jpmr 2 q16

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On Point Jakarta Property Market Review

Second Quarter 2016

1 JLL | Research Report Jakarta Property Market Review 2Q14

ASIA PACIFIC Dr Jane Murray Head of Research – Asia Pacific +852 2846 5274 [email protected] GREATER CHINA HONG KONG Denis Ma Head of Research – Hong Kong +852 2846 5276 [email protected] BEIJING Steven Mc Cord Head of Research – Beijing +86 10 5922 1379 [email protected] SHANGHAI Joe Zhou Head of Research – Shanghai +86 21 6133 5451 [email protected]

GUANGZHOU Silvia Zheng Manager +86 20 3891 1238 [email protected] NORTH ASIA JAPAN Takeshi Akagi Head of Research – Japan +81 3 5501 9235 [email protected] KOREA Yongmin Lee Head of Research – South Korea +82 2 3704 8836 [email protected]

SOUTH EAST ASIA SINGAPORE Dr Chua Yang Liang Head of Research – South East Asia & Singapore +65 6539 9814 [email protected]

INDONESIA James Taylor Head of Research – Indonesia +62 21 2922 3888 [email protected] THE PHILIPPINES Claro Cordero Head of Research – Philippines +63 2 729 5642 [email protected] THAILAND Andrew Gulbrandson Head of Research – Thailand +66 2 902 0887 [email protected] VIETNAM Joseph Yee Regional Director, Valuation Advisory +84 8 3910 3968 [email protected] INDIA Ashutosh Limaye Head – Research & REIS +91 22 2482 8400 [email protected] AUSTRALIA David Rees Head of Research – Australasia +61 2 9220 8514 [email protected] NEW ZEALAND Chris Dibble Researching and Consulting Manager +64 9 366 1666 [email protected]

Jones Lang LaSalle Research Asia Pacific

mailto:[email protected]



Jakarta Property Market Review Second Quarter of 2016

TABLE OF CONTENTS I. The Economy………………………………………………………………………..02 II. CBD Office Market …………………………………………………………………03

III. Non CBD Office Market…………………………………………………………….05 IV. Retail Market……………………………………………………………………….. 07 V. Residential Market…………………………………………………………………. 09

Copyright © JLL 2016. All rights reserved.

No part of this publication may be reproduced or copied without prior written permission from JLL. The information in this publication should be regarded solely as a general guide. Whilst care has been taken in its preparation, no representation is made or responsibility accepted for the accuracy of the whole or any part.


The Economy Following on from what was a challenging year in 2015, there are signs of improvements in 2016. Infrastructure spending picked up in late 2015, the rupiah improved significantly against the US dollar and stabilised in 1H16 and the Joko ‘Jokowi’ Widodo administration seems to be making some headway in terms of easing bureaucracy and cutting red tape. However, while the mood is brighter, improvements do not, as yet, appear to be significantly reflected in headline economic growth figures (2Q16 GDP growth figures had not been released at the time of writing).

While Brexit made the headlines globally, we believe the impact on Indonesia will be limited. The UK accounts for just 1% of exports and 5% of imports although Indonesia could be impacted if larger trading partners and/or the broader global economy suffered – but negative effects would likely be proportional to global trends. One concern in the event of a global shock such as Brexit would be capital flight to safety from emerging markets such as Indonesia. However, the rupiah (also JCI) performed well since Brexit – largely due the announcement of a tax amnesty. This emphasizes that the market views more immediate, local issues as more relevant than Brexit.

The long awaited tax amnesty bill was passed and became effective in June. The tax amnesty Law is a waiver of tax due, administrative sanctions, and tax crime sanctions. Tax rates of 2%, 3% and 5% have been reported for funds repatriated respectively in the first, second and third quarters from 1st July 2016, while tax rates of 4%, 6% and 10% respectively would be applicable for non-repatriated declarations.

The tax amnesty’s potential impact on the market is huge. It is intended to accelerate economic growth and restructuring through asset repatriation, boost fairer tax reforms with an expanded tax base, and increase tax revenue to fund development in the country. According to Bank Indonesia, it is estimated that IDR 560 trillion (approximately USD 43 billion) could be repatriated and GDP growth could be boosted by up to 0.3 percentage points.

It was previously suggested that repatriated assets would be required to be invested in government bonds for a period of one year but the regulations suggest that the declared funds may be invested in the broader economy – including other investment vehicles and, potentially, real estate. The benchmark interest rate has now been cut four times (25 basis points each time) in 2016 and now stands at 6.5%. It has been reported that from end-August 2016, the seven day floating reverse repo rate will be adopted as the benchmark rate, meaning further reductions are likely. Interest rate cuts have yet to translate into lower mortgage rates.

USD/IDR exchange rate

Source: Bank Indonesia Inflation and Interest Rate

Source: Bank Indonesia

Quarterly GDP Growth (National)

Source: Oxford Economics, July 2016

13,180

7,000

9,000

11,000

13,000

15,000

17,000

Dec

-08

Mar

-09

Jun-

09S

ep-0

9D

ec-0

9M

ar-1

0Ju

n-10

Sep

-10

Dec

-10

Mar

-11

Jun-

11S

ep-1

1D

ec-1

1M

ar-1

2Ju

n-12

Sep

-12

Dec

-12

Mar

-13

Jun-

13S

ep-1

3D

ec-1

3M

ar-1

4Ju

n-14

Sep

-14

Dec

-14

Mar

-15

Jun-

15S

ep-1

5D

ec-1

5M

ar-1

6Ju

n-16

IDR

per

US

D

3,45%

6.50%

0%

2%

4%

6%

8%

10%

Dec

-11

Mar

-12

Jun-

12

Sep

-12

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Sep

-14

Dec

-14

Mar

-15

Jun-

15

Sep

-15

Dec

-15

Mar

-16

Jun-

16

Inflation BI Rate

Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 Q42015 Q12016 Q22016

4.6

4.6

4.7

4.7

4.8

4.8

4.9

4.9

5.0

5.0

5.1

%


CBD Office

Demand

The packed supply schedule and falling rents are such

that grade A affordability and availability of space are

improving to the extent that some tenants are opting to

upgrade from their existing premises. As such, net

absorption was, once again negative in the grade B and

C markets in 2Q16 while the grade A market saw

positive net absorption.

Follow several quarters of leasing activity, a number of

e-commerce firms continued expanding in 2Q16. Space

requirements for these kinds of tenants are currently in

the 1 – 3,000 sqm range but there is potential for strong

growth. However, the oil & gas and mining sectors

remained weak and there are few such firms, local or

international that are not in downsizing mode.

While leasing sentiment is improved on that witnessed

towards the end of 2015, tenants are aware of the

bargaining power which they possess and landlords

willing to offer significant discounts are best positioned

to secure tenants and boost occupancy levels.

Reflecting this, two projects completed in 2H15, offering

significant discounts on market rents, are now reporting

occupancy levels of above 60%.

Net Absorption

Source: JLL Research

Supply

After limited supply in 2014, two more completions in

2Q16 meant that we have now seen new supply in the

CBD for six quarters in succession. New supply this

quarter totaled around 140,000 sqm of premium grade

A space.

Capital Place, with approximately 90,000 sqm of SGA

was developed by Singapore sovereign wealth fund

GIC. This project is located on Gatot Subroto in the CBD

and will ultimately have direct access to the Sudirman

Central Business District (SCBD) – arguably Jakarta’s

most desirable commercial location.

International Finance Centre Tower 2 (IFC 2) is located

on Sudirman, Jakarta’s primary north-south arterial

thoroughfare. This 50,000 sqm (SGA) project was

developed by Singapore’s Keppel Land and is located

directly adjacent to tower 1 of the same development.

Supply, Demand and Occupancy


Rents

Landlords are acutely aware of the supply situation and

many have been lowering quotations in order to boost

occupancy levels. Rising vacancy rates have meant that

tenants’ options are increasing by the quarter and those

looking for space remain at an advantage in rental

negotiations. Grade A rents continued to fall in 2Q16 (-

2.8% q-o-q).

Historically, some smaller local firms or back-office

operations chose to locate outside of the CBD due to

attractive rental levels. However, the huge volume of

pipeline supply and decreasing rents in the CBD are

-50,000

0

50,000

100,000

150,000

200,000

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

Sqm

Grade A Grade B Grade C

60%

65%

70%

75%

80%

85%

90%

95%

100%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

1H

16

Occupancy

Sqm

Net Absorption New Supply Occupancy

Enquiry levels remained healthy in 2Q16 and the

e-commerce sector continued expanding. More

new supply caused occupancy to fall further.

The current supply boom, which started in early

2015 is such that we have now seen new grade

A completions in each quarter since 1Q15.


such that these tenants may increasingly view projects

in core locations as viable options.

Net Achievable Rent


Outlook Only half way through the year and 2016 is already a

record year in terms of supply; several more completions

in the remainder of the year are expected to put further

downward pressure on occupancy levels.

Demand from the oil & gas and mining sectors is likely

to remain weak. The performance of other sectors is

likely to be mixed with further expansion demand from

e-commerce firms and continued enquiries from banks,

insurance companies, law firms and professional

services. We expect upgrade demand to remain a theme

as the packed supply pipeline and falling rents provide

tenants with more options. Continued competition

between CBD and non-CBD projects is also likely.

Vacancy rates are set to remain comfortably in double

digits as more new supply enters the market. As such,

we expect landlords to remain flexible and further single

digit quarterly rental decreases are likely over the next

12 months.

Historically, few en-bloc transactions involving prime

assets have been closed in Jakarta and while this is

likely to continue to be the case in 2016, interest is likely

to remain strong. Forward purchases or development

projects are expected to continue to be the most likely

point of entry for interested parties.

Demand and Occupancy Outlook


Rental Outlook


CBD rental clock


0

100,000

200,000

300,000

400,000

500,000

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

IDR

/sqm

/mth

Grade A Grade B Grade C Grade Premium

0%

20%

40%

60%

80%

100%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

Occupancy

Sqm

Net Absorption New Supply Occupancy

0

100,000

200,000

300,000

400,000

500,000

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

IDR

/sqm

/mth

Premium Grade A

Growth

Slowing

Rents

Falling

Rents

Rising

Decline

Slowing

Jakarta

2020

Jakarta

2016


Non-CBD Office

Demand

Our coverage of the Non-CBD market encapsulates

North, South, East, West and Central Jakarta as well as

TB Simatupang - which is captured in the South Jakarta

dataset. It is important to make this distinction, as the

demand profile in these different geographies varies. In

North, East, West and Central Jakarta the demand

profile is one of smaller, local companies which do not

necessarily need to occupy space in prime buildings in

the best locations. Many buildings in these areas are

strata-title sold. South Jakarta/TB Simatupang, on the

other hand, shares a more similar demand profile to the

CBD due to proximity to core Jakarta and the presence

of some high quality buildings.

Downsizing activities from oil & gas and mining firms in

the CBD has been mirrored in non-CBD locations such

as TB Simatupang. However, high quality buildings at

relatively low rental levels continued to attract tenants

from a broad spectrum of industries.

Nevertheless, TB Simatupang landlords (as well as non-

CBD landlords more generally) are increasingly

becoming aware that falling rents in the CBD mean that

some non-CBD tenants are increasingly viewing some

CBD projects as viable alternatives.

Net Absorption


Supply

Four new projects were completed in 2Q16 adding more

than 120,000 sqm to total stock. Around 75% of the

newly completed space (90,000 sqm) was located North

Jakarta. Altira Business Park (51,600 sqm) is located

near the port at Tanjung Priok and Office Tower @ The

Mansion (38,100 sqm) is located in Kemayoran. Pre-

commitment levels in these projects averaged around

20%.

The other two new completions were located in South

Jakarta. Nariba Business Suites (5,525 sqm), located in

Mampang, was fully leased to a call centre while ITS

tower (28,150 sqm) reported pre-commitment levels of

30%.



-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

Sqm

Grade B Grade C

60%

65%

70%

75%

80%

85%

90%

95%

100%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

-1H

Occupancy

Sqm

New Supply Net Take-up Occupancy

TB Simatupang and South Jakarta occupancy

levels stabilised in 2Q16 while North Jakarta saw

supply cause the occupancy rate to drop sharply. Four new projects were completed in 2Q16.

Around 75% of the 120,000 sqm of newly

delivered space is North Jakarta.


Rents

While occupancy levels in South Jakarta and TB

Simatupang have now stabilized after falling sharply in

2015, occupancy levels remain relatively low. Landlords

in these areas also continue to compete with the CBD

where rents and occupancy levels continue to fall. In the

face of this competition, TB Simatupang landlords

continued to lower quotations in 2Q16 and average rents

came down by around 1.5% q-o-q.

In other non-CBD locations, where occupancy levels

remained healthy, landlords were able to hold rents

steady, meaning a stable scenario q-o-q. North Jakarta

rents also remained stable despite occupancy falling

dramatically. This decrease, however, must be seen in

context. The North Jakarta basket is relatively small

meaning new completions have the potential to skew

occupancy levels. Existing projects continued to report

healthy occupancy levels.

Net Achievable Rent


Outlook As with the situation in the CBD, a large volume of new

supply is likely over the forecast horizon with more than

800,000 sqm expected to be delivered in non-CBD

locations up to 2020. South Jakarta is expected to see

receive more than 350,000 sqm (2016 – 2020) with the

bulk of the South Jakarta supply (230,000 sqm) set to be

completed in TB Simatupang.

As new CBD supply comes online, occupancy falls and

rental rates are lowered, we expect to see sustained

competition between some CBD and non-CBD projects.

Some tenants may relocate depending on their cost and

space requirements. Firms which may otherwise have

chosen non-CBD locations may increasingly view

cheaper CBD projects as viable alternatives. Other firms

may continue to be attracted by relatively cheap rental

quotations in non-CBD locations.

In the short-term, we may see further minor rental

compression in South Jakarta and TB Simatupang as

new supply comes on line and puts downward pressure

on occupancy. However, medium-to long term, we feel

that there is room for some rental growth as we expect

sustained demand from smaller local firms, back office

operations and companies that do not necessarily need

prime office buildings in the best locations.

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

IDR

/sqm

/mth

Central Jakarta South Jakarta North Jakarta

East Jakarta West Jakarta TB Simatupang

Relatively low occupancy levels and increasing

competition with the CBD caused TB

Simatupang rents to fall by 1.5% q-o-q.


Retail Market

Demand

Net absorption tends to be supply driven in the Jakarta

prime retail market. A moratorium on stand-alone retail

development in core-Jakarta has been in place since

2011, meaning recent years have seen little new supply

entering the market. As such, occupancy levels have

remained high and demand remains supply driven.

Spikes in net absorption in recent quarters have been

driven by take-up in new or recent completions.

As new supply has been extremely limited in recent

years, occupancy levels have remained consistently

healthy. Landlords of top performing malls continued to

report waiting lists for prime units in 2Q16. Given the

lack of available space in core areas of the city,

retailers may begin to explore options in Greater

Jakarta or further afield which are not impacted by the

moratorium.

F&B remained the most active segment in 2Q16 while

the performance of luxury and fashion brands was

mixed.

Retail Net Absorption


Supply

While the previously discussed moratorium is not

official policy, the situation is such that the Jakarta

governor is extremely selective in signing off on new

retail projects in core areas of the city. It has been

reported that projects in the east of the city are more

likely to gain approval than those elsewhere as the

market is less developed in that area.

Bassura City was completed in 2Q16. This 29,000 sqm

East Jakarta project is part of a mixed-use development

by Synthesis Development. Already 90% occupied by

mostly lower-middle and F&B tenants, this mall is likely

to service local community rather than attract footfall

from further afield.



Rents

2015 was a challenging year in the consumer market

with anecdotal evidence suggesting smaller consumer

basket sizes and reduced revenues. However, the lack

of supply and consistently healthy occupancy levels

were such that rents continued on their upward

trajectory. 2016 has seen a continuation of this trend,

with landlords able to achieve low, single digit quarterly

rental hikes. Growth of 1.3% q-o-q in 1Q16 was followed

by 1.5% q-o-q growth in the second quarter.

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

Sqm

60%

70%

80%

90%

100%

0

50,000

100,000

150,000

200,000

250,000

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

1H

Occupancy

Sqm

Net Take-up New Supply Occupancy

Demand remains supply driven in Jakarta and a

non-prime completion in 2Q16 caused a spike in

net absorption.

A rare new mall was delivered in 2Q16.

Bassura City is part of a mixed-use

development in East Jakarta.


With persistent low vacancy rates and a thin supply

schedule coupled with a huge, growing population and

expanding middle-class, many would expect rental

growth to take-off; this, however, has not been the case.

Several large retail groups, such as MAP, operate in

Indonesia with many brands under their umbrella. As

such, these groups are able to leverage significant

bargaining power and keep rental hikes to a relative

minimum.

Landlords of top performing malls continued to be able

to hike up rents and enjoy strong visitor traffic. Those

landlords of poorer performing malls continued to re-jig

tenant mixes in order to attract footfall.

Retail Rents


Outlook

Extremely limited supply is likely to mean a continuation

of the historical trend and low vacancy rates are likely to

persist over the five year forecast horizon. We expect

F&B to continue to be the most active retail segment.

With no end to the moratorium on stand-alone retail

development in Jakarta’s CBD in sight, supply is

expected to be thin over the next five years. Central Park

Extension (44,000 sqm) is earmarked for completion in

early 2016. Developed by Agung Podomoro, this mixed-

use development in the west of the city comprises retail

and SOHO space adjacent to the existing Central Park

development.

Despite low vacancy rates and limited supply, rental

growth is unlikely to spike significantly although single-

digit annual rental growth is likely over the forecast

horizon. Landlords are likely to continue to favour a

strategy of long term stability over short term gain and

many may be willing to forgo big rental hikes in favour of

stable occupancy.

50,000

150,000

250,000

350,000

450,000

550,000

650,000

4Q08

2Q09

4Q09

2Q10

4Q10

2Q11

4Q11

2Q12

4Q12

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

IDR

per

sqm

per

mon

th

Upper Middle Middle Low

Rents continued to grow slowly and steadily in

the prime retail market with 2Q16 q-o-q growth

coming in at 1.5%.

The historical themes of limited supply, healthy

occupancy levels and slow steady rental growth

are likely to continue over the forecast horizon.


Residential Market

Condominium Demand & Supply

The luxury sales market remained weak in 2Q16.

Sentiment is yet to recover after macroeconomic

headwinds and rupiah depreciation in 2015 and current

luxury and super luxury tax measures continue to instill

caution in buyers. The super luxury tax threshold (IDR 5

billion) is, illogically, lower than its luxury counterpart

(IDR 10 billion) and fear of being subject to an audit is

putting off would-be buyers of super luxury products.

Demand remained strongest in the middle and middle-

low segments where affordability is greater and the tax

burden lower.

A number of recent regulations are likely to boost

residential sales. The benchmark interest rate was

reduced by 25 basis points for the fourth time this year

and now stands at 6.5%. However, this is yet to translate

into lower mortgage rates. The loan to value (LTV) ratio

was once again relaxed and adjustments to mortgage

regulations now allow for off-plan borrowing. The effects

of these regulations are likely to be felt strongest in the

middle and middle-lower segments were buyers rely

more on loans.

Easily the biggest news of the quarter was the tax

amnesty. The regulations allow for repatriated funds to

be invested in a number of investment vehicles

including, potentially, real estate. This could ultimately

provide a huge boost to the condominium market in

general and, more specifically the luxury market.

In the sales market, demand thinned out in the luxury

market in 2Q15 and few high-end units have been

offered to the market since that time. All seven new

launches in 2Q16 were middle and lower-middle

projects.

Condominium sales


Condominium Launches


Condominium Supply by Area


Condominium prices

In what continues to be an environment of relatively

weak demand and slow sales, prices remained flat in the

luxury market.

In the middle and middle-low segments, where some

demand remains, prices either remained flat or edged up

slightly.

0

1,000

2,000

3,000

4,000

5,000

6,000

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

Units

0

1,000

2,000

3,000

4,000

5,000

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

Un

its

Upper Middle Lower Middle

12%

18%

24%

19%4%

23%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 -2QCentral Jakarta South Jakarta North Jakarta

West Jakarta East Jakarta CBD Jakarta

Tax amnesty finally announced; government

continues to implement measures to stimulate

the market.

Luxury market prices did not increase in 2015

and continued to remain unmoved in the first

half of 2016.


Even with relatively weak demand, particularly for luxury

projects, it is unlikely that we will see any price

decreases in the primary market. Developers prefer to

push prices up over time to appease early-bird buyers

and if demand should remain weak, they are more likely

to delay project launches until such a time that the

market improves.

Condominium prices


Outlook

Strong underlying fundamentals indicate that the

medium to long term potential for the Jakarta residential

market remains strong. We believe that persisting weak

demand is due to sentiment rather than affordability and

several factors would go a long way towards boosting

demand. Continued stability in the USD/IDR exchange

rate, an improving macroeconomic environment and

clear, consistent communication on future adjustments

to taxes would improve buyers’ confidence.

A stable or improving rupiah would go some way

towards boosting sentiment in the Jakarta

condominium market.

While the impact from recent regulations regarding non-

Indonesians buying property is likely to be limited, the

potential positive impact of the much-discussed tax

amnesty is huge.

Short-term demand for condominiums is likely to

continue to be strongest in the lower-middle and middle

segments where affordability is greater and the tax

burden lower. We believe any lull in residential sales

would only be a short-term blip rather than a long term

trend as Jakarta’s huge, growing population and

expanding middle class provides the fundamental

demand.

While supportive regulations, such as LTV ratio

adjustments and alterations to mortgage regulations, are

to be welcomed, current taxes continue to hamper the

market. We believe further adjustments to luxury and

super luxury taxes are necessary for the luxury market

to reach its potential.

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

IDR

per

sqm

Lower middle Middle UpperHigh-end Luxury


Glossary

Office Glossary

The CBD sub-market is the commercial area bounded by Jl Sudirman-Thamrin, Jl Gatot Subroto and Jl HR Rasuna Said (Kuningan).

The Non-CBD sub-market covers the commercial areas outside the CBD, which are classified by municipality, i.e. Central Jakarta, South Jakarta, East Jakarta, West Jakarta and North Jakarta.

The net absorption (take-up) rate refers to the net cumulative increase in space occupied in a particular period.

Prime refers to a property that is rated most highly in terms of quality, location, facilities, etc.

Vacancy rate refers to the ratio of vacant space to the total stock (leasable area) available.

Gross rent refers to the total rental payable by tenants. This is equivalent to the sum of net rental plus outgoings.

Base rental is the minimum rental payable for an office space without taking into account any add-ons, such as service charge and after-hours utility costs that make up the total lease package.

Service charge is the collective name for the cost of air-conditioning, other services and management charges passed on to tenants.

Retail Glossary

Rental shopping malls are shopping centres that are offered for lease by the landlord on a monthly basis. The typical lease term for a specialty store is between one and three years.

Strata-title trade centres are shopping centres that are offered for sale by the developer. A trade centre mostly consists of small kiosks that typically range from 4-20 sqm.

The net absorption (take-up) rate refers to the net cumulative increase in space occupied in a particular period.

Prime retail space refers to space in a mall that is located in prime areas (i.e. lobby level up to the first three floors).

Vacancy rate is the ratio of vacant space to the total stock (leasable area) available.

Gross rental refers to the total rental payable by tenants. This is equivalent to the sum of net rental plus outgoings.

Base rental is the minimum rental for a retail space without taking into account any add-ons, such as service charges and after-hours utility costs that make up the total lease package.

Service charge is the collective name for the cost of air-conditioning and other services, and management charges passed on to the tenant.

Residential Glossary

Condominiums are a form of multi-stories dwelling comprising units that are offered for sale by the developer. Each unit is owned by a different person and the common areas are owned jointly by all such individual owners.

Apartments are a type of accommodation (in Jakarta, they are typically in a high-rise residential building) that is built purposely for rent.

Net absorption (take-up) rate for apartments refers to the net cumulative increase in the number of occupied units over a particular period; for condominiums, it refers to the net sales in the quarter.

Vacancy rates for apartments refers to the ratio of vacant units to the total stock (leasable units) available; for condominiums, it refers to the ratio of total unsold units to the total stock over a particular period.

Base rental for apartments refers to the minimum rental for an apartment unit without taking into account any add-ons, such as service charges, that make up the total lease package.

Service charges for apartments refers to the collective name for the cost of public utilities and maintenance, including management charges passed on to the tenant.


About JLL Research

JLL Research is a multi-disciplinary professional group with core competencies in economics, real estate market analysis and forecasting, locational analysis and investment strategy. The group is able to draw on an extensive range and depth of experience from the Firm’s network of offices, operating across more than 100 key markets worldwide. Our aim is to provide high-level analytical research services to assist practical decision-making in all aspects of real estate.

The Asia Pacific Research Group monitors rentals, capital values, demand and supply factors, vacancy rates, investment yields, leasing and investment activity, and other significant trends and government policies relating to all sectors of the property market including office, retail, residential, industrial and hotels. We deliver a range of global, regional and local publications as well as research-based consultancy services.

For Research enquiries, contact

James Taylor Head of Research Indonesia +62 21 2922 3888 [email protected]

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making quality decisions. The world’s best real estate intelligence and knowledge base puts our clients in the

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