Marketbeat Reports, Q4 2023

Non-CBD Office H2 2023

Supply: One New Project Entered The Market

One project was completed during the second semester of 2023, namely Jakarta International Tower (21,000 sqm) on Jl. Letjen S. Parman, West Jakarta, bringing the total stock of Jakarta Non- CBD office to about 4.9 million sqm by the end of December 2023. Another new office project: Menara Jakarta Fortune Tower in Kemayoran with total space of about 82,000 sqm is expected to enter the market in 2024.

Demand: Gradual Occupancy Improvement

Despite the slower transaction activities compared to in the previous semester, a positive net take- up of 10,700 sqm was still seen in overall Non-CBD office market during the second semester of 2023, bringing the total absorption for the full year 2023 to 41,600 sqm.

This annual net take-up indicated a continuous sign of Jakarta Non-CBD office market recovery post pandemic era. Majority of net take-up occurred in South Jakarta area, Followed by East Jakarta and Central Jakarta. By the end of December 2023, the average occupancy rate increased by 0.7% YoY to 80.2%.

Pricing: Rental Continued to Rebound

By the end of December, the average Non-CBD gross rental stood at Rp.201,400 per sqm per month (an increase of 5.1% YoY). In US dollar terms, the figure was US$13.07 per sqm per month, reflecting an increase of 5.9% YoY.

With the projected positive economic growth of about 5% in 2024, demand is projected to grow further, mostly coming from the relocations and/or expansion of the owners’ group companies.

Vacancy in the coming year will decrease as the net demand is expected to reach higher level than that of the new supply. Gross rental rates are projected to increase, mainly due to the increase of the service charge component.

Jakarta Retail Q4 2023

Supply: New Supply from Transformed and Renovated Projects

By the end of 2023, there were two shopping malls, Living Plaza Puri and La Piazza, that have completed renovation and added supply to the market. Completion renovation of Living Plaza Puri which was known as PX Pavilion in the 4th quarter of 2023, added 17.000sm of retail space, which is 4,000 sqm larger than the previous PX Pavilion, to the supply, bringing the total cumulative supply to 4,711,000 sqm by the end of 2023. This reflects a 0.2% YoY growth of the supply.

In 2024, Jakarta is expected to welcome the establishment of three new shopping malls: Agora Lifestyle Centre in Thamrin Nine, Lippo Mall East Side in Holland Village, and Mall Menara Jakarta. The completion of these shopping malls is expected to contribute to a 2.12% increase in the future cumulative supply.

Lay out modification and renovation of shopping malls are ongoing to improve the retail experience. Pejaten Village and Gajah Mada Plaza are presently in the process of interior renovations which are expected to complete by 2024.

Demand: Rising Occupancy and Introduction of Dynamic New Brands Set The Retail Landscape

A demand growth of 2% YoY was recorded during the review quarter, bringing the total cumulative demand to 3,703,000 sqm. The expansion of international brands, both in existing and newly renovated malls improved the average occupancy rate of the market by 1.5% YoY or 1.8% QoQ to 78.6% as of the end of 2023. F&B retailers remained the most active, followed by beauty & lifestyle brands.

UNIQLO and KKV opened their new outlets in the newly renovated La Piazza and Chicco has recently established its largest store in Southeast Asia in Gandaria City. Other international brands that opened their first store in Indonesia during the review quarter included Dagu Rice Noodle, Monster Curry, Sushiro, Matchaya in F&B retail, and Pinko, POLA, Acme De la Vie, and Flying Tiger Copenhagen in beauty and lifestyle retail.

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