J AK A R TA P R O P E R T Y

JAKARTA
M AR K EPROPERTY
T OUTLOO MARKET
K 2021

OUTLOOK 2021:
"IS RECOVERY STILL A MIRAGE?”

P R E PA R E D B Y :
PT LEADS PROPERTY SERVICES INDONESIA
V I E W P O I N TVIEWPOINT
REPOR REPORT.
T - DECEMBER
DECEMBER 2020
2020.
Preface

After nine months undergoing limitation of activities in order to reduce the pandemic spread,
Indonesia shows surging case of Covid19 impact as the number increases to around 618,000 as of
Mid December 2020. Additional case has been up to 8,000 per day during December alone, while
the normal figure was only below 1,000 additional cases before June 2020. It is obvious that the lock
down, despite partial, has not been effective to reduce the pandemic spread.

In parallel, Indonesia government is putting tremendous effort that will be implemented in 2021. They
expect that around 170 million people in Indonesia would get the vaccine*. The ultimate result is that
after undergoing economic recession, the pandemic case is expected to be significantly decreased
to enable the government reinstate the country’s activities to 100% in order to regain full economic
recovery.

Despite that the vaccine is publicly declared available in our country early December 2020, however,
having the whole citizens injected is another thing, which would require long time interval. Pandemic
case might reduce ultimately. However, would the recovery of property market be as easy as “turning
the palm of the hand?”

*Liputan6.com, October 3rd, 2020. Leads Property Research, December 2020. 2

 2021 Market Outlook Summary

Office Retail Condominium

Cumulative Cumulative Cumulative

Supply Supply Supply

Occupancy Occupancy Sales

Rate Rate Rate
Average Average Average
Asking Asking Asking
Base Rent Rental Rate Price

“ Remain soft and declining. “ Takes time to recover. “ Due to limited new supply, the
market remain stable.
” ” ”
Leads Property Research, December 2020. 3
 2021 Market Outlook Summary

Rental Hotel Industrial

Apa rtme nt
Cumulative Cumulative Cumulative
Supply Supply Supply

Occupancy Occupancy Sales

Rate Rate Rate
Average Average Average
Asking Daily Rate Asking
Rental Rate Price

“ Tend to be stable due to

competitive rental rate.
“
Will show an improvement in 2021
and expected to be stable in 2022.
“
The only sector that resilience and
positive - will continue to be active.
” ” ”
Leads Property Research, December 2020. 4
 Ta b l e o f C o n t e n t s

Indonesia’s Economy Outlook f or 2021 06

Jakarta Office Market 09
Jakarta Retail Market 13
Jakarta Condominium Market 17
Jakarta Rental Apartment Market 20
Jakarta Hotel Market 24
Greater Jakarta Industrial Market 27
Leads Property Research, December 2020. 5
01
Indonesia’s Economy
Outlook for 2021
After The Recession, How Would
The Macro Economic Indicators Perform?
“Some indicators INCLUDING inflation rate, lending rate and deposit rate are predicted to be corrected,
in order to gain positive economic growth”

Economic Growth Inflation Rate Lending Rate Deposit Rate (BI Repo Rate)
12.0%

10.0%
Lending rate is predicted to be corrected to boost project funding. Hence,
deposit rate would be lowered down as well to maintain the margin spread.
9.3%
9.0% *
This condition would be in line with the movement of inflation rate.

8.0%

6.0%

4.5%**
4.0%
4.0%
3.5%
3.6%

2.0%
3.0%
Economic growth is expected to gain its positive growth to 4.5%, following the positive signal
regarding Covid19 vaccine distribution. Economic activities would rebound.
0.2%
0.0%
2013 2014 2015 2016 2017 2018 2019 2020P 2021P

Leads Property Research, December 2020.

BPS, Bank Indonesia, Ministry of Finance, Economic Intelligence Unit. *Jakarta Globe. 3 Dec 2020. **Kontan. 23 Nov 2020.
7
After The Recession, How Would
The Macro Economic Indicators Perform?
Gross Domestic Product Per Capita (Per Annum)
IDR per Annum
50,000,000 Relatively Stagnant In
45,000,000 2019 - 2020 Due To Economic Recession
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000

43,214,639
15,000,000
34,127,720

35,161,890
32,874,760

36,468,620

37,850,510

39,338,590

41,271,179

41,353,721
10,000,000
5,000,000
0
2013 2014 2015 2016 2017 2018 2019 2020P 2021P

Unemployment
Rate
9.0%- Year 2021 should see increasing
9.7% unemployment rate post-pandemic, despite the
vaccine’s rollout program. However, this could
7.1%
imply workers’ shift to the informal sector,
* offsetting the job loss in the formal sector.
2020 2021P
Leads Property Research, December 2020.
BPS. * Detik.Finance. 15 Aug 2020.
8
 02
Jakarta Office Market
Jakarta Office Market: Outlook in 2021

Supply
Annual Supply Distribution Supply Distribution
2020P 2021P
Based on Location Based on Location
10.98 11.40
Million sqm Million sqm 450,000 CBD OCBD

400,000
101,400
350,000
Absorption
300,000 OCBD,

Sqm
2020P 2021P 36%
250,000
80-85 100-105 200,000 2021P
Thousand sqm Thousand sqm
107,400 316,800 CBD,
150,000
64%
100,000
Occupancy 50,000 115,050

2020P 2021P 0
±76.4 ± 74.5 2020P 2021P

Percent (%) Percent (%)

During this uncertainty period brought by the COVID-19 pandemic, Jakarta office
market activities throughout 2020 have experienced an unprecedented halt and
the fundamentals of the Jakarta office market are undergoing turbulence. The
Avg. Base Rent office market has remained under softer market conditions in the pre-pandemic
2020P 2021P period already, whilst this year is deemed as the “bottom point” of the office
± 243K ± 240K market. A decline in the performance of office sector is still
IDR psm pm IDR psm pm anticipated to take place further in 2021.

Leads Property Research, December 2020. 10

Jakarta Office Market: Active Industries

FINANCIAL IT AND FAST-MOVING

SERVICES E-COMMERCE CONSUMER GOODS
(FMCG)

INSURANCE PHARMACEUTICAL A G R I C U LT U R E

Despite the poor prospects, it is worth noting that throughout 2020, landlords have been receiving more
and more leasing inquiries in the areas of IT and e-commerce - which are considered emerging sectors.

Leads Property Research, December 2020. 11

Jakarta Office Market: Trends of 2021

Flexibility Of Lease Consolidation Vs Segregation

As the pandemic has shown any shifting Occupiers might explore the assessment
on the occupiers’ working policy and of consolidate their offices into 1 location
behavior, it might also push all landlords to (or stick with a single office location) and
comfort occupiers in the form of flexibility will be compared against splitting the office
terms & conditions of the lease. into multiple locations.

Reduction Of The Physical Increase Demand On High-

Office Requirement tech Office Building
Since some companies have decided to With more businesses relying on the high-
implement remote working fully or partially, speed IT network for its internal and
the physical office requirement might be external communication, the demand on
reduced, as it is expected that the office high-tech office buildings might be
will not be 100% occupied by the total increasing in the near future.
number of employees.

Increasing Demand Of Office

No Designated Desk Located Nearby Residential
Since many occupiers have applied Given more flexibility in terms of remote
remote working, flexible working hours, working and working hours, it is expected
and limited the density within office area, it that demand on office buildings located
is projected that the future trends of office nearby residential area will be increasing
design will not have as many as as it could be utilized as “satellite office”
designated desk as occupiers have now for employees.

Leads Property Research, December 2020. 12

03
Jakarta Retail Market
Jakarta Retail Market Outlook in 2021
Supply Distribution
Based on Location

West
19% CBD
25% Cumulative Cumulative
Supply Demand
South 2021P Central 2020P 3.37 2020P 3.01
19% Million sqm Million sqm
10%
East
2021P
3.49 2021P
3.05
North 7% Million sqm Million sqm
20%

140,000 Annual Supply

119,000
120,000

100,000
Occupancy Average Asking
85,800
80,000
Rate Rental
Sqm

60,000 2020P 89.2 2020P 863K

Percent (%) IDR psm pm
40,000

20,000
2021P
87.3 2021P
850K
Percent (%) IDR psm pm
0
2020P 2021P

Retail sector is one of most affected sector due to social restrictions imposed as a result of pandemic. The pandemic has
changed the landscape of the retail occupiers as well as influenced spending behavior. Hence, it is likely that this
sector will recover in the long term only, slowly and gradually returns to its pre-pandemic position.

Leads Property Research, December 2020. 14

Jakarta Retail Market Outlook in 2021

Attractive Rental Market Still Under

New Scheme Market Shifts
Package Pressure
Landlords would continue to Revenue sharing scheme Due to the additional Omni Channel Selling
give incentives to tenants might be considerable in supply, Jakarta’s occupancy (Online and At-Store) would
such as rental discount, retail sector. rate will continue to drop. be more adopted to survive
deferred payment or even Moreover, some tenants of the pandemic.
rent free, depending on the retail space in shopping
financial performance of centers are expected to
retailers. close their outlets due to
reduced turnover as well as
they tend to hold their
expansion plans as a result
of the pandemic.

Leads Property Research, December 2020. 15

Jakarta Retail Market: Trends of 2021

Active tenants:

Some tenants such as pharmacy, groceries, gym, cinema, fashion are still expected to survive in malls.

New trend:

Stand-alone Food-and-Beverages would be more attractive to customers, supported with drive thru and less
relying on malls.

Leads Property Research, December 2020. 16

 04
Jakarta Condominium
Market
Jakarta Condominium Market Outlook in 2021
Supply Distribution
Based on Location

East CBD
Cumulative Cumulative 12% 12%

Supply Demand North

17% South
2020P 256,400 2020P 212,600 2021P 21%
Units Units

Central
2021P
257,200 2021P
213,700 18% West
Units Units 20%

Annual Supply
3,000
2,623
2,500
Sales Average Asking
2,000
Rate Price

Untis
1,500
2020P 82.9 2020P 24.98 800
Percent (%) Million (IDR psm) 1,000

2021P
83.1 2021P
25.03 500

Percent (%) Million (IDR psm) 0

2020P 2021P

Albeit positive Condominium market in Jakarta is foreseen to remain soft, however, middle low to middle
up segment remains active and opportunities in upper to luxury segment remains limited.
outlook, the Newly launch supply is expected to be limited as developers will focus on selling their
market still ongoing projects, which still have unsold inventories across all segments or either
remain cautious postpone the launch of their upcoming project or withdraw their newly launched from the
market.
Leads Property Research, December 2020. 18
Jakarta Condominium Market: Trends of 2021

5. Down Payment Covered by

Developer or flexible down
payment.

6. Low mortgage rate at 6-9%

per annum.
2

1
7. Real demand comes from
end-user rather than
3
investor.

4
1. Flexible Payment Terms

7
2. Longer Installment of Bank Loan
(Up to 30 years)
6
5
3. Free Fully-Furnished Package

4. More active online marketing

approach (e.g. Virtual tour,
webinar, online booking)

Leads Property Research, December 2020. 19

05
Jakarta Rental Apartment
Market
Jakarta Rental Apartment Market Outlook in 2021
Supply (Units)
2020P 2021P Annual Supply Supply Distribution
Based on Location
9,118 10,051 1,000 933

Demand (Units) 900 North

2020P 2021P 800 Central 7%
10%
700
5,183 5,403 West
600 5%
CBD

Units
Occupancy Rate (%)
2020P 2021P
500 2021P 48%
400

56.8% 53.8% 300 South

176 30%
Rental Rate (USD psm pm) 200
100
2020P 2021P
0
20.20 20.81 2020P 2021P

Minimizing health risks stemming from pandemic, rental apartments (serviced) have also become an option
Into 2021, for corporations to host their senior level employees in close proximity to their offices, and returning
employees from overseas trips needing quarantine conditions.
applying a
conservative However, impending economic recession in Q4 2020 may disrupt this trend significantly, as corporations
attempt to cut costs well into 2021, and scheduled added supply could also struggle to fill up their newly
approach to opened rooms. Into 2021, applying a conservative approach to pricing will be important; rental prices should
remain in line with current strategies.
pricing will
Although occupancy numbers may point to a slump in 2021, back-log from delayed projects, which could
be important reach 933 units of new supply in 2021, can be attributed as the main cause. However, rebound is expected to
take place in 2022 as expatriates expectedly return.

Leads Property Research, December 2020. 21

Jakarta Rental Apartment Market Outlook in 2021
24.00 Rental Rates (USD) Occupancy Rate 70.00%

23.00 56.85% 60.00%

22.00
53.76% 50.00%

21.00
USD psm pm

+933 Units 40.00%

20.00
30.00%
19.00

20.81
20.20
20.00%
18.00

17.00 10.00%

16.00 0.00%
Q1 2020 Q2 2020 Q3 2020 2020P 2021P

In the last few months subsequent to pandemic restrictions, in order to maintain guests, rental rates have fallen by 8.9% since
the start of the year. Existing operators should maintain prices fairly consistent from this point, for the remainder of the year.

Leads Property Research, December 2020. 22

Jakarta Rental Apartment Market: Trends of 2021

As serviced apartments As health protocols are

adapt to changing enforced on staff, serviced
conditions post-pandemic, apartment demand should
greater emphasis will be continue to benefit from
placed on having post-pandemic conditions;
medical assistance most enticing option for
readily available. companies hosting high-rank
professionals in CBD.

In 2020, post-pandemic
Capacity limits in office uncertainty effectively
buildings have resulted in a delayed planned new
decline of 6-month stay non- openings. This trend may
serviced apartment demand continue in the next year as
and this trend is likely to big operators continue to
continue into 2021. apply caution to market
expectations.

Leads Property Research, December 2020. 23

 06
Jakarta Hotel Market
Jakarta Hotel Market Outlook in 2021

Total Number of Hotels in Jakarta Distribution of Room Keys

Based on Location
2020P 2021P GROWTH
309 329 6.47% CBD
North
11%
East
20%
4%

Total Number of Hotel Room Keys in Jakarta

South 2021P
16%
2020P 2021P GROWTH Central
37%
54,195 58,635 8.19% West
12%

After experiencing unprecedented lows in 2020 as occupancy rates and ADR plummeted
Pent Up amid travel restrictions, the hotel market is due to gradually recover by 2021, with pent-up
Demand demand hoping to lead a turnaround in the industry. The following year is forecast to bring a
significant level of supply, of which many were from this year’s delayed openings, including
To Lead Park Hyatt Jakarta and Sutasoma Hotel. While competition tightens in the market, the worst
A is believed to have passed, with hotels readapting and business trips returning,
bringing the market into a positive trajectory in track for pre-pandemic levels
Turnaround hopefully by 2022.

Leads Property Research, December 2020. 25

Jakarta Hotel Market Outlook in 2021
Occupancy Rate Trends Of 2021
60%
50%
50% Safety is the new luxury
40%
38% Safety and health protocols are here to stay, as
hotels seek to increase sentiment amongst
(%)

30% 25% potential guests.

20%

10%

0%
Q3 2020 2020P 2021P
Less contact, more automation
Significance of technology will continue to
Average ADR increase, some accelerated due to a shift of
consumer behavior post-pandemic.
1,200,000 Implementations include contactless check-in
1,014,792
and payments, smart rooms and robot
1,000,000
882,428 concierges.
802,207
800,000
(IDR)

600,000
In-depth personalization &
400,000
experience
200,000 As competition tightens, personal touches to
guests’ preferences and requests as well as
0 unique experiences offered to guests could go a
Q3 2020 2020P 2021P
long way.

Leads Property Research, December 2020. 26

07
Greater Jakarta Industrial
Market
Greater Jakarta Industrial Market Outlook in 2021
Land Supply (Ha)
Supply Distribution
Q3 2020 2020P 2021P Based on Location
12,658 12,842 Tangerang, 6%

Land Absorption (Ha) Bekasi,

45%
Serang,
2020P 2021P 8%
11,650 11,824
Sales Rate (%) 2021P
2020P 2021P Karawang &
Purwakarta,
92.0% 92.1% 29%
Bogor,
1%
Average Price (IDR psm) Jakarta, Cilegon,
5% 6%
2020P 2021P
2.77 Million 2.78 Million

The impact of the

Industrial land transaction will continue to grow-slowly but sure. The
Covid-19 pandemic
government has received confirmation that several foreign companies will relocate
on the industrial their factories and/or expand their business to Indonesia. Therefore, landlords would
sector is not as convert more of their land-bank to land supply to accommodate more upcoming
inquiries. Average industrial land price tends to be stabilized and/or stagnated due the
hard as other price had been deemed relatively high as compared to some Southeast Asia’s
sectors countries.

Leads Property Research, December 2020. 28

Market Opportunities in 2021

INDUSTRIAL

INFRASTRUCTURES INDUSTRY 4.0

Completion and on-going infrastructures

development (e.g.: JORR 2 Toll Road, Jakarta-
With the beginning of the era of industry 4.0,
Cikampek Selatan Toll Road, Patimban Port, etc.)
all industrial estates are expected to move
will escalate industrial flow and logistic
into this enhanced stage, which would boost
distribution.
more efficient, more production, and clean
industry as well.
Many areas along infrastructures development will
have potential for future industrial expansion
development (e.g Central Java).

Leads Property Research, December 2020. 29

Greater Jakarta Industrial Market: Trends of 2021
TRENDING SECTOR 2021

ELECTRIC AUTOMOTIVE DATA CENTER

Supporting Parts
With the beginning of the era of industry
Due to the rising of electric vehicle 4.0, the utilization of internet and cloud
trend, it would also boost the storage is increasing, triggering more
production of supporting spare parts of demand for data centers. Therefore,
electric vehicle such as batteries, data center development trends will
engines, and others. increase to accommodate future
demand.
As a result, such enhanced automotive
sector and its related spare parts are Large-scale data center development
predicted to drive industrial market will be in availability of large land size
demand. with affordable price.

FAST-MOVING CONSUMER
GOODS (FMCG) WAREHOUSE/ STORAGE
FMCG sector might diversify their The warehouse/ storage market will be
product line to hygiene product in order still growing. Warehouse/ storage would
to support government’s program in still support the country’s economic
combating the pandemic effect. activity as this sector stores material,
goods, products before delivered to their
manufacturers or users or customers.
Cold-storage warehouse would also
drive the market as many products
require low-temperature condition while
stored.

Leads Property Research, December 2020. 30

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