Property insights for

ITB | 14 October 2019

Mulya Amri Ph.D | JPI Program Director @muli_amri @jakartapropertyinstitute

architecture students

JPI wants to make Jakarta a• Livable city• Affordable city• Investment-friendly city

2

TODAY’S TOPICS

A.QUICK INTRO TO THEPROPERTY INDUSTRY

B.DEVELOPER PERSPECTIVES FOR YOUR DESIGN BRIEF

Comments & questions?Ask anytime!Or go to sli.do | Use the hastag #itbjpi

QUICK INTRO TOTHE PROPERTYINDUSTRY

ROLE OF ARCHITECT1.

IN THE VALUE CHAIN

Property ManagementConstructionSales &

MarketingConcept

DevelopmentLand

Acquisition

• Ahli hukum• Konsultan properti• Konsultan

perencana• Ahli ekonomi,

keuangan, sosial, lingkungan

• Etc.

• Kontraktor• Pengawas• Supplier material• Pembiayaan• Asuransi• Etc.

• Pengelolaan• Pemeliharaan• Utilitas• Cleaning

service, security• Etc.

The Property Industry’s Value Chain

SOME KEY PLAYERS2.

IN INDONESIA

JPI members’ properties in

Jakarta

High-rise, high-density

projects

REAL ESTATE CYCLES3.

Property market follows the economy

Jakarta CBD Office MarketAround 168,000 sqm absorbed in year to date

© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Technology

Co-Working

Online Marketplaces

Travel Booking

Online Gaming

Fintech

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Ytd

-2018

Sqm

Net Absorption

Historical Average:

194,000 sqm

151,000 sqm 240,000 sqm

65%

70%

75%

80%

85%

90%

95%

100%

0

100,000

200,000

300,000

400,000

500,000

600,000

Occupancy

Sqm

Supply, Demand & Occupancy

Net Absorption New Supply Occupancy

0

100,000

200,000

300,000

400,000

500,000

200820092010201120122013201420152016201720182019202020212022

IDR

per

sqm

per

month Rents

Premium Grade A

© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Jakarta Retail MarketLimited new supply; F&B and entertainment tenants strong

Out with the old…Department stores and traditional retail formals

…in with the newF&B, Entertainment & Fast Fashion

Limited new supply but existing malls are changing…

E-commerce

Competing with department

stores and specialty stores

Mobile Payment

Changing the way we pay

Co-working

Spicing up tenant mixes

Social Media

Increasing foot traffic

60%

65%

70%

75%

80%

85%

90%

95%

100%

0

50,000

100,000

150,000

200,000

250,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Occupancy

Sqm

Net absorption New Supply Occupancy rate

COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL

PREPARED FOR [CLIENT’S NAME]

APARTMENT MARKET

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

CBD South Jakarta Non-prime area

0

10

20

30

40

50

60

70

80

90

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

Low Middle Upper Luxury

19,883 17,721

12,829 7,837

-

50,000

100,000

150,000

200,000

250,000

300,000

20

12

20

13

20

14

20

15

20

16

20

17

20

18Y

TD

20

18F

20

19F

20

20F

20

21F

Annual

CUMULATIVE SUPPLY (UNIT)

AVERAGE PRICES BY AREAAVERAGE PRICES BY SEGMENT

• The overall apartment market during the first semester of 2018 was slower with less construction and sales activities. We believe this will continue for the remainder of 2018.

• We believe that the buying capacity still remains, but at this current time it is not easy to convince investor-type of buyers to invest in property.

• Slower capital appreciation and generally sluggish rental market, as a result of stiff competition from large number of newly completed supply, have led to the postponement of apartment purchases.

COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL

PREPARED FOR [CLIENT’S NAME]

HOTEL MARKET

ROOM SUPPLY

USD 0

USD 20

USD 40

USD 60

USD 80

USD 100

USD 120

USD 140

USD 160

0%

20%

40%

60%

80%

100%

2014 2015 2016 2017 YTD2018

2019E 2020E 2021E

Surabaya Jakarta Bali

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2014 2015 2016 2017 2018 2019E 2020E 2021E

Surabaya Jakarta Bali

AVERAGE DAILY RATE (LINE)AVERAGE OCCUPANCY RATE (BAR)

DEVELOPER PERSPECTIVES FOR YOURDESIGN BRIEF

CONSIDER1.

LAND VALUE

Why does the CBD have a distinctive skyline?

make it easier to meet PEOPLE & trigger new IDEAS!

COMPACT CITIES

Walkable districts have higher PROPERTY VALUE!

transit oriented development allows us to have MORE COMPACT and WALKABLE cities

1. Mass transit station in city center2. Without good connectivity/walkability, people must detour (or drive!) to reach the transit station.

3. Pedestrian paths should allow better connectivity4. Foot traffic creates opportunity for retail, raises property value, improves the urban environment

“Horizontal density” leads to expensive property and loss of green open space

DESIGN2.

SENSIBLY

Consider saleable/usable floor area

What the tenant/buyer gets, and is responsible for

What the property manager maintains (but ultimately paid bytenant!)

Consider building maintenance

Green buildings please!

THINK3.

LONG-TERM

Adaptive reuse: Ex-grain warehouse is now a

museum (MoCAA) with luxury hotel (The Silo) on top

Adaptive reuse: What to do with over-provided

parking space?

Adaptive reuse: Ideas for Sequis Center, Jakarta?

Adaptive reuse: Ideas for Sequis Center, Jakarta?

LET’S HAVEA DISCUSSION

Market Regulations

ConceptMarket trendsChanging demography

ZoningKLB; KDB; KDH

Kewajiban

Finance Legacy

IRRCapital structureLeasing agreementsTax structure

Iconic designEnvironmental and social impact

Prestige

Developers’ considerations

JPI is trying to make the IMB more transparent and efficient

Waktu untuk mendapatkan IMB (untuk bangunan >5000 m2)

2 tahun (630 hari)

These projects were funded by the private sector through charges for development rights

Semanggi interchange right-turn ramps

Improvement in pedestrian bridges & sidewalks

Rusun Rawa Bebek, Cakung, Jakarta Timur

Rusun Marunda, Cilincing, Jakarta Utara

Rusun Rorotan, Cilincing, Jakarta Utara

Various Public Flats

Create affordable living space in the city centre through public-private partnerships

State-owned corporations (BUMN, BUMD), have land in strategic places that are under utilized.

Sometimes, developers are responsible to provide affordable housing.

The problem: land is expensive, so the affordable flats are built in far flung areas. Therefore: unattractive!

Affordable housing cold be built on top of public markets, terminals, etc. for mutual benefit