Marketbeat 2021

Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels. 

Debotabek Retail 1H 2021 

SUPPLY: No New Supply for First Half of 2021 

Similar situation as that observed in Jakarta occurred in Debotabek retail market. Visitor traffic that has started to pick up at malls across the Debotabek area, ahead of the Eid al-Fitr holiday season until mid of June, was again, hampered with the implementation of stricter emergency public activity restrictions (PPKM Darurat) in Java & Bali Island to curve down the second surge of Covid- 19 across the islands.

To support the government effort to overcome the pandemic, numerous retail centers play their part to be a vaccination center or provide temporary space for swab test locations. 

After 4 retail centers commenced their operations in the previous semester, no new supply was seen in the Debotabek area for the first six months of 2021. New supplies from projects such as Paradise Walk Serpong, Omotesando Bintaro, and Greenwalk Mall are expected to enter the Debotabek market by the second half of this year. Should all the proposed new centers meet their completion schedules, the total supply will reach 2,681,500 sqm by the end of 2021. 

DEMAND: End of an era for Giant and Centro Department Stores 

In May 2021, two major players in Indonesia’s retail industry, Giant Supermarket and Centro Department Store, announced their withdrawal from the market and closing-down of all their outlets. Some premises of 395 Giant outlets will be transformed into 5 IKEA stores, several Hero supermarkets and the balance will be closed for good by the end of July this year. With the closing- down of all Giant outlets, Hero Group aims to focus more on expanding its IKEA, Guardian pharmacy and Hero supermarket outlets. Within the same month, Centro Department Store declared its bankruptcy, which was followed by the closure of all its outlets in Indonesia. 

The closure of Giant & Centro during the first semester of 2021 highlighted the challenges faced by retailers, especially due to the pandemic. By the end of June 2021, the occupancy rate of Debotabek retail centers was recorded at 76.9%, dropped by 2.1% from that in the last year. 

PRICING: Rents are Expected to Remain The Same Until COVID-19 Can be Contained

The average base rental rate of Debotabek retail space remained unchanged since the first PSBB restriction to contain the Covid-19 pandemic was imposed in Indonesia, standing at Rp 451,800/sqm/mo, for specialty retail space on the GF. The service charge also remained unchanged, standing at Rp133,500/sqm/mo.

The review of individual tenant’s pandemic circumstances on a case-by-case basis is still in force and Landlords in Debotabek Retail Centers have foreseen that neither rental rate nor service charge will experience an increase in 2021, at least until the COVID-19 pandemic can be contained within the region. In fact, landlord may have to revisit the rental abatement or an agreed payment deferment due to the pandemic which have been gradually lifted / reduced at malls across Jakarta and Debotabek area prior to the implementation PPKM Darurat across Java-Bali island. 

Condominium Q2 2021 

SUPPLY: Modest Number of New Proposed and Existing Projects 

Only 3 projects of Lower-middle and middle segment were launched to the market during the second quarter of 2021, namely Urban Suites (2 Towers), Apple 5 and the 3rd tower of Emerald Bintaro. These projects contribute additional 1,657 units (24% increment QoQ) and bring the total proposed Condominium supply to 157,412 units. 

Approximately 5,387 condominium units from 10 projects were completed in the second quarter of 2021, bringing the total completed supply to 327,036 units which was an increase of 23% compared to in the same quarter in 2020 (YoY).

When the construction progress of under- construction project was about to return to its pre-pandemic pace, the COVID-19 cases in Indonesia reached its peak with 56,000 cases a day, making the government enforce another stricter restriction policy, the PPKM Darurat (emergency public activity restriction), which surely will delay the progress of the project construction again. 

DEMAND: Has Yet Recovered 

A net take-up of 1,844 units was recorded in the second quarter of 2021, 44% lower than the 3,318 units absorbed in the second quarter of 2020 (YoY). Sales rate stood at 93.5%, reflecting an insignificant increment of only 0.1% from the sales rate in the same quarter of last year. Meanwhile, pre-sales rate of the proposed projects decreased by 0.6% from 61.2% in the first quarter to 60.6%.

The government’s decision to extend the relaxation of the waiver of VAT to December 2021, is expected to increase the overall sales rate of existing projects through the end of the year as developer of the nearly-completed proposed projects will aim to soon hand over their units in order to be eligible for this incentive. Average vacancy within the Condominium sector decreased slightly to 50.9% as newly completed units were still being handed over gradually. 

PRICING: Price will Remain at the Current Level 

No price growth was observed on QoQ basis, staying at Rp. 43,300,000 per sqm, whilst the YoY price growth was recorded at only 0.5%. The nearly-completed projects have been offering fully furnished package or rental guarantee to attract potential buyers in addition to the VAT waiver incentives from the government. Prices in the secondary market remained very competitive, especially for the upper segment projects. Overall, the average selling price is expected to remain stable until next year, as demand is projected to remain slow, particularly for the proposed projects. 

Rental Apartment Q2 2021 

SUPPLY: No Additional New Supply 

No new Purpose-Built Rental Apartment and Serviced Apartment projects were identified during the review quarter. Several under construction Serviced Apartment projects such as Somerset Kencana, Somerset Sudirman, Citadines Gatot Subroto, Citadines Sudirman, and Ascott Menteng, are expected to delay their operation schedule due to the worsened COVID-19 pandemic. 

DEMAND: No New Long Stay Demand 

No demand from expatriate tenants was recorded during the review quarter, given the continuing inbound travel restrictions to Indonesia. Some expiring lease contracts were not renewed, and postponement of new lease contracts were also observed, as some expatriates returned to their home countries due to the pandemic. Occupancy of the Purpose-built Rental Apartment sub-sector was recorded at 58.3%, a 1.5% decrease compared to the last quarter’s figure. 

In Serviced Apartment sub-sector, demand inquiries slightly increased during Q2 2021 from short- stay tenants during Eid-Fitr holiday. Occupancy rate was recorded at 48.2%, a slight 0.7% increment compared to that in the last quarter. In comparison to that in the last year, this figure reflected 5.0% occupancy increase.

On the other side, the Condominium-for-lease sub-sector experienced sharpest occupancy decline of 7.1% QoQ, to 45.2%, due to the worsened COVID-19 pandemic and the additional units available for lease from the newly completed condominium projects during the review quarter. This figure reflected a 11.9% occupancy decrease from that in the same period last year. 

With the announcement for implementation of emergency public activity restriction (PPKM Darurat) in Java and Bali since July 2021, which put stricter restrictions on community activities, occupancy rate of the rental apartment sector is projected to decrease in the next quarter. 

PRICING: Rents Remained Under Pressure 

Despite the fluctuation of the Rupiah against US Dollar during the review quarter, average rental rate of Purpose-built Rental Apartments and Serviced Apartment sub-sectors remained relatively 

unchanged at Rp. 241,550 and Rp 356,576 per sqm per month. Rental rate discount, subject to negotiation, was applied in most rental apartment projects to attract potential tenants. 

The decline in Condominium-for-lease occupancy that led to drop of the average rental rate of Condominium-for-lease sub-sector, however, caused the average rental rate of the overall rental apartment sector to drop by 4.0% QoQ to Rp. 142,141 per sqm per month, as individual unit owners prepared to accept much lower rates during the pandemic. Overall, the average rental rate for rental apartment sector is projected to remain relatively under pressure throughout the rest of 2021. 

Landed Residential 1H 2021 

DEMAND: VAT Incentives Induced Inquiries of Ready Stock Units 

Despite the pandemic, landed residential market continued to record healthy transaction rate. The average number of units transacted were recorded at around 26 units per month per estate, growing by 11% compared to in the same period last year. The number corresponds to the average sales value of around Rp 36.8 Billion per month per estate, a rise of 17% YoY. Following the trend of supply, Tangerang remains as the submarket with highest average take-up at 39.5 units per month per estate, followed by Bekasi at 23.8 units per month per estate. 

Some of the transactions occurred in the ready stock units, in response to the Government’s Value Added Tax (VAT) incentive program which has taken place since March 2021. The program offered full VAT waiver for houses priced up to Rp 2 Billion and 50% VAT waiver for units priced between Rp 2 Billion up to Rp 5 Billion, which shall be handed over to buyers at least by late August 2021 (and is planned to be extended). Rise of inquiries for ready stock units which fall within the program’s criteria was observed in most estates.

On the other hand, pre-sales of indent houses still made significantly high proportion of units sold during the review period, since many estates only have a limited amount of ready stock units, especially in large developments where most of units were sold during their launching period. 

Since end-users were still the main driver of the market which contribute around 74% of buyers, mortgage is the most favorite payment method of housing transactions. During the first half of 2021, many estates have reported a more relax bank mortgage rules and selection of new applicants compared to in the last year. Mortgage rejection rate has decreased, even though close background checking of those working in certain industries was still in place. Interest rate was also low during H1 2021, which attracted buyers for the lower monthly installment plan.

However, despite Central Bank’s latest Loan To Value (LTV)/Financing To Value (FTV) relaxation which allows 0% Down Payment (DP) for all house mortgage facilities from March until December 2021, many estates were still adapting a minimum DP of 5-10% for first mortgage facility, to ensure buyers’ commitment and ability to complete their home installment. Mortgage made 75% of payment method preference, followed by hard cash at 13% and cash installment at 12%. 

During the review semester, demand from Lower-Middle segment units shared the highest proportion, contributing 40.7% of this semester’s demand, followed by Middle segment at 30.5%, as end-users who comprised mostly young family and singles looking for home to be occupied are the main demand generators of the market. 

SUPPLY: Conservative Price Growth as Pandemic Still Looms 

The first half of 2021 brought a total of 5,377 units of new supply, growing by 33.8% YoY compared to H1 2020’s figure. No new estate was launched during the semester, while a few new estates are expected to enter the market in the next semester. The Lower-Middle segment dominated the supply by 41.8% and followed by Middle segment by 21.9%.

During the review period, the amount of new supply coming from Upper segment was relatively high at 1068 units, which makes it quite similar to the Middle segment (1179 units). Ever since last semester, some developers have gained confidence in selling out their higher-end units despite the ongoing pandemic, considering Government’s vaccination program and projection of economic improvement at the beginning of 2021. 

As uncertainty still looms due to the pandemic, developers kept making efforts to ensure price affordability on their products. Greater Jakarta’s average land price was recorded at Rp 11,600,758,- during H1 2021, growing by 1.2% from previous semester. Many developers preserved conservative land price growth while others held back on creating increments. The overall average sales price only grew around 2.24% YoY, one factors being related to building price’s inflation. 


Announcement of the second lockdown which started in July 2021 has alerted the market. The restriction of activities, which is initially planned for about 3 weeks and currently being extended, puts developers in wait-and-see approach since marketing activities are bound to be limited and prospective buyers are projected to be more careful in making investment decisions. Product’s price segments and types to be launched are being reconsidered to cater to market’s purchasing power during this new phase of pandemic. 

Aside of that, issue on Government’s VAT incentive program to be extended until the end of 2021 made developers to focus on selling and finishing their under constructing products to be delivered by the end of the year, since stocks of ready-to-move units within the program’s criteria are becoming very limited.

The program is projected to continue supporting unit sales in the second half of 2021 as well. Low mortgage interest rate may continue to be an attractive bargaining point for purchasing houses, despite Central Bank’s latest LTV/FTV relaxation which allows for 0% DP for all house mortgage facilities is still deemed ineffective in practice. 

Industrial Warehouse Q2 2021 

SUPPLY: Optimism on New Land Opening 

As industrial land availability in favorable location becomes more limited, despite the uncertain market conditions due to the pandemic, an estate in western corridor, Modern Cikande, added about 80 hectares to their land supply, bringing the industrial land inventory in the Greater Jakarta area to 15,575 hectares. This indicates that developers are still optimistic on the potential of the Greater Jakarta industrial sector. Developers are observed to still look for opportunities whilst closely monitor the market and the related government policy, including the impacts of the Covid- 19 pandemic on the market. 

There is addition of 28,802 sqm to the inventory of warehouses for lease in the Greater Jakarta area, bringing the total supply of warehouse for lease to 1.87 million sqm. Until end of 2021, about 115,000 is in the pipeline to enter the market. 

DEMAND: Land Demand Increased along the Eastern Corridor 

Demand for industrial land has shown progressive recovery during the review quarter, as reflected by a 33.5% increase YoY in the net absorption or 52.04 hectares in the Greater Jakarta area. For several quarters, GIIC continuously enjoyed significant transactions which represented 63% of net land absorption rate recorded this quarter, from automotive sector. Bekasi and Karawang remain as the most sought-after area by high-tech industries such as automotive including electric vehicles, logistics, and data center which is expected to continuously expand. Tangerang and other parts in the western corridor are more for food and chemical industries. 

As of June 2021, the average occupancy rate of warehouse for lease in the Greater Jakarta area was recorded at 83.7%, an increase of 1.3% from in the previous quarter. The prolonged Covid- 19 pandemic is still observed to cause the slow demand growth of warehouse for lease, with demand mainly from logistics related firms including e-commerce, data center, automotive and consumer goods. 

PRICING: Land Price Remained Unchanged 

The industrial land price remained relatively unchanged during the review quarter as impact of the pandemic on demand continued. As of June 2021, the average land price in Greater Jakarta area was recorded at Rp 2,542,000 per sqm (-1.9% YoY), whilst the average asking rental rate for warehouses in the Greater Jakarta area was Rp.72,000 per sqm / month. 

Hotel 1H 2021 

SUPPLY: No New Hotel Supply 

Even though there are several under-construction hotel developments, the current uncertain conditions due to the pandemic have held the construction progress and delayed the completion time of those projects. So far, hotel room inventory in Jakarta stood at the same level as that in the previous review period of 41,423 hotel rooms. 

DEMAND: Occupancy Continued to Improve 

Continuing the trend from the last semester of 2020, occupancy continued to show positive improvement. Despite the fluctuating condition due to the pandemic, hoteliers managed to maintain the performance of their hotels, partly from the occupancy driven by the quarantine requirement for travelers arriving from overseas during the pandemic. The average occupancy growth is 15.7% YoY. As of June 2021, hotel occupancy of 3-star, 4-star, 5-star and luxury segments stood at 50.6% (32.7% YoY), 51.3% (23.6% YoY), 49.1% (28.5% YoY), 40.1% (37.6% YoY) respectively. 

Notwithstanding, at the end of June 2021, Indonesia including Jakarta and the surrounding areas faced the second wave of covid-19 surge. The daily case increased significantly, and expert predicted that the peak of the surge is yet to come. This situation which leads to the significant decline of the passenger arrivals to the city is expected to disrupt hotel industry performance, which has started to improve, even though the government has increased the quarantine period of travelers arriving from overseas from 5 days to 8 days. Hoteliers may anticipate unsteady business situation, with quick change in regulations due to the pandemic. 

PRICING: Readjustment of Room Rates 

As room rate is a factor that relates closely to hotel occupancy, the improvement of occupancy in the last 3 months of the review period have made hoteliers start to readjust their room rates. Overall, Average Daily Rate (ADR) of hotels in Jakarta increased by 37.9% YoY. 5-star hotels made the most significant adjustment in order to revive from its biggest fall. Average Daily Rates as of June 2021 were: 3-star: Rp. 367,973 (25.0% YoY); 4-star: Rp. 556,477 (8.9% YoY); 5-star: Rp. 1,039,382 (44.1% YoY); and Luxury: Rp. 1,606,895 (5.7% YoY). 

In this unpredictable situation, where number of covid-19 cases cannot be accurately predicted and regulations may change emergently depending on the situation, fluctuation of the general hotel market is expected. Hoteliers ought to set their future strategy under various possible scenarios to compete in the pandemic and post-pandemic, such as exploring other potential markets, branching out through multiple channels and studying of post-pandemic guest behavior. 

About Cushman & Wakefield 

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.

To learn more, visit or follow @CushWake on Twitter. 

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