Location Means Everything

Deciding upon office premises is not that easy. In which building to have an office and at what location, for example, help confirm the positioning of your company — not only in terms of the type of business your company deals in but also in which class your company finds itself.  

One post-production advertising executive claims that the clients visiting his company when his office was located in Tebet, South Jakarta, were extremely different from those visiting his present office in Kebun Jeruk, West Jakarta. “As my office is now located in a more elite area, I can demand a higher price even though I use the same equipment,” he said.  

Indeed, a number of upper-class post-production advertising companies are situated in Kebun Jeruk. This particular location also serves as a benchmark for new companies in the same business line. They dare not risk having their offices somewhere like Cawang, for example, where the market has not been developed.  

This is what is usually called grouping. Companies providing the same services tend to be found in a particular location because their market has been developed there. Electronics vendors, for example, prefer to run their business in Glodok, Kota, which is the largest electronics center in Jakarta, or even in Indonesia. Furniture companies find it more suitable to have showrooms along Jl. Panglima Polim-Jl. RS Fatmawati.

Another example is textile sellers, who often open for business in Pasar Baru or Pasar Tanah Abang, while decorative flower vendors prefer to do business around Jl. Mahakam, Kebayoran Baru.  

You can draw up a long list of groups of businesses selling a similar service in a particular location. This may take place quite naturally or come about because the government or a major developer has created this particular location. Kemang is an example of an area that has developed naturally as a site for cafes and businesses related to the needs of expatriates, such as galleries.

Meanwhile, Kemayoran, for example, has been developed into a center for automotive products and workshops.  

In the same vein, the developer of Jababeka is striving to turn an area in Cikarang into an international industrial estate, while the developer of Lippo Cikarang aims to attract IT companies in an area dubbed the “Silicon Delta”.  

In several major cities in a number of countries, the grouping of certain businesses in one area has a longer history. In New York, for example, institutions dealing in financial business, in particular stocks, are found on Wall Street, while the world’s largest film industry area is in Hollywood. How about Jakarta, then?  

While the tendency is there, Irma Kurnia, marketing manager of Gandaria 8, a company managing a new office building in Gandaria, Jakarta, said that the condition was not as pronounced as in other cities around the world, especially because the concept of developing modern office compounds in Jakarta is relatively new. Indeed, certain commodities have their respective centers.

Take, for example, Harco electronics center, Mangga Dua wholesale center and Roxy mobile phone center. These centers, however, do not hold monopolies for particular businesses. As for modern business lines, such as the banking business, management consultancy, law firms, publishing companies, public relations companies, etc. the grouping is not very tight.  

However, the office space market in Jakarta has shown a significant increase in activities. Great enthusiasm in the office space market can be found not only in major business districts. The construction of new office buildings in Jakarta is in response to high demand for offices of good quality. With the economy improving, many local companies need more office space.  

After the prolonged recession, the office space market in Indonesia is again showing signs of recovery. In the next one or two years, according to Jones Lang LaSalle Indonesia, the office space market will be a driving force in Jakarta’s property market, as long as the good macro-economic conditions and political stability are maintained.  

Signs showing the revival of enthusiasm in the office space market can at least be seen in the net take-up of office space in Jakarta during the third quarter of 2007, namely 13,700 m2, a 23 percent increase from the previous quarter.  

Indeed, the grouping of offices on the basis of their line of business has not taken place directly. It is undeniable, however, that large companies with high positioning opt for prestigious office buildings, one reason why grouping has taken place naturally.

The main tenants in the central business district (CBD) still represent banking, trading, business and financial services and the mining business. Companies providing services related to the capital market are obviously housed in the Indonesian Stock Exchange building. In the Sudirman Central Business District (SCBD), there are at least two lines of businesses that are grouped together under the same roof, namely electronics at the Jakarta Electronics Center and luxury cars in Automall.  

Meanwhile, companies dealing in oil, consumer goods and engineering choose the locations of their new offices in South Jakarta, particularly along JL. TB Simatupang, owing to the close proximity of the toll road.  

It is this that encouraged Gandaria 8 to put up an office building of top quality outside a CBD area. “But indeed, it is located only a few minutes from the CBD. We have easy access to various other elite locations such as Pondok Indah and Kebon Jeruk as we are right at the toll road leading to Merak,” Irma Kurnia said.  

Interestingly, the office building constructed by Pakuwon, a noted developer, is located in a superblock. Also to be developed on the 8.5-hectare superblock are an apartment building, a mall and a five-star hotel, scheduled for completion by late 2009.

Complete facilities of top quality will be made available. Indeed, there is no special designation, but what’s obvious is that there will be “a natural selection” as only certain companies, like mining and oil companies and financial institutions, will be able to have offices at Gandaria 8. So, if you don’t want to take a risk, don’t make a mistake in choosing the location for your office. (Reyhan Fabiano)

The Jakarta Post, January 22, 2008

Latest news

Related news