Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.
CBD Office Q4 2021
Supply: One Project Completed in Q4
One newly completed office project, namely Menara BRIliant of 45,000 sqm entered the CBD office market during the fourth quarter of 2021. A total of about 118,000 sqm new office space has entered the market during 2021, which lower than that was recorded in the previous year of about 196,000 sqm. The proposed supply set to enter the market in 2022 is projected at approximately 225,000 sqm from 3 projects.
Demand: Market Contraction Ended
Some large leasing transactions were recorded during the fourth quarter of 2021 such as in MSIG Tower of about 15,000 sqm by online education institution, in Medialand Tower by a logistics company of 5,500 sqm and in Capital Place of 4,000 sqm by Nokia. Overall, improving trends in both inquiries and transactions from those in 2021 were observed throughout the year, with demand coming mostly from tenants looking for office relocations and consolidations for 2022 and beyond.
After six consecutive quarters of market contraction trend, the Jakarta CBD office market recorded its first positive quarterly net-take-up of 17,900 sqm in the fourth quarter of 2021, indicating a very positive sign for market recovery in the near terms. The average occupancy rate of the CBD office market, however, decreased by 0.2% to 70.4% by the end of December 2021, due mostly to the large additional supply.
Pricing: Rental Decreased Further
Base rental rate in Rupiah decreased further by 3.0% QoQ in the fourth quarter of 2021, inline with weak demand and decreasing average occupancy of the market. By the end of December 2021, the average base rental in Rupiah term stood at Rp 175,100 per sqm per month (a decrease of 9.1% YoY), whilst in US Dollar equivalent, it stood at US$12.3 per sqm per month (a decrease of 9.6% YoY). Meanwhile, service charges remained relatively unchanged over the fourth quarter of 2021.
With the ongoing improvement of office market in Jakarta CBD area following the stronger economic performance of the country, the trend of positive net take-up is expected to continue in the coming quarters. Rentals, however, will remain stagnant as vacancies will remain high as completion of large
office projects in Sudirman, Thamrin and Kuningan area in year 2022 may not be followed by the same level of demand.
Jakarta Retail Q4 2021
Supply: Opening of One Retail Centerin South Jakarta
Closing out the year, the Jakarta retail market recorded an addition of one new retail center in South Jakarta, namely AEON Mall Tanjung Barat. The opening of AEON Mall Tanjung Barat added approximately 40,000 sqm of retail space to the market. This fourth AEON Mall in Indonesia together with Southgate Residence project is expected to create a new one-stop urban lifestyle complex in South Jakarta.
With total additional of two new projects in 2021, the total full year new supply of Jakarta retail centers in 2021 reached 70,000 sqm. Another two retail centers with approximately 73,000 sqm of retail space are expected to enter the Jakarta retail market by 2022. The total refurbishment and transformation of Sarinah, the oldest retail center in Jakarta, is estimated to reach its completion in the first quarter of 2022. Should all the proposed new centers meet their completion schedules, the total Jakarta retail supply will reach 4,716,400 sqm by the end of 2022.