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Report of apartment market in Jakarta, both supply-demand, its rate, new supply
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Research & Forecast Report
Apartment for Strata-titleSupply By the end of 1Q 2014, the cumulative supply of strata-title apartments in Jakarta grew at a moderate pace. The market received 1,246 new units, up by 0.9% QoQ, from the hand-over of several projects like Kemang Village (The Infinity Tower), Pakubuwono Terrace (North Tower), Sherwood Apartment (Wellington Tower) and Woodland Park (Matoa Tower). These 1,246 units, or 7.27% of the total projected 20,889 units that will be completed this year, are scattered in South and North Jakarta. The Infinity Tower is the fifth tower being handed over out of a total of seven towers at Kemang Village Residences. The Pakubuwono Terrace (North Tower) and Woodland Park (Matoa Tower) are brand new projects that are expecting to see more new towers in the next few years. In North Jakarta, Sherwood Residence, located in the Kelapa Gading area, had a new tower
completed during the quarter, called Wellington Tower. This project is considered one of the upper-class developments in that area.
Not all apartment projects are completed at the scheduled time. Some experience slow finishing work and are likely to be rescheduled to 2Q or even 3Q 2014.
The outlook for 2014 was predicted to be tough, particularly given the nationwide elections that could impact business decisions. The Central Bank’s policy to increase its benchmark interest rate and the minimum loan-to-value (LTV) caps for housing loans from 80 to 70%, and 60% for second mortgage loans, and 50% for third mortgage loans has dampened property acquisition. In addition, banks are restricted from extending loans used as down payments for home purchases. These measures are expected to reduce demand on residential properties for investment or speculation, instilling more prudent lending and a common prudential standard among banks.
“The strong sales performance of under-construction apartment projects continued to trigger increases in the average asking price to IDR24.4 million / sq m or a 2.5% increase q-o-q. The CBD fetched the highest average price at IDR 38.3 million / sq m, an increase of 5.8% q-o-q while the average price in South Jakarta was registered at IDR 26.7 million / sq m, which grew by 3.2% from the last quarter. Not only price, but the average gross rental rate of apartments for lease located in the CBD and South Jakarta also trended upward by 3.4% compared to the previous quarter in anticipation of the increase in the operational costs and was recorded at USD26.56 / sq m/month.”
- Ferry Salanto, Associate Director | Research
Accelerating success.
2 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
Source: Colliers International Indonesia - Research
List of Completed Projecs During 1Q 2014development location region developer no. of Units latest offering
price per sq m
Kemang Village (The Infinity) P. Antasari South Jakarta Lippo Karawaci 175 IDR30 million
Pakubuwono Terrace (Tower North) Kebayoran Lama South Jakarta PT Selaras Mitra Sejati 750 IDR15 million
Sherwood Apartment (Wellington) Kelapa Gading North Jakarta Summarecon 100 IDR22 million
Woodland Park (Matoa tower) Kalibata South Jakarta Group Kalibata 221 IDR16 million
Nevertheless, the abovementioned condition did not stop developers from launching new projects, as was seen in the first quarter of 2014. In fact, there are 14 newly launched projects scattered in four areas of Jakarta including the CBD, East Jakarta, South Jakarta, and West Jakarta. From the total of 5,286 new apartment units, South Jakarta contributes the largest at 41.5%, followed by West Jakarta at 36%, while the CBD area contributes only 22.5% from three apartment projects. These new projects are expected to be completed in the next two or four years. Some projects will have more than two towers that will be built in stages and therefore the completion time will take more than two years. The South Jakarta and West Jakarta areas are expecting to see abundant apartment projects over the next three to four years.
Some of the projects in South Jakarta are located in expatriate community locations, like Pondok Indah and Pangeran Antasari and therefore quote high prices compared to other non-prime locations like Pasar Minggu, Pejaten and Kebayoran Lama. Most of the projects in West Jakarta aim at the mid-low segment, characterised by a large number of units at a project and a relatively affordable price. Some projects in good locations are offered at higher prices. West Jakarta has been seeing many ongoing property developments including offices, apartments, and shopping centres. Underpinned by good infrastructure, like the toll roads connecting the area to the airport, West Jakarta continues to appeal to property investors.
Source: Colliers International Indonesia - Research
Newly Launched* Apartments During 1Q 2014development location region no. of Units expected completion
timeasking price
per sq m
Verde Two (2 Towers) Rasuna Said CBD 304 2016 IDR37 million
Anandamaya Residence (3 Towers) Sudirman CBD 500 2017 IDR50 million
Gayanti City Apartment (Tower I) Gatot Subroto CBD 198 2016 IDR33 million
Domaine (Tower I) Sudirman CBD 186 2017 IDR38 million
Bellevue Place Apartment MT Haryono South Jakarta 128 2016 IDR31 million
Kebayoran Icon Kebayoran Lama South Jakarta 256 2016 IDR19 million
One Otium Antasari South Jakarta 160 2017 IDR30 million
Kartika Residence (3 Towers) Pondok Indah South Jakarta 800 2018 IDR40 million
Foresque Apartment (3 Towers) Pasar Minggu South Jakarta 650 2017 IDR16 million
The Batik @ Pejaten Pejaten South Jakarta 200 2017 IDR15 million
Maqna Residence Meruya West Jakarta 380 2017 IDR17 million
Vittoria Residence (3 Towers) Daan Mogot West Jakarta 1,100 2017 IDR14 million
Wang Residence Kedoya West Jakarta 250 2017 IDR27 million
Veranda Kembangan West Jakarta 174 2016 IDR19 million
Note: * Newly Launched is when a new apartment development has secured development permit and is only officially introduced and offered in the market.
3 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
The Distribution of Newly Launched Apartment by Number of Units
Source: Colliers International Indonesia - Research
Supply of new apartment units during 2014 will be substantial, i.e. 20,889 units, and will continue in 2015 when the market is expected to see another 24,228 units. All in all, the total of apartments projected to come onto the market from 2014 - 2017 will be 62,197 new units, mainly supplied by West Jakarta with 22.4% of the total supply, followed by Central and South Jakarta with 20.4 and 20.2%, respectively.
New Supply Pipeline (2014 - 2017)apartment name location region no. of Units
2014
Woodland Park (Matoa tower) (1Q) Kalibata South Jakarta 221
Pakubuwono Terrace (Tower North) (1Q) Kebayoran Lama South Jakarta 750
Sherwood Residence (Wellington) (1Q) Kelapa Gading North Jakarta 100
Kemang Village (The Infinity) (1Q) Antasari South Jakarta 175
Ambassade Residence Tower A Puri Denpasar CBD 234
Raffles Residences Satrio CBD 64
MyHome Apartment at Ciputra World Satrio CBD 136
Setiabudi Sky Garden (tower 1) Rasuna Said CBD 426
Verde Apartment (Tower East) Rasuna Said CBD 114
Pasar Baru Mansion (2 towers) Pasar Baru Central Jakarta 520
Elpis Residence Gunung Sahari Central Jakarta 791
Capitol Park Apartment Salemba Central Jakarta 1,700
The Mansion at Dukuh Golf Residence (Aurora Tower) Kemayoran Central Jakarta 522
The Mansion at Dukuh Golf Residence (BellaVista Tower) Kemayoran Central Jakarta 612
The Green Pramuka (Tower Chrysant) Pramuka Central Jakarta 1,000
The Green Pramuka (Tower Bougenville) Pramuka Central Jakarta 1,000
Sentra Timur Residence II (2 Towers) Pasar Rebo East Jakarta 810
Titanium Square Pulo Gebang East Jakarta 725
The Hive @ Tamansari Cawang East Jakarta 422
Sherwood Residence (Regent) Kelapa Gading North Jakarta 100
Pluit Seaview (Tower Maldives) Pluit North Jakarta 940
Gading Greenhill Pegangsaan Dua North Jakarta 700
Northern Ancol Residence Ancol North Jakarta 800
La Venue - South Tower Pasar Minggu South Jakarta 341
Kemang Village (The Intercon) Antasari South Jakarta 400
The East at Essense Complex Dharmawangsa Dharmawangsa South Jakarta 244
continued
South Jakarta41.5%
West Jakarta36.0%
CBD22.5%
4 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
apartment name location region no. of Units
continuation
The Aspen at Admiralty Fatmawati South Jakarta 860
Pakubuwono Terrace (Tower South) Kebayoran Lama South Jakarta 720
The Pakubuwono Signature Pakubuwono South Jakarta 188
Senopati Penthouse Senopati South Jakarta 63
LA City Apartment (Tower A) Lenteng Agung South Jakarta 980
La Maison Barito Barito South Jakarta 80
Botanica Apartment (3 Towers) Simprug South Jakarta 626
The Bellevue at Pondok Indah Pondok Indah South Jakarta 40
Green Central Tower Cerberra Gajah Mada West Jakarta 420
The Windsor (Tower I) Puri Indah West Jakarta 176
The Windsor (Tower II) Puri Indah West Jakarta 164
Sky Terrace Lagoon Kalideres West Jakarta 525
Metro Park Residence Kebon Jeruk West Jakarta 1,200
Green Palm Residence @ Puri Kosambi West Jakarta 1,000
2015
East Park Apartment (Tower C) KRT Radjiman East Jakarta 550
The Residence (CWJ 2) Satrio CBD 119
The Orchad Satrio (CWJ 2) Satrio CBD 349
Setiabudi Sky Garden (tower 2) Setiabudi CBD 160
The Suite (W Hotel Tower) Satrio CBD 200
T - Plaza Residence (Tower B) Pejompongan Central Jakarta 500
Menteng Park Cikini Central Jakarta 756
The Grreen Pramuka (Tower Orchid) Pramuka Central Jakarta 1,000
The Grreen Pramuka (Tower Penelope) Pramuka Central Jakarta 1,000
The Green Pramuka (Tower Scarlet) Pramuka Central Jakarta 1,000
Eastonia Jatiwaringin East Jakarta 312
Green Signature Apartment MT. Haryono East Jakarta 800
Bassura City (Tower Flamboyan) Basuki Rahmat East Jakarta 1,000
Bassura City (Tower Edelweiss) Basuki Rahmat East Jakarta 1,000
Bassura City (Tower Dahlia) Basuki Rahmat East Jakarta 1,000
Bassura City (Tower Cattleya) Basuki Rahmat East Jakarta 600
Bassura City (Tower Alamanda) Basuki Rahmat East Jakarta 600
Teluk Intan (Tower Saphire) Teluk Gong North Jakarta 1,100
Tifolia Apartment Perintis Kemerdekaan North Jakarta 500
Pluit Seaview (Tower Belize) Pluit North Jakarta 300
Callia Apartment Perintis Kemerdekaan North Jakarta 560
The Oakwood Sky Garden (2 Towers) Pluit North Jakarta 700
Pluit Seaview (Tower Ibiza) Pluit West Jakarta 500
Pluit Seaview (Tower Bahama) Pluit South Jakarta 650
Green Bay Pluit (Sea View) Pluit North Jakarta 2,072
Kemang Village - The Bloomington Antasari South Jakarta 150
The Royal Olive Residence Tower I Buncit Raya South Jakarta 225
Woodland Park (Cendana Tower) Kalibata South Jakarta 218
Senopati Suites 2 Senopati South Jakarta 81
1 Park Avenue Gandaria South Jakarta 279
Nine Residence Warung Buncit South Jakarta 246
Providence Park Permata Hijau South Jakarta 114
continued
5 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
apartment name location region no. of Units
continuation
Kencana Residence Pondok Indah South Jakarta 173
District 8 (Tower Eternity) Senopati South Jakarta 400
District 8 (Tower Infinity) Senopati South Jakarta 280
Izzara Apartment (2 Tower @ 225 unit) TB. Simatupang South Jakarta 450
Lexington Rersidence (Tower 1) Pondok Pinang South Jakarta 270
Lexington Rersidence (Tower 2) Pondok Pinang South Jakarta 270
The Aspen Peak at Admiralty Fatmawati South Jakarta 644
Belmont Residence (Tower Montblanc) Meruya Ilir West Jakarta 350
Gianetti Apartment Kemanggisan West Jakarta 500
St. Moritz (New Presidential Tower) Puri Indah West Jakarta 150
Satu8 Residence Kedoya West Jakarta 174
The Nest Apartment Meruya Utara West Jakarta 1,100
Point 8 (Air Crew Tower) Daan Mogot West Jakarta 546
Gallery West Kebon Jeruk West Jakarta 280
2016
St Moritz (The New Ambassador Suite Tower) Puri Indah West Jakarta 200
The H Residence MT Haryono East Jakarta 383
Sudirman Suites Sudirman CBD 380
Senopati Suites 3 Senopati South Jakarta 54
Signature Park Grande MT Haryono East Jakarta 1,100
Grand Pakubuwono Terrace Kebayoran Lama South Jakarta 435
Sentosa Residence Cempaka Putih Central Jakarta 687
Gold Coast Apartment (Atlantic Tower) Pantai Indah Kapuk North Jakarta 568
Grand Pancoran Pancoran South Jakarta 120
Sudirman Hill Residence Karet Central Jakarta 255
Apartment Pejaten Park Residence Warung Buncit South Jakarta 380
Belmont Residence (TowerAthena) Meruya West Jakarta 165
Four Winds Permata Hijau South Jakarta 122
Capitol Suites Prapatan Raya Central Jakarta 327
Puri Mansion Apartment (Tower A) Puri Kembangan West Jakarta 900
Madison Park Tanjung Duren West Jakarta 1,200
Gayanti City (2 Towers) Gatot Subroto CBD 318
Verde Two (Tower 1) Rasuna Said CBD 152
Verde Two (Tower 2) Rasuna Said CBD 152
Bellevue Place Tebet South Jakarta 128
Kebayoran Icon Kebayoran Lama South Jakarta 256
Veranda Pesanggrahan West Jakarta 174
2017
Regatta London Tower Pantai Mutiara North Jakarta 276
Central 88 (2 Towers) Kemayoran Central Jakarta 612
Holland Village Cempaka Putih Central Jakarta 400
Domaine Sudirman CBD 186
Rosewood Residences Satrio CBD 160
Skyline Residence (2 Towers) DI Panjaitan East Jakarta 481
Kemang Penthouse Kemang South Jakarta 262
The Foresque Pasar Minggu South Jakarta 600
continued
6 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
Overall, the take-up rate in Jakarta demonstrated an increasing trend with the exception of the CBD area that posted a moderate decrease compared to the previous quarter. With abundant new projects during the quarter but mediocre absorption, the CBD area saw a downswing in the take-up rate trend, by 4% QoQ. South Jakarta and non-prime areas continued to show an upward trend, due to some on-going projects showing progressive construction activities and offering a relatively affordable price compared to the CBD area. Several newly launched projects in middle- to upper-class locations, such as Menteng, Pejaten, Puri Indah, Kemang and Pondok Indah, applied NUP (nomor unit pemesanan or an offer to book a reserved unit) due to high demand within those areas. This way, developers will disseminate NUP to their loyal customers and other potential buyers who can choose good units (usually located on a preferred floor or with the best view, etc.). Interested buyers will then have to deposit a certain amount of money (ranging from IDR20 to 50 million, depending on the class of the apartment) to get the priority to book the desired units.
The Menteng, Pejaten, Puri Indah, Kemang and Pondok Indah areas are popular residential areas (except for Puri Indah) for Jakarta’s expatriate community as they are surrounded by supporting facilities like modern malls, international schools, different chains of supermarkets and other service establishments.
There were several promotional programmes offered during the first quarter benefiting the moments like Chinese New Year and Valentine. Other promotional campaigns to entice buyers are nothing special and continue to copy previous promotions like free holidays to Bali, gold rewards, electronic gadgets or furniture to furnish the apartment units.
apartment name location region no. of Units
continuation
Puri Orchad (3 Tower) Kembangan West Jakarta 3,000
The Langham Residences Senopati South Jakarta 57
Anandamaya Residences (3 towers) Sudirman CBD 500
Maqna Residence Meruya West Jakarta 380
Vittoria Residence (3 tower) Daan Mogot West Jakarta 1,100
One Otium Residence Antasari South Jakarta 160
Wang Residence Kedoya West Jakarta 250
The Batik @ Pejaten Pejaten South Jakarta 200
Source: Colliers International Indonesia - Research
0
5,000
10,000
15,000
20,000
25,000
30,000
2014F 2015F 2016F 2017F
CBD Central Jakarta South Jakarta
North Jakarta East Jakarta West Jakarta
Distribution of Future Annual Apartment Unit Supply by Area
Source: Colliers International Indonesia - Research
DemandUp until March 2014, sales activity in the Jakarta apartment market remain stable. The take-up rate of existing strata-title apartments in Jakarta reached 94.3%, up by 1% while the pre-sales activities from the on-going projects recorded a 72.6% take-up rate, falling by 1.5% from the previous quarter. The substantial newly launched apartment supply in 1Q 2014 has reduced the take-up figure of pre-sales apartments this quarter, however continued absorption of the new units has maintained a relatively healthy take-up rate. In general, the overall take-up rate for both existing apartments and pre-sales apartments was steady at 86.1%.
Source: Colliers International Indonesia - Research
Average Take-Up Rate Performance in Different Location (%)
area 1q 2013 4q 2013 1q 2014 qoq change YoY change
CBD 88.2% 97.1% 93.2% -3.9% 5.0%
South Jakarta 87.8% 88.9% 90.0% 1.1% 2.2%
Non-Prime Area 80.3% 83.1% 83.3% 0.2% 3.0%
7 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
Asking PriceStrata-title apartment prices continue to trend upward along with the escalation of land prices and the construction progress of the projects. As of 1Q 2014, the average price of strata-title apartments in Jakarta was IDR24.4 million per sq m an increase of 2.45% compared to the previous quarter. Overall, the average asking price in the apartment market in Jakarta has increased by 46% in three years. Particularly in the CBD area, in the same period, apartment prices have appreciated by 75%, while in South Jakarta it was 60%.
Average Asking Price (per sq m) of Apartments in Jakarta
Source: Colliers International Indonesia - Research
Preferred Payment Method for Apartment Buyer
Source: Colliers International Indonesia - Research
The combination of a hike in the key interest rate, stricter mortgage regulations and wavering consumer confidence has led to widespread speculation that the property market is headed for a plateau and will affect the slowing demand for apartments. In fact, developers have always found ways to accelerate sales, among them providing flexibility in terms of payment. Various payment schemes were offered by developers to maintain sales activity at a good pace. Such payment schemes enable buyers who have limited access to banking and who are buying a home for the second or third time. Some strategies that are used by developers to lure buyers are:
» Flexible down payment scheme. The amount of down payment of 30 to 50% of the total apartment price can be paid by instalment from 12 to 35 times directly to the developers. The remaining payment is paid upon the construction of the project through mortgage (KPA : Kredit Pemilikan Apartemen);
» Cash instalment. Conventionally, the duration of instalments is the same as the construction progress of the development, i.e. 24 to 36 instalments;
» Long instalment. This payment scheme has a longer duration than cash instalment and can be applied after the construction is done. Similar to cash instalment, buyers have to pay monthly up to 60 times (5 years) directly to the developer. Consequently, the price for this payment method is higher than the normal price, i.e. 15 to 20% more expensive;
» Hard cash scheme. Full payment at one time. Typically the developer will give a special discount of around 10 to 15% off the published rate.
Colliers’ survey of payment methods chosen by apartment buyers was conducted in 40 apartment projects under construction. This revealed that cash instalment payment was opted for by most buyers even in mid-low apartment projects. Only 5 to 20% of buyers of mid-low apartment units use a mortgage facility. Most of the buyers in this segment pay cash instalments. Similarly, in the middle segment, the majority of buyers chose cash instalment payments. However, we still see that in several projects most buyers opted for bank financing instead of cash instalments. In the upper-class segment, again, cash instalments was preferred by most buyers, but interestingly, the portion of those paying hard cash was also quite significant.
Banks are more prudent in financing apartment unit ownership, particularly when the construction progress is slow. In some cases, developers will direct buyers to pay cash instalments, particularly for the off-plan projects. On the other hand, buyers for investment will pay cash instalments during construction, primarily if they are not the first buyer of apartment unit because the new LTV regulations require a higher percentage of down payment for a second purchase. Those with cash capability will find paying by cash instalments less of a hassle.
KPA (mortgage)
16%
Hard Cash21%
Cash Installment
63%
IDR 0
IDR 5,000,000
IDR 10,000,000
IDR 15,000,000
IDR 20,000,000
IDR 25,000,000
IDR 30,000,000
IDR 35,000,000
IDR 40,000,000
IDR 45,000,000
1Q20
11
2Q20
11
3Q20
11
4Q20
11
1Q20
12
2Q20
12
3Q20
12
4Q20
12
1Q20
13
2Q20
13
3Q20
13
4Q20
13
1Q20
14
CBD South Jakarta Non-Prime Area Average
8 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
Apartment for LeaseSupplyThere was eventually one serviced apartment project completed in 1Q 2014 after a dormant situation for the last four consecutive quarters. The only apartment for lease this quarter is Fraser Residence Menteng, featuring 128 serviced apartments comprised of studio to duplex penthouse units. The opening of Fraser Residence Menteng brought the total supply of Jakarta’s apartments for lease to 8,334 units, comprising 57% serviced apartments and 43% non-serviced apartments.
Fraser Residence Menteng is part of Fraser’s global network of serviced residences and is the second development by Fraser after Fraser Residence Sudirman, which opened in June 2011. In the next two years, the group is on course to manage two more developments in Jakarta, including Fraser Place Setiabudi (2015) and Fraser Suites Kuningan (2016).
In fact, Frasers Hospitality and Ascott Limited are two worldwide serviced apartment operators that are very active in Jakarta. Frasers Hospitality will have four properties in operation in the CBD area, while Ascott Limited will have a total of five properties scattered around the CBD and South Jakarta in the next two years. Ascott Limited operates the four-star equivalent Somerset Serviced Residence and five-star equivalent Ascott The Residence brands. Fraser Hospitality operates Fraser Place and Residences in the same categories. All four products are found in city or business locations and have fully equipped kitchens (or kitchenettes), laundry and reception facilities.
Overall, the CBD area fetched the highest average asking price of IDR38 million psm as well as the highest increment of 5.8% QoQ. Land scarcity in the CBD area was the main driving force for apartment prices in this area to accelerate quickly. The newly launched projects in the CBD area, which mostly provide better building quality, use more imported materials, and offer a private residential concept are offered at a minimum of IDR33 million per sq m to a maximum of IDR60 million per sqm. The under-construction projects are quoted from IDR42 to 65 million psm. This high offering price occurred because all new projects located in the CBD area are classified as upper to luxury class apartments. In other areas, like South Jakarta, which still have adequate vacant land to be developed, a moderate growth of 3.2% in prices occurred, which brought the average price for the region to IDR26.7 million per sq m. The key triggers for the price increase were some factors like the commencement of several good projects in well-established locations, such as Kemang, Permata Hijau, and Pondok Indah as well as continuing progress of the under-construction projects. Apart from those premium areas in South Jakarta, there are some new apartment projects in areas like Mampang, Kebayoran Lama, and Pasar Minggu that introduced prices below the average market, ranging from IDR17 to 20 million per sq m and targeting the mid-low to mid-upper segment. In the interim, non-prime areas including West Jakarta, North Jakarta, East Jakarta and Central Jakarta, recorded an increase of 2.8% to IDR18.8 million per sq m. There are some factors that led to the increase in prices, like the good sales performance showed by ongoing projects and the added value that the apartment projects offer like good building materials and more facilities different from other developments.
Source: Colliers International Indonesia - Research
Average Asking Price in Different Sub-Markets (in IDR)
area 1q 2013 4q 2013 1q 2014YoY
change
qoq
change
CBD 32,619,752 36,174,524 38,282,223 17% 5.8%
South Jakarta 22,455,876 25,854,554 26,687,843 19% 3.2%
Non-Prime Area 16,350,089 18,298,766 18,819,110 15% 2.8%
Source: Colliers International Indonesia - Research
List of Apartments Operated by Frasers Hospitality and Ascott Limitedname of development Year of operation operator location tYpe
The Ascott Residence 1995 Ascott Limited Jl. Kebon Kacang Serviced Apartment
Somerset Grand Citra 1996 Ascott Limited Jl. Prof Dr Satrio Serviced Apartment
Countrywoods Residence 1996 Ascott Limited Jl. WR Supratman, Ciputat Serviced Apartment
Somerset Berlian 2006 Ascott Limited Jl. Permata Berlian 3 Serviced Apartment
Fraser Residence Sudirman 2011 Frasers Hospitality Jl. Setiabudi Raya No. 9 Serviced Apartment
Citadines Rasuna Jakarta 2013 Ascott Limited Jl. H.R. Rasuna Said Kav.20 Condotel
Fraser Residence Menteng 2014 Frasers Hospitality Jl. Menteng Raya Serviced Apartment
Ascott Kuningan Jakarta 2014 Ascott Limited Jl. Prof Dr Satrio Serviced Apartment
Fraser Place at Setiabudi Sky Garden 2015 Frasers Hospitality Jl. Karbela Selatan Serviced Apartment
Somerset Kencana Jakarta 2015 Ascott Limited Jl. KHM Syafi'I Hadzami Condotel
Fraser Suites at Ciputra World Jakarta 2 2016 Frasers Hospitality Jl. Prof Dr Satrio Serviced Apartment
9 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
In addition to those international operators, there are some active local serviced apartment operators like Aditya Mansion, Sultan Residence, Pondok Indah Golf, and Kemang Oktroi. There will be one serviced apartment project in Cilandak - South Jakarta, which is expected to open in 4Q 2014.
This project, called TBS Linera Serviced Apartments, has yet to decide the number of units to be released to the market. The owner of this project is a local operator who has experience in developing townhouses as well as housing complexes for expatriates.
Source: Colliers International Indonesia - Research
List of Apartments Developments in the Futurename of development Year of operation location region no. of Units
TBS Linera Apartment Service 2014 Jl. Intan No. 25 Cilandak Barat South Jakarta TBA *
Ascott Kuningan Jakarta 2014 Jl. Prof Dr Satrio CBD 170
Fraser Place at Setiabudi Sky Garden 2015 Jl. Karbela Selatan CBD 150
One Park Avenue 2015 Jl. KHM Syafi'I Hadzami Sout Jakarta 60
La Maison Barito Serviced Apartment 2015 Jl. Barito Sout Jakarta 80
Oakwood at District 8 Senopati 2016 Senopati Sout Jakarta 180
Fraser Suites at Ciputra World Jakarta 2 2016 Jl. Prof. Dr. Satrio CBD 200
Note: *TBA: to be announced
OccupancyIn general, the apartment for lease market in Jakarta saw a minor drop in the occupancy rate from 76.6 to 75.8% this quarter. The occupancy level for non-serviced apartments was steady from the previous quarter at 78.4%, while the serviced apartment projects eased moderately from 72.7% last quarter to 70.5% as some projects reported that a number of their existing expatriate tenants had completed their employment contracts and had to leave the country.
Source: Colliers International Indonesia - Research
Occupancy Level of Non-Serviced Apartments (%)area 4q 2013 1q 2014 qoq change
CBD 82.37% 84.07% 1.70%
South Jakarta 79.02% 78.05% -0.96%
Non-Prime Area 75.99% 75.86% -0.13%
Source: Colliers International Indonesia - Research
Occupancy Level of Serviced Apartments (%)area 4q 2013 1q 2014 qoq change
CBD 79.00% 78.84% -0.16%
South Jakarta 77.01% 76.12% -0.89%
Non-Prime Area 56.44% 51.88% -4.56%
mining) are considering purchasing a certain amount of strata-title apartment units for their expatriate base (generally the engineer level). Instead of renting serviced apartments, owning the strata-title apartment units will be more beneficial for the company as the asset value is expected to grow.
Rental RatesOverall, the asking rental rate of apartments for lease increased during the early part of 1Q 2014 in anticipation of the increase in utility tariffs, especially electricity. The increase in the rental rate was mainly experienced by the preeminent serviced apartments in the CBD, such as Shangri-La, Frasers, Ritz-Carlton, and the Ascott Group’s apartments, with an average increase between US$100 and 300 per unit per month. As mentioned earlier, several apartments for lease, especially serviced apartments, have anticipated adjusting their asking rental rates upward in response to inflation and to the increase in the regional minimum wage.
Source: Ministry of Manpower & Transmigration
Number of Expatriates Working in Indonesia2011 2012 2013
#Expatriates 77,307 72,427 68,957
Overall, there are some factors affecting the softening of demand in the serviced or non-serviced apartment market. One is the decree of the Ministry of Manpower and Transmigration (Number 4, Year 2012) controlling the number of foreign workers in 19 specific job positions. The number of expatriates working in Indonesia has declined in the last three years. Another factor is the amount of new stock at strata-title apartment projects located in premium areas and suitable to expatriates’ requirements. This is expected to exert pressure on the occupancy level of apartments for lease. Based on our survey of the marketing teams of some serviced apartments, quite a few multinational companies (e.g. pharmacies, oil and gas, and
Source: Colliers International Indonesia - Research
Average Asking Rental Rate in Different Areasrental rate
per sq m per month change
area 4q 2013 1q 2014 qoq YoY
CBD including South Jakarta
US$26.56 US$27.58 3.85% 12.99%
Non-Prime Areas US$15.49 US$15.64 0.76% 6.08%
10 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International
Concluding ThoughtThe increase in the interest rates, as well as stricter mortgage regulations, has undoubtedly had an impact on the apartment market that had been benefitting from the cheap credit over the last few years. In fact, in the first quarter of 2014, some developers were confident enough to launch their new projects targeting mostly the middle-upper segment.
The demand for strata-title apartments over the past three years has been quite resilient as Jakartans have taken to inner-city living. Despite the dismal outlook of Jakarta’s apartment market projected early in 2014, developers formulated ways to get around the obstacles, such as providing flexible terms of payment. Such measures effectively maintain the level of apartment absorption because buyers are motivated to buy off-plan projects in anticipation of greater capital gains. Notwithstanding the continued apartment transactions, the market needs more occupancy to stay healthy. The ideal situation is when the units are bought by occupiers or by investors when the leasing market is healthy.
The steep price increases that we have seen over the last three years are likely to soften as the market digests the new economic reality but the long-term trend into high-rise living is very much here to stay, and with the prices still very low by regional standards, there remains plenty of upside in the years ahead.
Meanwhile, the apartment for lease market is expected to maintain a stable occupancy rate. Despite positive inquiries from corporate expansion, tighter competition for upper-class strata-title apartments within premium areas would make the occupancy in apartments for lease market remain steady.
Average Rental Rates of Apartment for Lease
Source: Colliers International Indonesia - Research
The overall increase in the rental rate was mainly underpinned by prominent serviced apartments in the CBD (including South Jakarta) that posted an average rent of USD33.20 per sqm per month. In the same areas, the non-serviced apartments quoted cheaper rates at an average of USD17.70 per sqm per month. Serviced apartments located in the non-prime areas reached USD26.60 per sq m per month, while the non-serviced apartments charged lower at USD12.70 per sq m per month.
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1Q20
11
2Q20
11
3Q20
11
4Q20
11
1Q20
12
2Q20
12
3Q20
12
4Q20
12
1Q20
13
2Q20
13
3Q20
13
4Q20
13
1Q 2
014
CBD Non CBD
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Primary Authors:Ferry SalantoAssociate Director | Jakarta62 21 521 1400 ext 134Ferry.Salanto@colliers.com
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