jakarta rental apartment report 3q11
JAKARTA RENTAL APARTMENT REPORT 3Q11 Economy As of today, the Indonesia’s economy remained strong with the current GDP figure of 6.6%, surpassing the target of 6.5% by the government. This strong figure is well supported by the strong domestic consumption, investment as well as healthy export. In the last month of the third quarter, Rupiah experienced significant depreciation against the USD at the rate of Rp8,940/USD by the end of Q3, reflecting a QoQ change of -3.8%. During the 3rd quarter, prices have increased by 0.93%, making the YoY inflation figure to 4.79%. Year-to-date FDI realization totaled USD 9,180 million, while the 9 month’s SBI rate during the quarter averaged at 6.28%.
ECONOMIC INDICATORS GDP Growth
2010 6.0%
2011 6.6%
2012F 6.5%
CPI Growth Central Bank-Rate
6.0%
7.0%
7.0%
6.5%
6.75%
7.0%
Source: Government data (BPS, BI, Ministry of Finance) and CEIC
Ove rview
Leasing Activities The market condition of the Jakarta rental apartment sector has been quite stable despite the anticipated slowing down during the fasting month in August. Surprisingly, by the end of 3rd quarter 2011 the rental apartment market has rebounded from a dip in occupancy during the month in August. Also, with the current economic growth rate of 6.6%, demand and rental rates remained intact with the previous quarter robustness. In this quarter, we continue to see demand being driven by foreigners mainly from the Asia region such as Japan, Korea, China, and India. Others came from the Western counterparts such as USA, Australia and Europe. With 57% of the demand coming in from foreigners and only 43% from the locals, we can see that foreigners still drive the rental apartment market.
NEW PROPOSED Project
Sub-sector
Approx units*
Schedule completion
Area
Ascott Kuningan
Serviced Apt
170
2013
Kuningan
Somerset Kencana
Serviced Apt
187
2014
Pondok Indah
RENT & VACANCY
Leasing Demand
Demand activities in the month of September has picked up since last month with purposely build rental apartment and service apartment maintained their strong occupancy rate at 79.6% for purposely build rental apartment and 75.2% for service apartment. Compared to 2nd quarter figure, the occupancy rate has only declined by about 0.1% for both of these sub-sectors though in August, occupancy rate of the service apartment sub-sector had hit in the range of 50%-60% for most developments. By successfully locking a long-term lease (ranging between 3-12 months), most purposely build rental apartment enjoys a smooth ride during the quiet period of Ramadan. In fact, some renowned area amongst expatriates including Senayan and Pondok Indah sustained a higher occupancy rate compared to last quarter’s figure. For the service apartment sub-sector, the demand dipped during the August period but has since recovered by the end of this 3rd quarter. Foreigners continue to dictate this market with 72% share of the total demand. Again majority of foreigner’s demand comes from Japan, Korea, China and United States. Occupancy rate in the condominium for lease sub-sector has experienced a decrease by 1.6% QoQ. This drop of occupancy is mainly cause by a substantial number of supplies of condominiums entering the market in this 3rd quarter. On top of that, the earlier completed condominiums developments started to enter the leasing market as condominium’s owners have completed their fitting out and are ready to lease their unit back to the market. Among the three sub-sectors, the condominium for lease sub-sector has the least number of expatriates of about 52% from the total demand in this market. JAKARTA RENTAL APARTMENT REPORT 3Q11
1
JAKARTA RENTAL APARTMENT REPORT 3Q 2011 Supply
There is no new supply coming in for both the purposely build rental apartment and service apartment for the 3 rd quarter of 2011. In fact there is a decrease in supply in both sub-sectors. In the purposely build rental apartment sub-sector, Taman Pasadenia in Polumas had sold most of its units while The Kebayoran Baru Mansion in the Kebayoran area is planning to renovate their entire building and reduce the total supply in this sub-sector. Recapping this 3rd quarter, the supply of the purposely build rental apartment has decreased by 1.9% QoQ with 2,318 total units.
RENTAL APARTMENT PRICE
In the service apartment sub-sector, the same trend occurs. Older type development such as Park Avenue Suites sold off some of their units to their tenants, making a total supply of 3,877 units for this sub-sector (a decrease of 0.3% QoQ).
Condo-for-
LOCAL CURRENCY (RP/SQ.M/MONTH) LOCATION
PB Rental Apt Serviced Apt
lease
12-
Q111
Q211
Q311
EUR O/ SQ.M /YR
US$ / SQ. FT./ YR
147,451
146,716
150,369
148.9
18.8
Stable
191,721
194,001
200,331
198.4
25.0
Stable
121,317
125,185
127,784
126.6
15.9
Stable
MONTH
OUT LOOK
Note: 1USD: Rp 8,940; 1EURO: Rp 12,114.49
SUPPLY BY DISTRICT (SA&PB)
The condominium for lease market recorded additional 1,128 new units in this 3rd quarter, bringing the total supply to 34,763 units. These new units come from the newly completed development such as Kebagusan City tower C in Kebagusan, Urbana Karawaci (Berkeley, Oxford, and Yale tower) in Karawaci, Green Central (Adenium tower) in Gajah Mada, Central Park (Amandine tower) in Podomoro City Tanjung Duren, Centro City (tower B) in Daan Mogot, and Cosmo Terrace in Thamrin.
Rental Grow th
By the end of 3rd quarter, market has shown an increase in rental rates for the three sub-sectors of rental apartment. The overall increase in rental rates is approximately 2.7% QoQ bringing the per sm rate to Rp 159,495. It is important to note that most of the rental rates are quoted in USD especially in the service apartment and purposely build rental apartment market. The weakening of Rupiah against the USD creates the illusion of a higher rental rate, while in dollar term it stayed the same.
RENTAL RATE IN JAKARTA
Looking from the micro level of each individual sub-sector, there is an overall increase in rental rates for the condominium for lease sub-sector. The depreciation of Rupiah against the USD induced many private condominium owners to increase their rental price to keep up with the true value of USD as most rates are quoted in Rupiah. Comparing with the 2nd quarter figure, the increase in rental rates was approximately 2.1%, which brought the per sm rate to Rp 127,784. In the service apartment and purposely build rental apartment market, rental rates remain stable with no real price increase. The decrease shown SUBon the “Rental Rate in Jakarta” graph is caused by the use of Rupiah SECTOR in some of the older developments. This corresponds with a lower cost in PB USD terms. Rental
OUTLOOK
rd
Apt Serviced Apt Condofor-lease
Overall, by the end of 3 quarter 2011, the rental apartment market had recovered its occupancy from the quiet fasting period in August. Looking ahead, the strong positive growth rate in Indonesia as well as the stable economy will further attract foreign companies, hence higher number of expatriates. With lots of supply coming in from the condominium for lease sub-sector by year end, competition in the rental apartment market will intensify with tenants having more options to choose their residency.
LOCAL CURRENCY (RP/SQ.M/MONTH) Q309
Q210
Q310
EUR SQ.M /YR
US$ SQ. FT. /YR
151,847
143,131
141,667
140.1
17.7
185,499
185,768
185,320
183.2
23.1
134,038
126,868
125,263
123.9
15.6
FOR INDUSTRIAL-LEADING INTELLIGENCE TO SUPPORT YOUR REAL ESTATE AND BUSINESS DECICIONS, GO TO CUSHMAN & WAKEFIELD’S KNOWLEDGE CENTER AT: www.cusmanwakefield.com/knowledge *Market terms & definitions based on BOMA and NAIOP standards. This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2011 Cushman & Wakefield, Inc. All rights reserved. Please consider your environmental responsibility before printing this report.
PT. Cushman & Wakefield Indonesia. Indonesia Stock Exchange Building Tw.2, 15th fl. Jakarta, Indonesia +62 21 2550 9500
ECONOMIC INDICATORS GDP Growth
2010 6.0%
2011 6.6%
2012F 6.5%
CPI Growth Central Bank-Rate
6.0%
7.0%
7.0%
6.5%
6.75%
7.0%
Source: Government data (BPS, BI, Ministry of Finance) and CEIC
Ove rview
Leasing Activities The market condition of the Jakarta rental apartment sector has been quite stable despite the anticipated slowing down during the fasting month in August. Surprisingly, by the end of 3rd quarter 2011 the rental apartment market has rebounded from a dip in occupancy during the month in August. Also, with the current economic growth rate of 6.6%, demand and rental rates remained intact with the previous quarter robustness. In this quarter, we continue to see demand being driven by foreigners mainly from the Asia region such as Japan, Korea, China, and India. Others came from the Western counterparts such as USA, Australia and Europe. With 57% of the demand coming in from foreigners and only 43% from the locals, we can see that foreigners still drive the rental apartment market.
NEW PROPOSED Project
Sub-sector
Approx units*
Schedule completion
Area
Ascott Kuningan
Serviced Apt
170
2013
Kuningan
Somerset Kencana
Serviced Apt
187
2014
Pondok Indah
RENT & VACANCY
Leasing Demand
Demand activities in the month of September has picked up since last month with purposely build rental apartment and service apartment maintained their strong occupancy rate at 79.6% for purposely build rental apartment and 75.2% for service apartment. Compared to 2nd quarter figure, the occupancy rate has only declined by about 0.1% for both of these sub-sectors though in August, occupancy rate of the service apartment sub-sector had hit in the range of 50%-60% for most developments. By successfully locking a long-term lease (ranging between 3-12 months), most purposely build rental apartment enjoys a smooth ride during the quiet period of Ramadan. In fact, some renowned area amongst expatriates including Senayan and Pondok Indah sustained a higher occupancy rate compared to last quarter’s figure. For the service apartment sub-sector, the demand dipped during the August period but has since recovered by the end of this 3rd quarter. Foreigners continue to dictate this market with 72% share of the total demand. Again majority of foreigner’s demand comes from Japan, Korea, China and United States. Occupancy rate in the condominium for lease sub-sector has experienced a decrease by 1.6% QoQ. This drop of occupancy is mainly cause by a substantial number of supplies of condominiums entering the market in this 3rd quarter. On top of that, the earlier completed condominiums developments started to enter the leasing market as condominium’s owners have completed their fitting out and are ready to lease their unit back to the market. Among the three sub-sectors, the condominium for lease sub-sector has the least number of expatriates of about 52% from the total demand in this market. JAKARTA RENTAL APARTMENT REPORT 3Q11
1
JAKARTA RENTAL APARTMENT REPORT 3Q 2011 Supply
There is no new supply coming in for both the purposely build rental apartment and service apartment for the 3 rd quarter of 2011. In fact there is a decrease in supply in both sub-sectors. In the purposely build rental apartment sub-sector, Taman Pasadenia in Polumas had sold most of its units while The Kebayoran Baru Mansion in the Kebayoran area is planning to renovate their entire building and reduce the total supply in this sub-sector. Recapping this 3rd quarter, the supply of the purposely build rental apartment has decreased by 1.9% QoQ with 2,318 total units.
RENTAL APARTMENT PRICE
In the service apartment sub-sector, the same trend occurs. Older type development such as Park Avenue Suites sold off some of their units to their tenants, making a total supply of 3,877 units for this sub-sector (a decrease of 0.3% QoQ).
Condo-for-
LOCAL CURRENCY (RP/SQ.M/MONTH) LOCATION
PB Rental Apt Serviced Apt
lease
12-
Q111
Q211
Q311
EUR O/ SQ.M /YR
US$ / SQ. FT./ YR
147,451
146,716
150,369
148.9
18.8
Stable
191,721
194,001
200,331
198.4
25.0
Stable
121,317
125,185
127,784
126.6
15.9
Stable
MONTH
OUT LOOK
Note: 1USD: Rp 8,940; 1EURO: Rp 12,114.49
SUPPLY BY DISTRICT (SA&PB)
The condominium for lease market recorded additional 1,128 new units in this 3rd quarter, bringing the total supply to 34,763 units. These new units come from the newly completed development such as Kebagusan City tower C in Kebagusan, Urbana Karawaci (Berkeley, Oxford, and Yale tower) in Karawaci, Green Central (Adenium tower) in Gajah Mada, Central Park (Amandine tower) in Podomoro City Tanjung Duren, Centro City (tower B) in Daan Mogot, and Cosmo Terrace in Thamrin.
Rental Grow th
By the end of 3rd quarter, market has shown an increase in rental rates for the three sub-sectors of rental apartment. The overall increase in rental rates is approximately 2.7% QoQ bringing the per sm rate to Rp 159,495. It is important to note that most of the rental rates are quoted in USD especially in the service apartment and purposely build rental apartment market. The weakening of Rupiah against the USD creates the illusion of a higher rental rate, while in dollar term it stayed the same.
RENTAL RATE IN JAKARTA
Looking from the micro level of each individual sub-sector, there is an overall increase in rental rates for the condominium for lease sub-sector. The depreciation of Rupiah against the USD induced many private condominium owners to increase their rental price to keep up with the true value of USD as most rates are quoted in Rupiah. Comparing with the 2nd quarter figure, the increase in rental rates was approximately 2.1%, which brought the per sm rate to Rp 127,784. In the service apartment and purposely build rental apartment market, rental rates remain stable with no real price increase. The decrease shown SUBon the “Rental Rate in Jakarta” graph is caused by the use of Rupiah SECTOR in some of the older developments. This corresponds with a lower cost in PB USD terms. Rental
OUTLOOK
rd
Apt Serviced Apt Condofor-lease
Overall, by the end of 3 quarter 2011, the rental apartment market had recovered its occupancy from the quiet fasting period in August. Looking ahead, the strong positive growth rate in Indonesia as well as the stable economy will further attract foreign companies, hence higher number of expatriates. With lots of supply coming in from the condominium for lease sub-sector by year end, competition in the rental apartment market will intensify with tenants having more options to choose their residency.
LOCAL CURRENCY (RP/SQ.M/MONTH) Q309
Q210
Q310
EUR SQ.M /YR
US$ SQ. FT. /YR
151,847
143,131
141,667
140.1
17.7
185,499
185,768
185,320
183.2
23.1
134,038
126,868
125,263
123.9
15.6
FOR INDUSTRIAL-LEADING INTELLIGENCE TO SUPPORT YOUR REAL ESTATE AND BUSINESS DECICIONS, GO TO CUSHMAN & WAKEFIELD’S KNOWLEDGE CENTER AT: www.cusmanwakefield.com/knowledge *Market terms & definitions based on BOMA and NAIOP standards. This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2011 Cushman & Wakefield, Inc. All rights reserved. Please consider your environmental responsibility before printing this report.
PT. Cushman & Wakefield Indonesia. Indonesia Stock Exchange Building Tw.2, 15th fl. Jakarta, Indonesia +62 21 2550 9500
