Business of Instant Office Services

The construction of office space in Jakarta is progressing at an incredible pace. Despite last year’s fuel price increases, the weakening of the rupiah and an increase in interest rates, PT Colliers International Indonesia and PT Procon Indah estimate that the office space property market will see greater activities in 2006. “All this is attributable to rising occupancy rates and improving investor sentiment,” a Colliers analysis says.

A number of office buildings are being built and will be on the market this year. They include Plaza Asia Sudirman, Menara Nusa Rasuna Said, Menara Kuningan Rasuna Said, Sudirman Plazas 1 and 2, Jakarta Citi Center and Westin Boutique Office. Grand Indonesia Hotel Indonesia, meanwhile, will be ready in early 2007.

Interestingly, about 46 percent of these office space projects are being sold under the strata-title scheme. Strata-title office space is expected to gain popularity even though the take-up for existing supply is low. Indeed, having office space in Jakarta’s Central Business District is not only prestigious, but could also be considered necessary in running a business.

For most companies wanting to progress and flourish, having an office in an upmarket building located in the Golden Triangle is a must. Not only established companies but also new enterprises can have a presentable office in a strategic location, complete with sophisticated facilities and an established corporate image.

At least this is what a number of providers of office space services are offering. They offer not only space but, most importantly, also services. These companies offer services ranging from virtual offices and basic secretarial services to office rooms with great flexibility regarding size, for example a small one for just one person or one big enough to accommodate 40 people.

Although their funds are often limited, users of these services may operate their companies just like large enterprises, state-owned companies and multinational corporations usually do from the most prestigious area in Jakarta. A client may simply have a business card listing the address of a high-rise building in this area, say in the Sudirman area, but he may just use a special room, including all office facilities such as furniture and a sophisticated telecommunications system supported by IT, the latest PABX, voice mail, broadband Internet and 24-hour CCTV.

Many businesspeople are interested in this instant office service. This is the type of service needed by many newly established companies that do not want to have high overheads or by foreign enterprises that have just started operating in Indonesia and are exploring new opportunities.

“Usually, business has yet to pick up or the company has yet to recruit people. So we meet all their needs,” said Viera Djawahir, business development manager of the Executive Center, a company located in Jakarta’s Sudirman Square Tower providing serviced offices, virtual offices, business bases and business services.

The Executive Center is one solution for new companies in Indonesia, especially those wishing to start up business on a small scale or need only a small space. As mentioned, office-leasing companies provide not only offices, just like the building management of an office building, but they also offer an array of office operational services.

They function just like business centers at five-star hotels, the only difference being that they offer the same luxury at much lower prices. In comparison, if you rent an office in an office building you must rent it for at least half a year, perhaps even one year.

But if you rent office space from a company providing instant office services, you can rent the space for just an hour, for example for a meeting, or for a day, a week, a month or even a year. Besides international-standard office facilities, they provide a wide range of other services. Office space providers also offer supporting personnel like operators, secretaries and other professionals.

“You can calculate for yourself how much you can save from not renting an office or purchasing your own office,” Viera said, adding that the Executive Center charges only Rp 500,000 a month for a virtual office in a basement while for office space on other floors the monthly rent ranges between Rp 7.5 million and Rp 15.5 million, excluding services.

At present, the Executive Center has about 23 companies as clients ranging from management and waste treatment consultancy companies to representative offices of cosmetics products and heavy-duty equipment providers. Some 90 percent of these clients are multinational corporations while the remaining 10 percent are local companies.

In fact, the Executive Center operates not only in Jakarta but also in very strategic locations in Hong Kong, Bulgaria, Vietnam (Ho Chi Minh City), China (Shanghai), Singapore, Australia (Sydney), Japan (Tokyo) and South Korea (Seoul).

Besides the Executive Center, another instant office provider worth considering is PT Citra Ekseutif Otorita (CEO) Suite. Set up in 1997, this company, according to its president director, Mee Kim, is one of the pioneers in this particular property business in Jakarta. CEO offers office space for rent in two buildings, namely Wisma GKBI (Association of Indonesian Batik Cooperatives) and the Jakarta Stock Exchange Building, both located in the Semanggi area. The rent varies from US$8 per hour to $700 to $5,000 monthly.

Although serviced offices have yet to gain popularity in Indonesia, this concept has started to draw attention as is evident from the fact that at least 80 percent of the office space that CEO offers is currently occupied. Mee Kim, former senior manager of Australia’s Servicorp, said CEO had some 300 clients in Jakarta alone. Globally, she added, CEO has some 700 clients in Jakarta, Singapore, Kuala Lumpur and Shanghai.

In the present global era when information technology plays a significant role, instant offices are becoming more popular among businesspeople. Aside from CEO, which does not own any buildings, there are at present a number of building management companies that offer instant service offices, including Menara BNI 46, Menara Kadin in Kuningan and Menara Bapindo on Jl. Sudirman. (Burhan Abe)

The Jakarta Post, January 17, 2006

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