Stable occupancy rates

seen across office

buildings, malls, and
modern warehouses
Jakarta property market review 3Q 2023

Indonesia / November 2023

Table of Content

01 The Economy 04

02 CBD Office 05

03 Non-CBD Office 08

04 Retail 11

05 Condominiums 14

06 Logistics warehousing 17

07 Hotels 19

Click table of contents to go to preferred topic or navigate

pages by clicking on left and right arrows/page icons.

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Introduction
Indonesia’s economy has recovered, Demand for modern warehouses in Greater
returning to pre-pandemic levels. The Jakarta from the automotive sector and
government has continued to prioritise electric vehicle vendors has increased,
infrastructure development. followed by the manufacturing, FMCG, and
pharmaceutical sectors. Apart from storage,
The office sector's occupancy rate was tenants from the manufacturing sector also
stable in both CBD and non-CBD areas, often use warehouse space as a workshop
driven by demand for newer, higher-quality area.
buildings.
International visitation in the Indonesian
In the retail sector, food and beverage capital city continues to increase on the
retailers remain dominant, while there is back of improved air connectivity within the
also strong demand in the fast fashion, region and globally. More than 190,000
beauty, and entertainment sectors. New international tourists visited Jakarta in the
foreign retailers have opened their first month of September, leading to a total of
outlets in several shopping centres. more than 1.4 million since the beginning of
Condominium sales in Jakarta have 2023. China climbed as top source market
followed previous trends, with developers to Jakarta, and Saudi Arabia climbed to the
focused on selling existing products, fifth spot.
particularly those with more affordable This report provides an update on the
prices. Several projects currently under Jakarta Property Market in the third quarter
construction are progressing, and there is of 2023. We remain committed to our
greater interest from potential buyers in purpose of shaping the future of real estate
projects with certainty of development. for a better world.

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01 The economy
The economy remains resilient, showcasing robust growth with a promising outlook

• The Indonesian economy showed resilience in the second quarter GDP growth Foreign direct investments
of 2023, experiencing a growth rate of 5.17% year-on-year, up from USD 45.6B
the previous quarter's 5.03% growth rate. This indicates a robust
performance in various sectors and a positive economic outlook. USD 28.7B
USD 31.1B
The growth can be attributed to factors like amplified domestic 3.7% 5.3%
USD 24.5B
5.2%
demand and increased government expenditure, which have
contributed significantly to the ongoing expansion in 2Q23.
• At the end of 3Q23, Indonesia maintained its benchmark interest
2020 2021 2022 2Q23 2020 2021 2022 2Q23
rate at 5.75% to effectively manage inflation and ensure stability in
the rupiah exchange rate. The interest rate is anticipated to -2.1%

increase slightly towards the end of the year. However, over this
period, the rupiah exchange rate has weakened continually,
depreciating from IDR 15,034 at the beginning of July to IDR Benchmark interest & inflation rates USD-IDR exchange rate
15,487 at the end of September.
5.5% 5.75% 5.75% 5.75% IDR 15,731
• Despite the ongoing weakening of the exchange rate, Indonesia IDR 15,487
remains committed to closely monitoring the global economy to 5.50% 3.5%
5.0%
ensure the stability of its economy. The Coordinating Minister of 2.3% IDR 15,062 IDR 15,034
Economic Affairs is confident that Indonesia's economy will achieve
a growth rate of approximately 5.1% by the end of the year.

End of 4Q22 End of 1Q23 End of 2Q23 End of 3Q23 End of 4Q22 End of 1Q23 End of 2Q23 End of 3Q23

Interest rate Inflation

Source: Central Statistics Agency, Bank Indonesia

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02 CBD Office
All-grade quarterly net demand rebounded into the positive territory
Demand
• In the third quarter of 2023, the • Technology companies, • While Grade C remained
net demand stood at roughly investment firms, and negative, Grade B experienced
24,000 sqm. This was government-related tenants positive net demand, which
noteworthy, as it marked the primarily fueled the positive lifted up the all-grade net
first time in the last two years demand. demand for 3Q23.
when the net demand for all
grades turned positive for a • Although the technology sector • Demand continues to be
whole quarter. still plays a key role, it was focused on relatively smaller
considered less dominant spaces as occupiers prioritise
compared to the previous finding the right size for their
quarters. offices.
Net demand
150,000
125,000
100,000
75,000
Sqm

50,000
25,000
0
(25,000)
(50,000)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
Grade A Grade B Grade C
Source: JLL Research

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Supply
• There were no new Grade A Demand, supply and occupancy
projects completed in the third
quarter of 2023. Meanwhile, one 600,000 100%
Grade B office building with an
area of about 42,000 sqm was 500,000 90%
completed in the Gatot Subroto
corridor.
400,000 80%
• The trend of relatively low

Occupancy
absorption rates has been Sqm 300,000 70%
observed since the pandemic.
With the new workplace strategy 200,000 60%
and flight-to-quality trends, the
overall occupancy rate remained
100,000 50%
under pressure at around 70%.

- 40%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
-100,000 30%

Net demand New supply Occupancy rate

Source: JLL Research

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Rents
• Rents for office spaces continued to Net est. achievable rent
decline in 3Q23, although slightly
slower than in previous quarters. The 500,000
quarterly decline was approximately

IDR per sqm per month

-1.9%, while the year-on-year
decline was around -7.9%. 400,000

• While several grade A buildings with

300,000
healthy occupancy rates are seen to
maintain their rental levels, it is
essential to note that the overall 200,000
rental market is expected to remain
competitive in 2024, mainly due to 100,000
relatively high vacancy rates.

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Premium Grade A

Source: JLL Research

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03 Non-CBD Office
Flight-to-quality remained; one new project in TB Simatupang is expected in 2026
Demand
• In contrast with offices in the CBD area, Non-CBD offices continued to experience negative net demand in
3Q23. With the downsizing trend remaining the main priority for several occupiers, both new and existing
tenants tend to occupy newer and higher-quality office buildings.
• Despite inquiries starting to pick up, the Non-CBD area demand is still relatively limited in some areas,
especially compared to the CBD area. The cost-saving strategy will continue to be encountered by most
office buildings in the area.

Net absorption
200,000

150,000

100,000
Sqm

50,000

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023-ytd
-50,000

Source: JLL Research

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Supply
• No new completions in 3Q23 for all Demand, supply and occupancy
sub-districts of the Non-CBD area.
Lippo Tower @ Holland Village in 400,000 100%
Central Jakarta remained the only 350,000 95%
new supply with a total area of
300,000
around 27,200 sqm. 90%
250,000
• The Non-CBD area’s occupancy rate 85%

Sqm
200,000
remained at 71% in the third quarter 80%
of 2023. Considering the upcoming 150,000
new supply and limited demand, the 75%
100,000
occupancy rate is expected to 70%
50,000
remain under pressure in the last
0 65%
quarter of 2023.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023-ytd
-50,000 60%

Net demand New supply Occupancy rate

Source: JLL Research

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Rents
• Rents continued to decline in all Net est. achievable rent
areas of the Non-CBD area. For the
TB Simatupang corridor, at around 200,000
0.57% q-o-q, a decline was recorded 180,000
in 3Q23.

IDR per sqm per month

160,000
• For the remaining quarter of 2023, 140,000
we still expect new real estate 120,000
strategies to influence the market.
100,000
The trend in the Non-CBD area is
relatively similar to the CBD area. 80,000
60,000
40,000
20,000
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
Central Jakarta South Jakarta North Jakarta
East Jakarta West Jakarta TB Simatupang
Source: JLL Research

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04 Retail
The highest demand in nine months, largely driven by the F&B sectors
Demand
• In the third quarter of 2023, anecdotally, foot traffic in • The F&B sector thrives, with many tenants opening • Several foreign brands made their debut. Primarily
several malls located in the CBD area was relatively new stores in multiple malls. Fashion, beauty, and focusing on the beauty industry, Gucci Beauty and
strong. Many citizens and some tourists are flocking entertainment tenants also contribute to the demand. various niche perfume beauty brands, such as
to malls in Senayan, Thamrin and SCBD for Entertainment tenants, in particular, are in high Montale, Nishane, Ex Nihilo and Initio, entered the
entertainment and shopping purposes, especially demand in Jakarta as the city lacks outdoor market. Another notable international brand that
with international events held in August and entertainment options. Playtopia and Super Park are opened its first store in Indonesia is Fruition, a
September. notable entertainment tenants in the market. boutique street-fashion store from the United States.

Retail net absorption

100,000
80,000
60,000
40,000
Sqm

20,000
0
-20,000
2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17
4Q17

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23
-40,000

Source: JLL Research

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Supply
• No new prime shopping malls Supply, demand and occupancy
were completed in Jakarta during
250,000 100%
the third quarter of 2023. As a
result, tenants looking to expand
in Jakarta are being cautious and 95%
200,000
waiting due to high occupancy
rates in Prime malls.
90%
• However, it is anticipated that 150,000
three non-prime malls in West,

Occupancy
85%
Central, and North Jakarta will be
Sqm

100,000
finished in the upcoming year,
adding a combined supply of 80%
around 100 thousand square
50,000
meters. 75%
• While the development of new
malls within Jakarta is scarce, 0
70%
developers are now shifting their 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
focus to the city’s outskirts,
-50,000 65%
particularly in the Greater Jakarta
townships. Net demand New supply Occupancy
Source: JLL Research

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Rents
• The positive economic recovery Rental rates
experienced in 2023, coupled with
rising domestic demand, has 800,000

IDR per sqm per month

resulted in a significant increase in 700,000
foot traffic within Jakarta's shopping
600,000
malls. Currently, many shopping
malls are experiencing low vacancy 500,000
rates, making unoccupied spaces 400,000
scarce and in high demand.
300,000
• Prime Malls in Jakarta experienced
200,000
a slight rent increase, with growth
of 1.45% on a q-o-q basis. This 100,000
upward trend is expected to 0
continue as there is a shortage of

End-2023

End-2024

End-2025

End-2026

End-2027
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
retail space available in Jakarta.

Upper Middle Middle Low

Source: JLL Research

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05 Condominiums
Condominium sales remained subdued, while new launches were observed
Demand
• Recent project launches in the current quarter played a role in the overall sentiment
of condominium sales, which, although remaining soft, exhibited a slight
improvement compared to the previous quarter.
• Mirroring the trend observed in previous quarters, there was a consistent preference
for smaller residential units that were more affordable, especially for end-user
buyers. These units were particularly sought-after due to their greater affordability.
• Projects prepared for immediate occupancy or in the final stages of completion were
favoured by end-users, given the minimal risk of construction delays associated with
these developments.

Condominium sales
7,000
6,000
5,000
Units

4,000
3,000
2,000
1,000
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
Source: JLL Research

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Supply
• Two condominium projects were Supply, demand and occupancy
launched this quarter. One is a high-end
development in South Jakarta by the 14,000 100%
Asiana Group, namely Two Senopati.
The other project is by ADR Group; it is 12,000
an upper-tier project named Adriya 80%
Residences, featuring two towers. This 10,000
project is located in Pantai Indah Kapuk,
60%
North Jakarta. 8,000

Units
• Limited new supply is still anticipated 6,000
40%
leading up to the 2024 presidential
election, prompting a cautious "wait-and- 4,000
see" approach from developers and 20%
2,000
buyers.
• Most buyers, often investors, seek 0 0%
Upper Grade Middle Grade Lower Grade
favourable deals for capital gains or
recurring income, further contributing to
Uncompleted launched units Unit sold Sales rate
the cautious market sentiment.
Source: JLL Research

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 Prices
• There was a slight uptick in condominium prices, mainly driven by new launches. Developers directed their efforts towards enhancing sales for their ongoing developments.
While it was unlikely for developers to reduce primary market prices, some may have been open to providing additional incenti ves, such as flexible payment terms,
particularly with instalment options that did not require monthly payments but had to be settled within the agreed-upon timeframe.

Sales prices
70,000,000
IDR per sqm in millions

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
Lower middle Middle Upper High-end Luxury
Source: JLL Research

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06 Logistics warehousing
Total net demand matched last year’s roar, signaling the market remained resilient

Demand and Supply

• Apart from the increasing demand from third-party logistics players,
sectors such as automotive and electric vehicles have also witnessed
an upswing in demand for modern logistics warehouses, closely
followed by manufacturing, Fast-Moving Consumer Goods (FMCG),
and pharmaceuticals.
• Inquiries have been received from companies in the automotive, electric
vehicle, and energy-saving sectors seeking storage spaces that can be
converted into workshops. In addition to accessibility and affordability,
tenants are also placing importance on the flexibility provided by
developers when selecting modern logistics warehouse spaces.
• With recent completions in Jakarta and Bekasi, the total stock of
modern logistics warehouses in Greater Jakarta is approaching 2.6
million sqm. Most of the new demand continues to be concentrated in
the eastern part of Jakarta.

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 Rents
• Despite the introduction of new supply, Occupancy rates in Greater Jakarta
the occupancy rate has consistently
remained stable, driven by positive and
3,000,000 100%
consistent demand. However, the
overall growth in rents has remained
2,500,000
relatively modest. 80%

• In certain locations, particularly in 2,000,000

Cikarang, a surplus of available 60%
properties has resulted in heightened 1,500,000
competitive dynamics, which fueled
Sqm
40%
intense competition in rental prices, 1,000,000
ultimately resulting in modest rent
growth. 20%
500,000

• Occupiers are adopting a cautious

0 0%
strategy as they evaluate modern 2019 2020 2021 2022 3Q23
warehouses that offer reasonable rental
prices and convenient access to toll
roads, placing a premium on Total stock Occupied stock Occupancy rate
accessibility and proximity to end-users. Source: JLL Research

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07 Hotels
International visitation in Jakarta represented 76% of pre-pandemic level; continued recovery in luxury
trading performance as of YTD September 2023

Demand
• Similar to other gateway cities upon border reopening, the number of international visitors in Jakarta has been rapidly picking up. At the end of Q3 2023, visitation to
Jakarta continued its upward trend, with international visitation exceeding 1.4 million since January 2023, a year-on-year increase of more than 142%; albeit still below pre-
pandemic levels by 24%.
• China continues to represent the top source market to Jakarta, with a total of 213,573 tourists in the first nine months of the year and representing 71% of 2019 levels.
Strong tourism demand remains driven by Asian markets such as China (15% of total international), followed by Malaysia (11%), Singapore (7%), and Japan (5%). Saudi
Arabia climbed to the top 5 source market as of YTD September 2023.

International Visitor Arrivals to Jakarta

3,000,000 40%

2,500,000 20%

Annual Growth (%)

0%
2,000,000
Visitor Arrivals

Y-O-Y Growth -20%

1,500,000 Y-O-Y Growth
683.5% 142.7% -40%
1,000,000
-60%
500,000 -80%
0 -100%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD Sep YTD Sep
International Visitor Arrivals Annual Growth 2022 2023
Source: BPS-Statistics Indonesia, JLL

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Supply Existing and future hotel supply in Jakarta

• No new hotels completed in

70,000
Jakarta in the third quarter 2023,
maintaining the existing hotel
supply to 58,105 rooms in the 60,000
Indonesian capital city.
50,000
• No new hotels are expected to

No. of rooms
open by the end of the year. The
40,000
initially planned Swiss-Belhotel
Kelapa Gading and Movenpick
Jakarta Pecenongan have further 30,000
delayed to next year.
20,000
• Around 1,350 hotel rooms are
expected to complete by 2025,
10,000
including major upscale and luxury
developments such as Pan Pacific
Jakarta, Hotel Okura Jakarta and 0
ParkRoyal Jakarta. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023F 2024F 2025F

Existing supply New supply Future supply

Note: supply in Serviced Apartments not included in the chart

Source: JLL Research

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Trading performance Trading performance of luxury hotels in Jakarta

• In the first nine months of 2023, all

hotel segments recorded a significant
increase in RevPAR when compared
to YTD Q3 2022, driven by a rise in
180 100%
both occupancy and ADR.
160 90%
• As of YTD September 2023, luxury
140 80%
RevPAR continued to exceed pre-
ADR / RevPAR (USD)
pandemic levels by 9.9%, driven by 70%

Occupancy (%)
120
elevated ADR which remains at 60%
record-highs since January 2023. 100
50%
80
• However, in the near term, overall 40%
reduced spending on business 60
30%
travels will encourage corporate 40 20%
tourists in Jakarta to look for
accommodations that fit their budget. 20 10%
This trend is expected to ultimately 0 0%
benefit the recovery of upper upscale 2019 2020 2021 2022 YTD Sep 2022 YTD Sep 2023
to upscale hotels given that their
rates have remained similar Source: STR ADR (USD) RevPAR (USD) Occupancy (%)
Note: Rates inclusive of Service Charge
compared to pre-pandemic levels to
maintain price competitiveness.

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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.
jll.co.id

Yunus Karim JLL Indonesia

Head of Research Indonesia Stock Exchange Building Tower 2, 22nd Floor.
[email protected] Jl. Jend. Sudirman Kav. 52-53. Jakarta 12190
+62 (21) 2922-3888

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