, located in the Mega kuningan sub-market.

annual cbd office supplY based on area


0 200,000 400,000 600,000 800,000 1,000,000

2013F

2014F

2015F

2016F

s q m

thamrin Sudirman rasuna Said Mega kuningan Gatot Subroto Satrio

Some construction work on future supply scheduled for 2016 has started. In Sudirman, two office towers, i.e. Sahid Sudirman tower and Icon tower have started with ground works. In jalan Senopati, an area next to

Sudirman Central Business District (SCBD), future office towers called District 8 (towers 2 and 3) will flank the existing Office 8 tower and are now starting construction.



Having reviewed the construction progress of office buildings scheduled for operations during 2014 - 2016 in the CBD area and should developers commit with the delivery time, supply would strongly achieve a total of 1.63 million sq m of new office space.

In the meantime, in the outside the CBD area, during 2014 - 2016, there will be 840,557 sq m

of new office space. Of this figure, 58% will be located along the jalan tB Simatupang corridor which affirms this area as the main contributor to the office supply in the outside the CBD area. Of the projected 840,557 sq m of future office space mentioned above, 61% has started construction. again this emphasises that the area of future office space within the next three years will be substantial.

annual outside cbd office supplY based on area


0 100,000 200,000 300,000 400,000 500,000

2009

2010

2011

2012

s q mCentral jakarta South jakarta North jakarta East jakarta West jakarta

new supplY pipeline

projected completion

timebuilding name location sga

(sQ m) marketing scheme deVelopment status*

cbd area2013 DBS tower (Ciputra World jakarta 1) Satrio 64,000 For Lease and For Strata-title Under Conctruction

2013 Menara Prima 2 Mega kuningan 40,000 For Lease Under Conctruction

2013 Perkantoran Setiabudi rasuna Said 11,000 For Strata-title Under Conctruction

2013 18 Park tower a Sudirman 4,814 For Lease Under Conctruction

2013 18 Park tower B Sudirman 4,570 For Lease Under Conctruction

2013 18 Park tower E Sudirman 4,233 For Lease Under Conctruction

2013 tempo Pavilliun I rasuna Said 7,075 For Lease Under Construction

2013 tempo Pavilliun II rasuna Said 9,640 For Lease Under Construction

2014 Sinarmas MSIG tower (Chase tower) Sudirman 75,000 For Lease Under Construction

2014 Gran rubina tower 1 rasuna Said 31,438 For Strata-title Under Construction

2014 Lippo kuningan rasuna Said 30,500 For Lease Under Construction

2014 Satrio Square Satrio 24,600 For Lease and For Strata-title Under Construction

2014 the Noble House Office tower Mega kuningan 45,000 For Lease Under Construction

2015 Bahana Office tower Mega kuningan 50,000 For Lease Under Construction

2015 Ciputra World jakarta 2 Satrio 70,000 For Lease and For Strata-title Under Planning

2015 International Financial Center 2 Sudirman 50,000 For Lease Under Construction

2015 Mangkuluhur tower Gatot Subroto 39,356 For Lease and For Strata-title Under Planning

2015 Menara Selaras Sudirman 36,596 For Lease Under Planning

2015 Office tower @St regis Gatot Subroto 90,000 For Lease and For Strata-title Under Construction

2015 rasuna tower rasuna Said 80,000 For Lease Under Construction

continued.............



new supplY pipeline


timebuilding name location sga


continuation.............2015 tower two at the City Center Sudirman 39,204 For Lease Under Planning

2016 District 8 tower 2 Sudirman 71,545 For Strata-title Under Construction

2016 District 8 tower 3 Sudirman 139,000 For Strata-title Under Construction

2016 Graha Surya Internusa rasuna Said 45,000 For Lease Under Planning

2016 Graha Surya Internusa 2 rasuna Said 45,000 For Strata-title Under Planning

2016 Gran rubina tower 2 rasuna Said 32,000 For Strata-title Under Planning

2016 Centennial tower Gatot Subroto 100,000 For Strata-title Under Construction

2016 Sahid Sudirman Center Sudirman 126,600 For Strata-title Under Construction

2016 Satrio Project Satrio 100,000 For Lease Under Planning

2016 Sequis Life tower 2 Sudirman 80,000 For Lease Under Planning

2016 World trade Center III Sudirman 70,000 For Lease Under Planning

2016 World Capital tower Mega kuningan 90,000 For Strata-title Under Planning

2016 Icon tower Sudirman 72,500 For Lease Under Construction

outside cbd area (exclude tb simatupang)2013 DIPO Business Park Slipi 19,600 For Strata-title Under Construction

2013 the Vida kebon jeruk 11,000 For Lease Under Construction

2013 altira kelapa Gading 40,000 For Strata-title Under Construction

2014 GP Plaza Slipi 12,204 For Strata-title Under Construction

2014 Menara Sentraya Blok M 52,072 For Strata-title Under Construction

2014 the Suites Pantai Indah kapuk 13,200 For Strata-title Under Construction

2014 Wisma 77 tower 2 Slipi 24,200 For Strata-title Under Construction

2014 kirana two Sunter 17,563 For Lease and For Strata-title Under Construction

2015 Gallery West kebon jeruk 29,000 For Strata-title Under Construction

2015 L’Venue Pasar Minggu 41,597 For Strata-title Under Planning

2015 Puri Financial tower Puri Indah 38,500 For Strata-title Under Construction

2015 Sky Indah 18 tower kalibata 27,500 For Strata-title Under Planning

2015 SOHO Capital S. Parman 36,000 For Strata-title Under Construction

2015 St Moritz Office tower Puri Indah 19,500 For Strata-title Under Construction

tb simatupang2013 alamanda tower 33,000 For Lease and For Strata-title Under Construction

2013 Gedung aneka tambang tower 2 16,000 For Lease Under Construction

2013 Oleos 2 4,181 For Lease Under Construction

2013 talavera Suite 17,172 For Lease Under Construction

2013 the CEO 5,023 For Lease and For Strata-title Under Construction

2013 Beltway Office Park tower 3 9,600 For Lease Under Construction

2014 Green kosmo Mansion (GkM) tower 23,000 For Strata-title Under Construction

2014 Metropolitan tower 44,000 For Lease and For Strata-title Under Construction

2014 Plaza Oleos 39,778 For Lease and For Strata-title Under Construction

2014 Palma tower 20,484 For Lease Under Construction

2014 South Quarter tower 1 40,778 For Strata-title Under Construction

2014 the Manhattan Square 39,375 For Lease and For Strata-title Under Construction

continued.............



Colliers International Indonesia - research*) Under Construction: where construction activity is in progress, including either foundation or superstructure. Under Planning: no contruction activities on site but all permits have been approved by the Government.


timebuilding name sga


continuation.............2015 aD Premier 18,900 For Lease Under Planning

2015 Naras tower 19,000 For Lease Under Planning

2015 South Quarter tower 2 40,778 For Lease Under Planning

2015 South Quarter tower 3 40,778 For Lease Under Planning

2015 the Manhattan Square tower 2 39,375 For Lease Under Planning

2016 Beltway Office Park tower 4 25,600 For Lease Under Planning

2016 Signum North tower 18,000 For Lease Under Planning

2016 the Manhattan Square 3 39,375 For Lease Under Planning

Demand the occupance based on grade in the cbd during QoQ period


90%91%92%93%94%95%96%97%98%99%

100%

Premium Grade a Grade B Grade C

4Q 2012 1Q 2013

the occupancy rate was less volatile during the quarter and remained at around 97%. During the quarter, premium class buildings experienced a minor drop in occupancy, but this did not affect the overall occupancy. the premium class buildings set asking rental rates far above the average market causing several tenants to recalculate occupancy costs and forcing them to search for more affordable premises. this made the vacancy rate for premium buildings relatively higher compared to the previous quarter. During the quarter, some office buildings

located in jalan Sudirman and jalan rasuna Said reported vacancy ranging from 1,000 sq m to 3,000 sq m. However, the situation did not much worry building owners amid this “landlord market”. Inquiries for quality office space continue to grow, either from tenant relocation or expansion. In jalan Sudirman, several transactions were recorded. a multinational technology and services company based in United States will occupy around 4,143 sq m space at an office building owned by Mulia Group. an insurance company established in 1975 will be occupying space of around 1,974 sq m at an office tower within the Metropolitan



albeit moderately, the overall occupancy rates in the outside the CBD moved up to 93.5% in 1Q 2013. Contributing the most office space for the whole outside the CBD area and further, recording an increase in occupancy by 3% QoQ, South jakarta coloured the overall occupancy rates for the outside the CBD area. as of the reviewed quarter, the average occupancy rate in the outside the CBD area was 94.8%.

More specifically, the increase in the overall occupancy in South jakarta was driven by the occupancy figure in the tB Simatupang and

Pondok Indah areas. the occupancy rate in the tB Simatupang area was 97.6% in 1Q 2013. although we noted an oil and gas company downsizing about 60% of their existing space, other office buildings reported increasing occupancy performance. two mineral and energy based companies acquired office space of around 1,200 sq m and 2,400 sq m while a company specialising in transport maintenance and repairing will occupy around 1,986 sq m of space at an office building located in Pondok Indah.

space aVailable and committed in the cbd (2013 - 2016)


0 200,000 400,000 600,000 800,000 1,000,000

2016F

2015F

2014F

2013F

sq m

Space absorbed annual Supply

space aVailable and committed in the outside cbd (2013 - 2016)


0 100,000 200,000 300,000 400,000 500,000

2016F

2015F

2014F

2013F

sq m

Space absorbed annual Supply



cbd the average asking base rent for all classes of office buildings within the CBD continued to increase. In 1Q 2013, the average base rent was IDr179,429/sq m/month, climbing by 5.6% compared to the previous quarter. In the meantime, the growth of the average asking base rent for office buildings charging US dollars saw an 8.1% higher increase QoQ. at good quality office buildings, the average

asking base rent for buildings charging in US dollars was US$33.83/sq m/month in 1Q 2013. there were 14 office buildings charging in US dollars located in Sudirman which introduced higher base rental rates between US$4.00 and 9.00. It was also noted that four office buildings in jalan thamrin increased the average base rent by US$10.00 QoQ. the limited supply of good quality office stock continue to be the main factor triggering the rent increase.

Base Rental; Quite Slow Increasing

aVerage asking rental rates in the cbd based on grade


aVerage asking rental rates in the cbd


$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

IDr 0

IDr 48,500

IDr 97,000

IDr 145,500

IDr 194,000

IDr 242,500

IDr 291,000

IDr 339,500

IDr 388,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

YtD

IDr US$

outside cbd In the outside the CBD area, office buildings charging in US dollars saw a higher growth of rents during the quarter. the average base rental rate was US$16.71/sq m/month, climbing

by 7.8% over the previous quarter. Meanwhile, the QoQ change of base rental rates for office buildings charging in rupiah was relatively flat with an average of IDr123,819/sq m/month.

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

IDr 0

IDr 97,000

IDr 194,000

IDr 291,000

IDr 388,000

IDr 485,000

Premium Grade a Grade B Grade C

IDr US$



aVerage asking rental rates in the outside cbd


tb simatupang Like other areas, average rental rates also rose in jalan tB Simatupang. Compared to the previous quarter, the average base rent moved upward to IDr119,633/sq m/month reflecting a moderate increase of 2% QoQ. about four office buildings introduced higher rental rates ranging between IDr30,000 and 40,000/sq m/month.

Meanwhile, the average base rent for buildings charging in US dollars saw a significant rent increase of 15% QoQ. to date, the average asking base rent was US$17.82/sq m/month.

around nine office buildings have increased the base rent in the range of US$2.00 to 3.00/sq m/month. Buildings that introduced higher rents during the quarter include arkadia, Beltway and Menara talavera. Older buildings which introduced higher rental rates during the quarter have been quite successful in maintaining the quality and performance of the buildings. another driving factor that suggests developers are becoming more confident is the limited sizeable office stock along jalan Simatupang.

aVerage asking rental rates in tb simatupang


$0.00

$3.00

$6.00

$9.00

$12.00

$15.00

$18.00

IDr 0

IDr 29,100

IDr 58,200

IDr 87,300

IDr 116,400

IDr 145,500

IDr 174,600

2005 2006 2007 2008 2009 2010 2011 2012 2013YtD

IDr US$

$0.00

$4.00

$8.00

$12.00

$16.00

$20.00

IDr 0

IDr 38,800

IDr 77,600

IDr 116,400

IDr 155,200

IDr 194,000

2005 2006 2007 2008 2009 2010 2011 2012 2013YtD

IDr US$



Strata-Title Offices the continued absorption of strata-title office space, both in the CBD and outside the CBD, has led to an increase in the average asking price. the pre-committed space of strata-title office buildings projected to operate in 2013 has reached 100%. Likewise, strata-title buildings projected to operate during 2014 have announced that 34% have been absorbed by the market. Office buildings, such as Gran rubina and Ciputra World 2, have already recorded a significant pre-committed take-up rate since the buildings were introduced at the end of 2012. Meanwhile, for the existing strata-title office buildings, the take-up rate has been reaching 99%.

a significant take-up figure has benefited the developers of new strata-title office buildings. New strata-title office buildings are setting offering prices in the range of IDr30 to 50 million/sq m.

For existing strata-title office buildings, the average asking price recently moved upward moderately by 2.2% QoQ to an average of

IDr28.4 million/sq m. Meanwhile, for buildings charging in US dollars, the average asking price was relatively flat at US$3,375/sq m.

With the majority of office buildings quoting prices in rupiah, the average asking price in the outside the CBD was IDr22.7 million/sq m, experiencing 25% growth YoY. this will likely continue along with the influx of new office buildings which will operate up to 2015. these upcoming buildings have been offering asking prices of around IDr25 million/sq m. the total additional new space up to 2015 will be 453,851 sq m, of which 38% has been sold to the market. tB Simatupang is the most active region in supplying future strata-title office for sale. this area will contribute 177,878 sq m of new office space or 49% of the future total strata-title supply during 2013 - 2016 in the outside the CBD area. Of this, 47% has been sold. as of 1Q 2013, the offering average asking price was IDr21.8 million/sq m.


IDr

0

IDr

10,0

00,0

00

IDr

20,0

00,0

00

IDr

30,0

00,0

00

IDr

40,0

00,0

00

IDr

50,0

00,0

00

IDr

60,0

00,0

00

CBD

Outside CBD

the range asking price for strata-title office

serVice charges Basic electricity tariffs and minimum wage increases seem to be starting to affect the service charge tariffs, in particular for office buildings located in the CBD. It is reported that the average service charge for office buildings charging in rupiah rose by 7.8% compared to the previous quarter. as of 1Q 2013, the service charge tariff was IDr61,372/sq m/month.

In the office buildings charging rents in US dollars, the average service charge was

US$6.54/sq m/month QoQ. Some office buildings located in thamrin and Sudirman contributed to the overall increase for the quarter. Meanwhile in the outside the CBD area, the average service charge was IDr42,557/sq m/month for office buildings charging in rupiah while for office buildings charging rents in US dollars, the service charge was quoted at US$5.38/sq m/month.



Land scarcity in the CBD has suggested a substantial correction to the overall office space price. as seen in the market, the price of newly built strata-title offices has gone up unreasonably. Likewise, in the secondary market, owners of strata-title office space in prime locations and in good premises offered asking prices arbitrarily, most of the time beyond the average market price.

Given the limited amount of quality offices, the leasing market is also quite active in strata-title premises. this will lead to continued absorption of strata-title space with buyers aiming to lease back their space amid the current premium rental rates. this is evidenced not only in the new strata-title office buildings, but also in the secondary market where office space potentially yields a good return.

Land scarcity in the CBD will be a blessing for other areas, particularly those with direct access to the CBD. In the west, jalan S. Parman has been populated with some good-quality office buildings as well as in the east side of the downtown where jalan Mt. Haryono is becoming an office space contributor. the increasingly high office prices in the CBD have an impact on the office prices of these two growing areas after the CBD and jalan tB Simatupang.

With limited supply projections during 2013 in the CBD, a “landlord’s market” situation will remain. Consequently, both office prices and rental rates are projected to further move ahead this year.

Outlook




the year 2013 saw 3,979 newly completed units from five apartment projects comprising four new projects and one tower extension for the Green Palace apartment project. Green Palace apartment is part of the kalibata City mega-project, comprising three components including kalibata residences, kalibata regency and Green Palace apartment. all of these new

projects brought the cumulative supply of strata-title apartments in jakarta to 121,255 units. Compared to the total quarterly supply in the 1Q 2012, this quarter’s supply is 7% lower. Overall, this cumulative supply of strata-title apartments represents 94% of the total operating apartment units in the whole jakarta area.

Supplyapartment sector

Apartments For Strata-title Sale

Furthermore, of the total supply for this quarter, approximately 60% is located in Central jakarta, while the remaining portions are located in North jakarta (22%) and South jakarta (18%). Despite being located in Central jakarta, the Green Pramuka sits on the edge of East jakarta, and thus is characteristic of East jakarta, rather than the Central jakarta. this project caters to the mid-low segment, having larger units. Based on market segmentation, the mid-low segment dominated this quarter’s supply at 66%, while only a few units from the residences at Dharmawangsa 2 offering luxury projects. Mid-segment projects completed in 1Q 2013, including Green Lake Sunter and the royal Springhill for example, represent 32% of the stock for the quarter.

Meanwhile, between january and March 2013, four new apartment projects commenced or were launched in jakarta, with a total of 3,830 units. two of the projects, the Capitol Park Salemba and Gallery West, are newly launched projects, while tower Dahlia at Bassura City and tower Orchid at the Green Pramuka are extensions to existing projects. all of these projects are located outside CBD area and will gradually enter the market in 2-3 years time.

a combination of residential and commercial functions characterizes the concept proposed by the newly launched projects. as jakarta is one of the most traffic-congested cities in the world, the “back-to-the-city” marketing gimmick is being promoted to boost sales for apartments which are located outside the centre of jakarta.

list of completed project in 1Q 2013

apartment name location regionasking price

(idr/sQ m)#units

Green Palace apartment (tower S) kalibata South jakarta 8 - 9 million 630

the royal Springhill (tower Marygold

and Magnolia)

kemayoran Central jakarta 16 - 17 million 384

the residences at Dharmawangsa 2 Dharmawangsa South jakarta 41 million 89

Green Lake Sunter (tower South) Sunter North jakarta 13 - 15 million 876

the Green Pramuka (tower Faggio

and Pino)

jend. a. Yani Central jakarta 8 - 9 million 2,000


list of newlY launched project in 1Q 2013

apartment name regionunit

#unitstYpe size (sQ m)

the Green Pramuka (tower Orchid) Central jakarta Studio - 2Br 21 - 36 1,000

the Capitol Park Salemba (2 tower) Central jakarta Studio - 3Br 24 - 88 1,700

Gallery West West jakarta 1Br - 3Br 51 - 128 280

Bassura City (tower Dahlia) East jakarta Studio - 3Br 20 - 48 850


JAKARTA | 1q 2013 | apartment

strata-title apartment cumulatiVe supplY


Other growing areas in Central jakarta include kemayoran and Cempaka Putih, which expect to see more apartment developments within the next 2-3 years. For example, three projects are under way in the kemayoran area. Selling activity for Palazzo kemayoran, which halted in 2010, has now recommenced. Marketing has commenced for the Mansion at Dukuh kemayoran, which was abandoned during the 1998 crisis and subsequently acquired by agung Sedayu Group. the royal Springhill, also located in kemayoran, is nearing the completion of its two additional towers, and is scheduled to finish in the 2015-2016 period. Meanwhile, in the Cempaka Putih area, there are two apartment projects which are mixed-used developments including Holland Village (developed by Lippo) and Sentosa residence (developed by Bahama Group as a joint venture with Sentosa Worldwide resorts). these apartment projects have not officially been launched, but they have already been introduced to their loyal customers.

the number of new projects (i.e. both those being launched and introduced to market) has decreased significantly since jakarta’s new governor was elected in October 2012. the new jakarta governor has brought in some changes to urban planning policy that were noted in the mid-term regional development plan (rPjMD). It is understood that the governor’s priority now, and over the next five years, is to endorse massive amounts of high-rise residential development targeting jakarta’s low-income segment by redeveloping the slum area into a residential area with environmental sustainability features. Further, in accommodating this low-income segment, the jakarta government is demonstrating its focus on building more low-cost rented apartments for workers, equipped with facilities like fitness centers and improved public and green space. therefore it is assumed that the issuing of new permits for commercially built apartments will be in lower priority.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2005 2006 2007 2008 2009 2010 2011 2012 2013YtD

Un

its



new supplY pipeline

apartment name location region #unit deVelopment sta-tus

2013East Park apartment (tower a) krt radjiman East jakarta 550 Under ConstructionGreen Palace apartment (tower V) kalibata South jakarta 630 Under Constructionambassade residence tower a Puri Denpasar CBD 234 Under ConstructionPancoran riverside (tanjung kalibata) Pengadegan timur South jakarta 1,900 Under Constructionkebagusan City (tower B) kebagusan South jakarta 548 Under ConstructionGP Plaza Gatot Subroto CBD 320 Under ConstructionPasar Baru Mansion (2 towers) Pasar Baru Central jakarta 520 Under ConstructionLuxurious raffles residences Satrio CBD 64 Under Constructionkemang Village (the tiffany) antasari South jakarta 240 Under Constructionthe East at Essence Complex Dharmawangsa Dharmawangsa South jakarta 244 Under ConstructionMy Home apartment at Ciputra World jakarta 1 Satrio CBD 136 Under ConstructionSentra timur residence (stage 2) 3 towers Pulogebang East jakarta 885 Under ConstructionGreen Lake Sunter (tower North) Sunter North jakarta 876 Under ConstructionGreen Central (tower Cerberra) Gajah Mada West jakarta 420 Under ConstructionSunter Icon (2 towers) Sunter North jakarta 600 Under Constructionthe H tower rasuna Said CBD 9 Under Constructionthe Windsor (2 towers) Puri Indah West jakarta 340 Under Constructiontitanium Square Pasar rebo East jakarta 725 Under ConstructionPakubuwono terrace (tower I) kebayoran Lama South jakarta 750 Under Constructionrusunami Delta Cakung (tower D) Cakung East jakarta 520 Under ConstructionVerde apartment (tower East) rasuna Said CBD 114 Under Construction

2014the Grove rasuna Said CBD 438 Under ConstructionSt Moritz (the New royal Suite tower) Puri Indah West jakarta 196 Under ConstructionSt Moritz (the New ambassador Suite tower) Puri Indah West jakarta 200 Under ConstructionSt Moritz (the New Presidential Suite tower Puri Indah West jakarta 200 Under ConstructionLa Venue - South tower Pasar Minggu South jakarta 341 Under Constructionthe Grove Suite rasuna Said CBD 151 Under Constructionkemang Village (the Intercontinental) antasari South jakarta 400 Under Constructionkemang Village (the Infinity) antasari South jakarta 175 Under Constructionthe aspen at admiralty Fatmawati South jakarta 860 Under ConstructionPakubuwono terrace (tower 2) kebayoran Lama South jakarta 720 Under Constructionthe Pakubuwono Signature Pakubuwono South jakarta 188 Under ConstructionSherwood apartment (richmond) kelapa Gading North jakarta 125 Under ConstructionSherwood apartment (Wellington) kelapa Gading North jakarta 100 Under ConstructionSherwood apartment (regent) kelapa Gading North jakarta 100 Under Constructionthe H residence Mt Haryono East jakarta 383 Under ConstructionPluit Seaview (tower Maldives) Pluit North jakarta 940 Under ConstructionSudirman Suites Sudirman CBD 380 Under ConstructionSenopati Penthouse Senopati South jakarta 63 Under ConstructionSky terrace Lagoon kalideres West jakarta 525 Under Construction

continued



apartment name location region #unit deVelopment status

continuationSenopati Penthouse Senopati South jakarta 63 Under ConstructionSky terrace Lagoon kalideres West jakarta 525 Under ConstructionLa City apartment (tower a) Lenteng agung South jakarta 980 Under ConstructionSetiabudi Sky Garden (tower 1) Setiabudi South jakarta 426 Under ConstructionLa Maison Barito (tower 1) Barito South jakarta 80 Under ConstructionBotanica apartment (3 towers) Simprug South jakarta 626 Under Constructionthe Hive @tamansari DI Panjaitan East jakarta 422 Under ConstructionSignature Park Grande Mt Haryono East jakarta 1,100 Under Constructionthe Bellevue at Pondok Indah Pondok Indah South jakarta 60 Under ConstructionMetro Park residence kebon jeruk West jakarta 1,200 Under ConstructionGading Greenhill Pegangsaan Dua North jakarta 700 Under ConstructionElpis residence Gunung Sahari Central jakarta 791 Under ConstructionCapitol Park apartment (tower t) Salemba Central jakarta 727 Under ConstructionCapitol Park apartment (tower U) Salemba Central jakarta 976 Under ConstructionNorthern ancol residence ancol North jakarta 800 Under Constructionthe Mansion at Dukuh Golf residence (aurora tower) kemayoran Central jakarta 522 Under Constructionthe Mansion at Dukuh Golf residence (BellaVista tower) kemayoran Central jakarta 612 Under ConstructionCasa Grande residence (Montreal tower) Casablanca CBD 313 Under ConstructionCasa Grande residence (Montana tower) Casablanca CBD 284 Under ConstructionGreen Bay Pluit (Bay View) Pluit North jakarta 3,096 Under Construction


During the first three months of 2013, the take-up rate of all projects (including those currently operating, those in the planning stages and those under construction) was recorded at 83%, reflecting a slight increase from the

previous quarter’s 82.2%. Nevertheless, the take-up figure suggests a promising sign for the apartment market, due to the fact that it has been above 80% since 2012.

Demand

aVerage take-up rates of strata-title apartments in jakarta


0%

20%

40%

60%

80%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013YtD

Tak

e-U

p R

ates



the completion of several apartment projects improved the buyer’s confidence. Most of the newly completed projects had very good take-up levels, with 80-90% of the total units being claimed and absorbed by the market. the strata-title apartment market should also see an increase in sales growth, having benefited from high discounts for cash payments and longer cash installment payment periods offered by developers. On the other hand, albeit

small in number, consumers who bought through mortgage financing from the bank enjoyed a low interest rate. Further to this, there are other practical reasons for the increased sales in apartments including the reduced travel-time to get to work and the prestige associated with living in an apartment; this is true particularly for those located downtown.

aVerage take-up comparison Q-o-Q

region 4Q 2012 1Q 2013 QoQCBD 87.7% 88.2%

South jakarta 86.1% 87.8%

Outside CBD 79.2% 80.3%


Developers with good track records are enjoying good sales performance with the projects they have under way. Certain locations in the CBD, and areas in South jakarta particularly, are showing a high absorption level such as Setiabudi, Senopati, Pakubuwono and Pondok Indah, because their locations have been favored by expatriates. Premium addresses like Pondok Indah, Gandaria, Senopati, Pakubuwono, Simprug and Permata Hijau remain the most preferred locations for luxury apartments. Most of the apartment developments emphasize the ‘green’ concept, as well as high building standards. In general, South jakarta is still a favorable location for either a second home or as an investment for those who anticipate

recurring rental income and/or capital appreciation. Most of the projects currently under construction in the premium locations claimed more that more than 60% absorption rate. Meanwhile, new projects beyond the CBD area are quite abundant, as many future projects are still experiencing difficulties selling units. take-up rates for apartments under construction beyond the CBD area are sluggish compared to the previous quarter. With a large supply of mostly mid-low segment apartment units, competition for projects located beyond the CBD area is likely to tighten as each project tries to generate more sales by offering attractive concepts and more facilities.

pre-sales of planned and under-construction projects

absorption rates of planned and under construction projects

region 4Q 2012 1Q 2013 QoQCBD 77.9% 79.4%

South jakarta 76.2% 79.1%

Outside CBD 65.8% 62.8%


the high level of apartment enquiries in jakarta has translated into creative sales strategies. One of them is auctioning apartments on the day of the launch which enables buyers to choose the best units in apartment tower. Further, several developers offer a pre-launch booking scheme which encourages costumers to buy more than one apartment unit. the promotion asks costumers to take a queue number (priority pass) for the best unit at their best price, by only paying IDr5-15 million as a

booking fee. Furthermore, it is fully refundable if the costumer is not satisfied with, or did not get, the preferred unit. With Chinese New Year falling during 1Q 2013, an increased number of promotions have been offered including financing incentives like longer cash installment periods (from 30 to 36 months) with zero interest, bigger discounts of up to 30%, and various other benefits such as lucky angpao, gold rewards and grand prizes including cars.



average asking prices for strata-title apartments have continued to demonstrate an upward trend. Given the relatively high sales rate for ongoing apartment projects, the overall apartment market witnessed somewhat higher asking prices, from an average of IDr19.6 to IDr21.0 million per sq m during the quarter. With its limited number of projects and available units, as well as continuing construction activity, the CBD managed to maintain a higher price increase on a QoQ basis, at 9.4%. On the other hand, the increase in asking price in the South

jakarta area (8.4% QoQ) was mainly triggered by the commencement of several good projects in premium locations, such as Senopati, Dharmawangsa, Pakubuwono, Permata Hijau and Pondok Indah. this quarter, the average asking price in South jakarta was registered at IDr22.45 million per sq m. Meanwhile, areas beyond the CBD recorded an increase of 4.4% QoQ to IDr16.35 million per sq m. Overall, the average asking price of apartments in jakarta increased by 7.8% QoQ, up by 16% YoY.

Price

aVerage asking price in different sub markets

area 4Q 2012 1Q 2013 QoQCBD IDr 29,817,081 IDr 32,619,752 9.4%

South jakarta IDr 20,717,032 IDr 22,455,876 8.4%

Outside CBD IDr 15,656,812 IDr 16,350,089 4.4%

average IDr 19,572,483 IDr 21,097,121 7.8%


the scarcity of land in jakarta, particularly in the CBD and a few areas in South jakarta, has caused land prices to increase, which has led to rises in the costs associated with apartment developments. Nevertheless, the confidence to increase selling prices has remained stable, with the support of external factors like the

positive economic outlook. as such, new apartments located in the CBD and South jakarta will continue to adjust the overall market price because price is potentially corrected along with sale progress for ongoing developments.

aVerage asking price based on sub markets


5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

Rp/

sq m

CBD South jakarta Non CBD average



Apartment For Lease (Serviced and Non-serviced)

there is currently a declining supply of serviced apartments from the kempinski Serviced residence, due to the conversion of 40 units from serviced apartments to private residences, and therefore at the end of March 2013, the total cumulative supply (of both serviced and non-serviced apartments) experienced a minor

decrease (by 0.5%), compared to the previous quarter. Overall, the cumulative supply of apartments for lease in jakarta decreased modestly to 8,206 units (comprising 56.6% serviced apartments and 43.4% non-serviced apartments).

Supply

there are, however, two serviced apartment projects in the pipeline, including Fraser residence Menteng and ascott kuningan jakarta, comprising 128 and 170 units respectively. these projects will come on line sometime in 2013. Further, there are two more projects located in the CBD including Fraser

Suites kuningan, which is part of the Ciputra World jakarta II mixed-used development, and Fraser Place Setiabudi; both are Fraser Hospitality developments providing a total of 350 units which are expected to be completed in 2014.


list of future apartments for lease (serViced) projects

apartment name location regionprojected

operation#units

Fraser residence Menteng Menteng Central jakarta 3Q 2013 128

ascott kuningan jakarta Satrio CBD 4Q 2013 170

Fraser Suites kuningan Satrio CBD 2014 200

Fraser Place Setiabudi Setiabudi CBD 2014 150

composition of apartments for lease in jakarta


Serviced56.56%

Non - Serviced43.44%



the apartment market during 1Q 2013 softened as indicated by the declining rate for all rental apartment sub-sectors (i.e. serviced and non-serviced apartments). Lease expiry and completed employment contracts are two factors that have affected the declining occupancy rates at the beginning of the year.

apart from that, the increasing rental rates affected the downturn in the occupancy rate of some non-serviced apartments, particularly those that have aged. In general, the occupancy level of apartments for lease (serviced and non-serviced) decreased by almost 2% QoQ, to an average of 76.6%.

Occupancy

occupancY for non-serViced apartment

region 4Q 2012 1Q 2013 QoQCBD 80.65% 80.47% -0.91%

South jakarta 79.72% 78.82% -0.90%

Outside CBD 75.96% 75.84% -0.12%


occupancY for serViced apartment

region 4Q 2012 1Q 2013 QoQCBD 84.55% 77.12% -7.44%

South jakarta 87.10% 84.29% -2.81%

Outside CBD 61.36% 60.65% -0.71%


occupancY based on apartment tYpe

tYpe 4Q 2012 1Q 2013 QoQServiced 78.16% 77.79% -0.37%

Non-Serviced 79.53% 74.05% -5.48%


aVerage occupancY for lease apartment


0%

20%

40%

60%

80%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013YtD

Occ

upa

ncy

Rat

e



During the reviewed period, the occupancy level for non-serviced apartments declined modestly by 0.37% QoQ, while for serviced apartments it dropped by 5.5%, compared to previous quarter’s 79.53%. as shown in the table above, occupancy for serviced apartments significantly dropped in the CBD by 7.44%.

apart from leasing conditions, as mentioned before, the reduced occupancy rate in serviced apartments in the CBD was due mainly to both the termination of kempinski Serviced apartments (which always maintained high occupancy levels), and renovation works at ascott Serviced apartments.

Significant changes were noted in rental rates during the first three months of 2013. Modest growth was seen in all sub-sectors, but most significant was serviced apartments located in the CBD. Overall, the average asking rents of apartments for lease in the CBD was registered at US$26.34 per sq m per month, which increased by 11.21% QoQ, or 10.29% YoY. apartments for lease beyond the CBD (including South jakarta) registered at US$15.4 per sq m per month, which increased by 4.26% QoQ, or 3.58% YoY.

Stronger leasing activity in serviced apartments, particularly those which are operated by international brands, has given impact to adjusting to higher rental growth. Nonetheless, few landlords maintained their current rates and were reluctant to increase them in order to retain current tenants. Increasing rents were mostly found in newer projects which enjoyed higher occupancy rates and provided better quality buildings.

Rental Rates

summarY of aVerage rental rates (usd/sQ m/month) bY region

region 4Q 2012 1Q 2013CBD $23.69 $26.34

Outside CBD $14.77 $15.40


aVerage rental rates for apartment for lease


the growing demand is not the only factor influencing the rental rates for lease apartments in jakarta however. Increases in electricity

tariffs and the regional minimum wage, as well as inflation, are also more or less contributing to the adjustment of rental rates.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

Ren

tal R

ate/

sq m

/mon

th

CBD Non CBD



the apartment market continues to benefit from steady economic growth, which is projected to peak at around 6% for 2013. another encouraging factor is the growing middle-income group, which potentially creates a new market for apartments. apart from these factors, the increasing price trend has been propelled by the scarcity of land, particularly in the CBD and several prime locations in South jakarta.

the occupancy rate for apartments for lease is projected to rise further, in line with expectations of increased expatriate arrival to harness business opportunities in jakarta. Demand for serviced apartments is expected to trend upwards. Nevertheless, as most existing rental apartments in jakarta are aging developments, there has been much opportunity for developers to build apartments or strata-title apartments that can be operated as serviced apartments (condotel), primarily those managed by international hotel operators, located within or near the CBD.

Outlook



Retail SectorSupply

jakarta retail annual supplY


the years 2005, 2008 and 2009 were the booming period for retail supply in jakarta. after some declining years, total annual supply of retail space bounced back in 2012, and in 2013 total annual supply will reach 313,500 sq m. However, it is anticipated to drop significantly

again, with only two mall extensions amounting to around 9,000 sq m. More space is anticipated to come in 2015, but again the area will be negligible considering that jakarta will face a deficit supply of retail space from 2015 onward.

jakartaIn 2013, up to 313,500 sq m of additional retail space will be added to the jakarta retail market, when six new retail centres are completed (and in operation) after the first quarter of 2013. With no supply entered the market in first quarter 2013 will bring the cumulative retail space in jakarta to a total of 4.15 million sq m. the opening of an additional three retail centres (that were forecast to be completed at the beginning of 2013) is likely to be rescheduled due to construction delays.

the moratorium on new retail permits issued by the jakarta municipality has affected future projections of retail space. In order to accommodate additional retail space, two existing retail centres in jakarta will undergo extension works. Puri Indah Mall, located in West jakarta, is extending its leasable space, which will be allocated to F&B. the other extension work in progress is at Mall kelapa

Gading 3. For both of these extension projects, construction works started in 2013, and are projected to be completed in 2014.

Due to its size, the St. Moritz project has meant that West jakarta has become the main contributor of retail space in 2013. Still in West jakarta, 2014 will see an extension project at the existing Puri Indah Mall. another extension in West jakarta will occur in the existing Central Park Mall, which plans to be expanded to around 40,000 sq m in 2015.

Further, the Pantai Indah kapuk Mall in North jakarta will offer mostly lifestyle and entertainment concepts. Meanwhile in South jakarta, new retail space will support residential development in the Pancoran area. It will also offer the lifestyle concept with more F&B retailers, over the next couple of years.

0

100,000

200,000

300,000

400,000

500,000

600,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

F

2014

F

2015

F

2016

F

sq m


JAKARTA | 1q 2013 | retail

jakarta retail annual supplY based on region


0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

CBD

South jakarta

North jakarta

West jakarta

East jakarta

Central jakarta

2009 2010 2011 2012 2013YtD 2013F 2014F 2015F

list of future shopping centres in jakarta

shopping centres name location regionnla

(sQ m)status

2013

Lotte Shopping avenue Satrio CBD 78,000 Under Construction

Pondok Indah Mall Street Gallery Pondok Indah South jakarta 9,100 Under Construction

Cipinang Indah Mall Cipinang East jakarta 20,000 Under Construction

Puliomas X’Venture Pulomas East jakarta 25,200 Under Construction

the Baywalk @Green Bay Pluit Pluit North jakarta 52,000 Under Construction

St. Moritz Puri Indah West jakarta 129,200 Under Construction

2014Mal Puri Indah 2 (extension) Puri Indah West jakarta 3,000 Under Construction

Mal kelapa Gading III (extension) kelapa Gading North jakarta 6,000 Under Construction

2015Central Park Mall (extension) S. Parman West jakarta 40,000 Planning Stage

PIk Mall Pantai Indah kapuk North jakarta 30,000 Planning Stage


bodetabekIn the greater jakarta area, known as BoDetaBek (an abbreviation of surrounding cities of jakarta including Bogor, Depok, tangerang and Bekasi), all six of the retail projects to commence in 2013 are located in the Bekasi region. two of these projects are to be completed within the quarter including the Bekasi junction shopping centre (with a hyper-store from korea as the anchor tenant) and the extension of Plaza Cibubur. these projects have brought the cumulative supply in the greater jakarta area to 1.94 million sq m. Of

this total supply, 39% is marketed as strata-title retail for sale. Bekasi junction became the latest strata-title retail centre operating in the greater jakarta area, after tangerang City in 2011. after the completion of these two centres, the greater jakarta area will see another 166,285 sq m of new retail space. Except for Bekasi, none of the other regions in the greater jakarta area will provide new retail space during 2013. In 2014 however, all regions will have contributed new shopping centres totalling 220,300 sq m.



Based on area, tangerang, with growth areas like karawaci, Bintaro, Serpong and alam Sutera, contributed 761,482 sq m of retail space, representing around 39% of the total retail stock in the greater jakarta area. Bekasi is the most active region for new retail space provision this year, which amounts to a total of 607,249 sq m. almost all new shopping centres projected to be completed during 2013 are

located within densely populated residential areas, which are expected to become a given captive market for those shopping centres. Meanwhile in Depok and Bogor, only a few future shopping centres will be coming on line over the next two years. Cumulative retail space in Depok registered at 269,345 sq m, while in Bogor it remained at 299,154 sq m.

bodetabek retail annual supplY


0

100,000

200,000

300,000

400,000

500,000

600,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

F

2014

F

2015

F

2016

F

sq m

aEON of japan established Pt. aeonmall Indonesia founded a joint venture company with Sinarmas Land to build aEON Mall in BSD City, tangerang, which is planned to open in 2014.

this company has also confirmed their plans to build a shopping mall in Delta Mas, Bekasi, scheduled for completion in 2015 as part of their market penetration outside of japan.

bodetabek retail annual supplY based on region


0 100,000 200,000 300,000 400,000 500,000

Bogor

Depok

tangerang

Bekasi

2009 2010 2011 2012 2013YtD 2013F 2014F 2015F



list of future shopping centres in bodetabek

shopping centres name location regionnla

(sQ m)status

2013

Grand Galaxy Mall Bekasi Bekasi 23,000 Under Construction

Bekasi junction Bekasi Bekasi 42,000 Complete

Grand Metropolitan Mall kalimalang Bekasi 47,285 Under Construction

Mall Ciputra Citra Gran Cibubur Bekasi 26,000 Under Construction

Plaza Cibubur extension Cibubur Bekasi 2,000 Complete

Summarecon Mall Bekasi Bekasi Bekasi 70,000 Under Construction

2014

Bintaro Xchange Bintaro tangerang 45,000 Under Construction

Lippo Cikarang Citywalk (phase 2) Cikarang Bekasi 10,000 Under Planning

Cinere Bellevue Suite Cinere Depok 28,000 Under Construction

the Breeze Sinar Mas Land Serpong tangerang 24,300 Under Construction

Cibinong City Mall Cibinong Bogor 40,000 Under Construction

aEON Mall BSD City Serpong tangerang 75,000 Under Planning

2015

Deltamas Mall Deltamas Bekasi Under Planning


Demand jakarta retail occupancY rates based on grade


0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013YtD

Middle Upper Middle Middle Low

albeit moderate, the increasing trend for occupancy rates continued this quarter. Occupancy stood at 88.9%, which was a modest move up from 88.7%, compared to the previous quarter. With no new additional supply entering the market in 1Q 2013, occupancy levels remained relatively stable.

Despite being lower than the other regions in

jakarta, the average occupancy level for South jakarta achieved the highest QoQ growth, recording 86.5% in 1Q 2013, which is 2.38% higher than the previous quarter. retail centres such as Pondok Indah Mall, Pejaten Village, kalibata Mall, Shopping Mall Gandaria, kota kasablanka and Lippo Mall kemang helped to stabilize the average occupancy level in South jakarta.



the East jakarta region achieved an average occupancy rate of 92.67%. With limited new supply, occupancy levels were relatively stable. Plaza kramat jati, an old shopping centre, undertook renovation works to its exterior and rearranged its tenancy mix, which encouraged most of its tenants to commit.

In the CBD area, which is populated by many in the middle- to upper-income brackets, retail centres reached occupancy rates of 91.7%, representing a slight increase compared to the previous quarter. Most prominent shopping malls within the CBD like Plaza Indonesia, Plaza Senayan, Senayan City, Grand Indonesia and kuningan City continue to maintain their performance.

Meanwhile, the average occupancy rates in other regions like West, Central and North jakarta were down. although occupancy is still recorded at above 90%, the average occupancy rates in West and Central jakarta during 1Q 2013 were slightly lower than in the previous quarter. the occupancy rate in West jakarta was recorded at 92.1%, while in Central jakarta it registered at 93.7%. North jakarta also noticed a modest declining trend, where

occupancy was at 85.9% for this quarter.

the overall upward trend in occupancy is insignificant when compared QoQ, because some retail centres also experienced a weakening occupancy rate. It has been identified that some shopping centres located in North, West and Central jakarta experienced a slight downturn in occupancy.

Evidently not all retailers will survive due to the level of competition. One notable café has had to close down, even though it is located in one of the preferred destination malls in Cilandak. In one of the CBD sub-markets, jalan MH thamrin, two malls experienced an increase in vacant space; with one having to release a well-known café, which will move to a luxury mall located in the SCBD area. the reason for the move is due to the fact that the café anticipated the redevelopment plans for the mall within which it was originally located (i.e. office building and high-rise residential). Meanwhile, due to lower traffic levels, the second mall will change its concept by replacing some under-performing tenants and inviting new F&B retailers to attract more crowds to the mall.

bodetabek retail occupancY rates based on region


average occupancy rates for all retail centers located in the greater jakarta area registered at 85.7%, posing a relatively steady performance compared to last quarter. almost all regions in the greater jakarta area experienced a modest increase in occupancy, in particular Bekasi. Mega Bekasi and Bekasi Square are two retail centers that helped fuel a higher occupancy performance for Bekasi, with an influx of

fashion and gadget-selling retailers. Meanwhile in tangerang, three shopping centers, including Living World, Shopping Mall at alam Sutera and Mall Balekota, had more new tenants which also helped maintain occupancy levels in tangerang. Several pre-committed tenants have opened at Mall at alam Sutera. In Depok, two retailers including ace Hardware and D’Cost opened at Depok Mall.

0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013YtD

Bogor Depok tangerang Bekasi



new foreign retailersGiven a notable population and growing number of middle-income earners, a number of foreign retailers (mainly fashion retailers) are targeting the Indonesian market. In the 2Q 2013, a French department store, Gallery La Fayette, will open at Pacific Place Mall. together with department store IrOO, a taiwanese fashion brand is also opening its first store in Indonesia. another foreign department store from thailand, Central Department Store, will open in Grand Indonesia around May 2013. a fashion and Swedish accessories retailer, H&M, will also open in Grand Indonesia and Pondok Indah Mall 1, in the near future.

In addition to department stores and the fashion retailers, fitness centres also continue to expand their outlets in the region. after opening at Lippo Mall kemang at the end of 2012, a fitness centre chain originating from the United

kingdom, Fitness First, will open two more outlets at other Lippo’s malls. Initially, they will open at Pejaten Village in early 2013, and then in St. Moritz at the end of the year.

Further, several foreign retailers will also invigorate the retail market in the capital city. japanese clothing and accessories retailer, Uniqlo, has officially announced its plan to open a flagship store in jakarta in mid-2013, hoping to benefit from the dynamic retail market in the city. the store is being touted as the second biggest in Southeast asia. another new brand aiming at this market is Penshoppe, a casual-wear fashion outlet from the Philippines. they will be targeting Indonesian middle-income earners to further tap into the burgeoning youth market. Penshoppe itself has more than 300 stores in the Philippines as well as Saudi arabia.

pre-committed demand

In jakarta, the pre-committed occupancy level for newly completed and under-construction shopping centres throughout 2013 has been recorded somewhat high at 82%; about 257,000 sq m has been absorbed. Meanwhile, in the greater jakarta area with 210,285 sq m of retail space projected to operate throughout 2013, the pre-committed level of absorption has been at the level of 71%. these numbers will further inflate, particularly in jakarta given that retail space is relatively limited.

In jakarta, almost all new retail centres which will be completed this year have commitments from new tenants. Even for future projects like Pondok Indah Street Gallery (or Pondok Indah

Mall 3), many new F&B tenants are already on the retailers’ waiting list for the mall that will be completed around May 2013. at Lotte Shopping Mall avenue at Ciputra World jakarta, the projects that will soon be completed in 2Q 2013 have confirmed leasing agreements with some new tenants to accompany the anchor, Lotte Department Store, including ranch Market, Burger king, Cinema XXI, Gold’s Gym, Hero Supermarket, Starbucks Café and Domino’s Pizza.

Meanwhile future shopping malls in West jakarta (i.e. St Moritz at Puri Indah and the Baywalk at Green Bay Pluit) have reported10% and 20% vacancy levels respectively.

pre-commitment leVel in jakarta retail


0

30,0

00

60,0

00

90,0

00

120,

000

150,

000

180,

000

210,

000

240,

000

270,

000

300,

000

330,

000

2015F

2014F

2013F

2012

absorbed Supplys q m

jakarta



In the greater jakarta area, some malls have secured anchor tenants, which are expected to lure other smaller tenants. Bekasi junction has Lotte Mart as their main tenant, while the totally

refurbished and extended Citra Grand Mall will have Hypermart, Matahari, Farmers Market and Gramedia as their anchor tenant.

pre-commitment leVel in debotabek retail


0

20,0

00

40,0

00

60,0

00

80,0

00

100,

000

120,

000

140,

000

160,

000

180,

000

200,

000

220,

000

2015F

2014F

2013F

2012

absorbed (sq m) Supply (sq m) s q m

list of new significant tenants in existing shopping centers

retailers kind of business size (sQ m) shopping centres name region when

H&M Fashion and accesories 1,700 Pondok Indah Mall South jakarta 2Q 2013

Electronic Solutions Home appliances kalibata Mall South jakarta 2013

Fitness First Lifestyle and Entertainment 1,436 Pejaten Village South jakarta 1Q 2013

ace Hardware Home Furnishing 3,500 Depok Mall Depok 2013


debotabek

Rental Rates and Service Charge rental ratesIn 1Q 2013, rental rates per square meter per month in jakarta were recorded at IDr468,084. this represents a slight increase by 3% QoQ, while YoY this suggests a 21% climb. Despite being small, the increasing pegged rate also influenced the overall rental rate in jakarta this quarter. Overall, landlords are generally maintaining their current rental rates, given a

steady level of inquiries for retail space in jakarta. Further, some projects with high occupancy are asking for higher rates, primarily for prime space locations.

Meanwhile, the average rental rate in the greater jakarta area was relatively stable at IDr263,377/sq m/month.



rental rates in jakarta (based on grade) and bodetabek


pegged rates adjustment in jakarta


additional to the Government’s minimum wage policy, which will increase operating costs, its plan to also increase electricity tariffs will pose a major impediment to retail operators, because it will affect an increase in overall rental costs. the electricity tariff alone is a major component of the total operational cost, contributing about 40%. Since early 2013, the Government decided to gradually increase electricity tariffs quarterly, both for households and industry. For industry using of above 200 kVa, the basic electricity tariff is estimated to climb by around 20% up to the end of 2013.

although the increases in electricity charges and the minimum wage have not yet entirely been implemented, some retail centres located

in Pondok Indah, Blok M, Pejaten and Cilandak within South jakarta have already increased their service charge by 25%, on average. In West jakarta, three retail centres located in Puri Indah and Slipi have also raised their charge by 26%, on average, while two shopping centres located in the CBD increased theirs by 8%.

In this quarter, the average service charge for shopping centres in jakarta climbed by 5% QoQ to reach IDr85182 per sq m per month. While for the greater jakarta area, service charges were only up slightly at IDr62,821 per sq m per month. It is anticipated that shopping centre operators will adjust their overall service charge costs in mid-2013.

serVice charge

IDr 0

IDr 100,000

IDr 200,000

IDr 300,000

IDr 400,000

IDr 500,000

IDr 600,000

IDr 700,000

IDr 800,000

2007 2008 2009 2010 2011 2012 2013YtD

Middle Upper Middle Middle Low average BoDetaBek

IDr 6,500

IDr 6,750

IDr 7,000

IDr 7,250

IDr 7,500

IDr 7,750

IDr 8,000

2007 2008 2009 2010 2011 2012 2013YtD



serVice charge in jakarta and bodetabek


the growing number of middle-income consumers has been the main attraction for retailers opening stores in Indonesia, not to mention the influx of foreign retailers. Quite a few big retailers in their respective countries perceive Indonesia to be an important market. Big fashion retailers are the most active retailers penetrating this market.

On the supply front, assuming that there will be continued growth in the economy, the next two years will be an unfavourable time for retailers to expand, given the scarcity in retail space

during that period. thus far, there is no official announcement on new projects, suggesting that finding new retail space will be challenging in 2014. Consequently, rents are expected to move up, reflecting the limited stock of retail space.

this year alone will already be a difficult period for retailers, primarily because of the increases in electricity tariffs and new minimum wages regulations, which will translate into higher operational tariffs in shopping centres.

Outlook

IDr 45,000

IDr 50,000

IDr 55,000

IDr 60,000

IDr 65,000

IDr 70,000

IDr 75,000

IDr 80,000

IDr 85,000

IDr 90,000

2007 2008 2009 2010 2011 2012 2013YtD

jakarta BoDetaBek



Supply the year 2013 will see quite a sizeable amount of new industrial land from the expansion of several industrial estates. thus far, only 20 ha was recognised as this quarter’s supply. kota Bukit Indah (Indotaisei), located in karawang, concluded a sales commitment with a leading automotive company, astra Honda Motor (aHM) and handed over part of their total land sales of 84 ha. this is the only additional new industrial stock in early 2013.

two industrial estates located adjacent to each other in Bekasi were accelerating their land clearing and infrastructure work as part of the expansion plans. Bekasi Fajar confirmed that the 50 ha extension plan, on which they are now working, would be ready in around September this year. Likewise, a neighbourhood industrial estate, MM2100 is allocating around 150 ha for their expansion plan. Still in Bekasi, while continuing to sell their land, Greenland International Industrial Centre (GIIC) at kota Deltamas also has to make sure that what they have sold have will be delivered as promised. thus far, GIIC is working on preparing the land, including infrastructure work, which is estimated for delivery in the july to December period. Other industrial estates have indicated that they will introduce new land opening, including Modern Cikande IE, which announced the expansion of another 100 ha as part of their fifth stage. thus far, cut and fill works are in progress and the delivery will be in stages flowing with the construction work and market inquiries.

One notable industrial estate in karawang has also indicated that it will introduce small parcels of land sometime in 2014. With very limited land available in this industrial estate, prices will potentially be offered at a premium rate. a new industrial estate that has just concluded a

sizeable transaction with a leading automotive company is karawang jabar Industrial Estate (kjIE) which belongs to Lippo. the total gross area of kjIE is 183.2 ha and this will be divided into three phases and will be delivered in September 2013, 2014 and 2015.

apart from operating industrial estates, which are actively expanding their zones, are several upcoming industrial estates located mainly in karawang.

While some expansion projects are still underway, the transaction activity continues. However, we only recognise new supply when land is ready for occupation with ready infrastructure. With the additional 20 ha from kota Bukit Indah, the total serviceable industrial land in the six regions (Serang, tangerang, jakarta, Bekasi, karawang and Bogor) is now 8,706.3 ha.

the classic industrial supply issue remains the continuing enquiries for industrial land versus the limited stock of land on offer. Since 2011, land scarcity has been a major problem for most industrial estates, and the substantial surge in land demand is at the crux of this problem. It has been reported that, in certain industrial estates, potential buyers seeking industrial land come to the estate quite frequently but this ends with no transaction because land is limited. In a landlord’s market such as this, developers, like those located in Bekasi or karawang, continue to sell raw land at the price of ready-to-use land. Buyers are taking the position of acquiring raw land at the current price anticipating a further increase when land is offered in a ready-to-use condition. they are now willing to buy raw land (at the ready-to-use price) and wait some time before the landlord delivers the land with all of the infrastructure in place.

Industrial Estate Sector


JAKARTA | 1q 2013 | industrial estate

distribution of industrial land in six regions


jakarta10%

Bogor2%

Bekasi26%

tangerang5%

karawang36%

Serang21%

Compared to previous periods, sales of industrial land were sluggish. In particular, the sales activity within operating industrial estates saw the lowest number of total quarterly transactions since 2010. Fortunately enough, the total quarterly sales during 1Q 2013 was much underpinned by the sales occurring in the newly opened karawang jabar Industrial Estate (kjIE) involving 150 ha (gross area) of land sold to a leading automotive company. If this transaction is excluded, the total industrial transactions within operating industrial estates only involved 93 ha. Land absorption is definitely weakening. However, the main reason is not because of demand reduction, because demand is still strong. Limited land stock availability is the major issue, which will lessen total sales for the last quarters.

total sales in karawang during 1Q 2013 jumped immensely due to sales at karawang jabar Industrial Estate. this newly opened industrial estate sold around 150 ha of gross land area to a leading automotive company. With this large transaction, this automotive enterprise will become the anchor of this industrial estate. However, this transaction is considered a pre-committed sale because the land is still

undeveloped with no infrastructure. the first phase of the land will only be ready in September this year. In total, the karawang area sold a total of 176.7 ha, which was nine times higher than that recorded last quarter.

Should the kjIE transaction be excluded, the biggest transaction would be completed by Greenland International Industrial Center in Bekasi followed by Suryacipta in karawang.

In Bekasi, total sales for the first quarter of this year was less than in the fourth quarter of last year. Delta Silicon, together with Greenland International Industrial Center, was quite consistent in terms of total land being sold. Meanwhile, jababeka still registered transactions, and is higher in scale than those of the previous quarter. Due to limited land supply, Bekasi only sold 49 ha, lesser than in the previous quarter. In Serang, total sales this quarter were reduced compared to the previous quarter, mainly because kIEC’s sales figures were only 14% of what they were in the previous quarter. Likewise, Modern Cikande recorded fewer sales this quarter.

Demand




annual industrial land sales

In karawang area, Suryacipta sold two parcels of land totalling 26.7 ha to two different companies, one in the building materials business from Europe and a F&B company. Other active industrial estates registered no sales during the quarter. kIIC sales were dormant because of limited land stock to sell. Likewise, in kota Bukit Indah (Indotaisei), they still focus on selling the remaining small parcels of land. also they are accelerating the land clearing and infrastructure on the land they have sold to astra. another kota Bukit Indah industrial estate which belongs to Besland Pertiwi reported zero sales and leasing activity during 1Q 2013.

In the Bekasi region, Greenland International Industrial Center (GIIC) led in the amount of land being transacted, with 31 ha. again, auto-related companies and chemical industries dominated all seven transactions in GIIC. In second place, Delta Silicon continued to make deals with auto-parts industry companies (50% of the total transactions), warehouse and other industries, which altogether totalled 12 ha. jababeka sold higher amounts compared to previous quarters with a total of around 6 ha of

land, comprising one transaction of 3 ha of land to a packaging company, 2 ha of land to a F&B company and 1 ha to a trading company. Other prominent industrial estates in Bekasi reported no sales mostly because they do not have land to sell.

another active region is Serang, where the two most active industrial estates operate. Modern Cikande saw a total transaction of 5.85 ha mainly to a local company comprising seven small transactions (painting ink, medical equipment, steel, kitchen appliances and chemical company). kIEC recorded a total of five transactions with a steel company, fabrication and fibre optics totalling 6.5 ha.

Millennium industrial estate was likely the only active industrial estate in tangerang selling industrial land. Millennium sold around 5 ha of land during the quarter.

In Bogor, CCIE reported zero leasing activity and is consistently focusing on leasing the land. Meanwhile, Sentul Industrial Estate will sell industrial land once all the land certificate matters are rectified.

0

200

400

600

800

1000

1200

1400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YtD

hect

ares




land sales recorded during 1Q 2013 in each industrial estate

0 20 40 60 80 100 120 140 160

Millenium

Modern Cikande

jababeka

krakatau Industrial Estate Cilegon

Delta Silicon

Suryacipta

Greenland International Industrial Centre

karawang jabar Industrial Estate

hectares

With more than 72% of the overall sales during the first quarter 2013, automotive and related industries remained the key drivers for industrial land sales. the majority of land transactions by automotive and related industries occurred in

either karawang (kjIE) or Bekasi (Delta Silicon and GIIC). Other dynamic industries during the quarter in review included F&B, building materials, chemicals, steel-related, warehousing and packaging.

cumulatiVe supplY, demand and take-up rates


0%10%20%30%40%50%60%70%80%90%100%

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YtD

Cumulative Supply (ha) Cumulative Demand (ha) take-up rate (%)



tYpes of actiVe industries in 1Q 2013


Given a limited supply with continued demand, land prices climbed by an average 10.5% QoQ. the Serang region recorded the highest jump by 21.5% QoQ. Meanwhile, Bekasi registered only a 4.3% increase this quarter (QoQ). Likewise, in karawang, land prices increased moderately this quarter by 9.1%. the determinant factors (supply and demand performance) have kept industrial land prices moving forward.

Industrial estates in Serang keep increasing their land prices. In this quarter alone, the market has witnessed price increase from an average of US$114.58 to 139.26 / sq m. two industrial estates within Serang introduced new prices. Continuing enquiries combined with the scarcity of industrial land in this region have pushed developers to raise land prices.

Meanwhile, Bekasi saw a modest percentage of increase in land prices, at 4.3% QoQ. this relatively small increase was due to the fact that land prices in this area are already higher than in other regions. two industrial estates initiated new land prices during the reviewed quarter. Furthermore, the Bekasi region commands the highest land prices compared to other regions.

One industrial estate in Bogor drove the most significant changes in the price of industrial land. In less than one year, the price of industrial land has been adjusted three times making the land price in Bogor relatively the same as in Bekasi.

Industrial Land Prices

greater jakarta industrial land prices


$0

$30

$60

$90

$120

$150

$180

$210

$240

2006 2007 2008 2009 2010 2011 2012 2013YtD

US

$/sq

m

Bogor tangerang karawang Bekasi Serang

automotive72%

Food & Beverage

7%Printing

0%

Steel-related3%

Chemicals4%

Logistics/Warehouse

2%

Packaging1%

Building Material

5%

Medical0%

Others5%



industrial maintenance costUntil the first quarter of 2013, it was obvious to see that land availability remains the major issue holding back the industrial. total sales recorded during the first quarter of 2013 only represented 26% of the “real” transactions because the remaining are pre-committed transactions. this year, many industrial estates will be focusing on delivery due to the pre-commitment they made prior to the hand-over process.

New industrial land stock will not be available this year and if there is, landlords will tend to prioritise their existing tenants with expansion plans rather than having new tenants.

We anticipate that the continued wave of land price increases will still take place during the remainder of 2013 subject to land availability. Some industrial estates have indicated a price adjustment for this year, waiting for their readiness in having a ready-to-build industrial lot.

Should the momentum of economic progress be maintained through 2013, active industries will remain the same. Inquiries will still come from automotive, warehouse and logistics, consumer goods, food, building materials, chemicals and steel-related industries.

greater jakarta industrial maintenance cost


industrial land prices and maintenance costs*

region Land Price (sq m) Maintenance Costs (/sq m/month)

Lowest Highest average Lowest Highest averageBogor US$ 206.3 US$ 206.3 US$ 206.3 US$ 0.07 US$ 0.08 US$ 0.07tangerang US$ 83.3 US$ 206.3 US$ 139.3 US$ 0.04 US$ 0.11 US$ 0.06karawang US$ 150.00 US$ 190.0 US$ 170.0 US$ 0.05 US$ 0.06 US$ 0.06Bekasi US$ 180.0 US$ 309.5 US$ 215.0 US$ 0.06 US$ 0.07 US$ 0.06Serang US$ 123.8 US$ 154.7 US$ 139.3 US$ 0.03 US$ 0.05 US$ 0.04

Colliers International Indonesia - research*1US$ = rp 9,694

$0.00$0.01$0.02$0.03$0.04$0.05$0.06$0.07$0.08$0.09

2006 2007 2008 2009 2010 2011 2012 2013YtD

US

$/sq

m/m

onth

Bogor tangerang karawang Bekasi Serang



colliers international indonesia:

World trade Centre 10th & 14th floorjalan jenderal Sudirman kav. 29 - 31jakarta 12920Indonesiatel 62 21 521 1400fax 62 21 521 1411

482 offices in 62 countries on 6 continentsUnited States: 140Canada: 42Latin america: 20asia Pacific: 195EMEa: 85

• $2 billion in annual revenue

• 103.6 square meter under management

• Over 13,500 professionals

Copyright 2012 Colliers International

the information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inac-curacies. readers are encouraged to consult their pro-fessional advisors prior to acting on any of the material contained in this report.

www.colliers.com

accelerating success.

Michael Broomell Managing Director

World trade Centre 10th & 14th floorjalan jenderal Sudirman kav. 29 - 31jakarta 12920Indonesiatel 62 21 521 1400 ext 131fax 62 21 521 1411

Ferry Salantoassociate Director, research

World trade Centre 10th & 14th floorjalan jenderal Sudirman kav. 29 - 31jakarta 12920Indonesiatel 62 21 521 1400 ext 134fax 62 21 521 1411Email: [email protected]

Until the first quarter of 2013, it was obvious to see that land availability remains the major issue holding back the industrial. total sales recorded during the first quarter of 2013 only represented 26% of the “real” transactions because the remaining are pre-committed transactions. this year, many industrial estates will be focusing on delivery due to the pre-commitment they made prior to the hand-over process. New industrial land stock will not be available this year and if there is, landlords will tend to prioritise their existing tenants with expansion plans rather than having new tenants.

We anticipate that the continued wave of land price increases will still take place during the remainder of 2013 subject to land availability. Some industrial estates have indicated a price adjustment for this year, waiting for their readiness in having a ready-to-build industrial lot.Should the momentum of economic progress be maintained through 2013, active industries will remain the same. Inquiries will still come from automotive, warehouse and logistics, consumer goods, food, building materials, chemicals and steel-related industries.

Outlook


201307 reif in brief

Documents

average of us

sq mmonth

jakarta office market

total office space

retail space

future office buildings

south jakarta

apartment prices