The office space sector in Semester I-104 was posting slowdown with decreased absorption up to 50% in the first 9 month of 2014 against same period last year. Such was outcome of Cushman & Wakefield research presented by Head of Research & Advisory Arief Raharjo in Jakarta on Tuesday [14/10].
Arif stated that due to lack of new supply and availability of room in existing buildings, actives of rental transaction through Q III-2014 was more by tenants who extended contract or space expansion.
Demand for office space itself was still high including relatively small space around 100m to 300m. Two medium sized transactions took place through this quarter by security and trading companies respectively using space. 1,100 m2 up to 300 m2 at BEI and Mid Plaza.
Through this quarter absorption was higher at 9.600 m2 to come to accumulative demand at 4.40% [up by 1.6% y o y] and occupation level by end of Q III 2014 was 94.0% [-0.4% Q o Q].
Grade A and Grade B office building posted positive absorption, 5,500 m2 and 5,300 m2 respectively while Grade-C posted negative absorption [1,200 m2] as tenants moved to grade-B office buildings.
Base rent plus service charge of grade A office building was still stable through Q III, but in case of Grade B and Grade C rental fare was still increasing, especially of building with high occupancy with high rental tariff for tenants extending rent or new tenants. By end of September 2014 average gross rental in Rupiah increased by 2,2% to become Rp. 328,000 per m2 per month; while in USD it was down by 2.0% to become USD 27.39 per m2 per month.
Slowdown in selling price increase of stratatitle office space was still continuing through this quarter. Selling price of strata title office space was still at Rp. 46.5 million per m2.
As supply would be in by Q IV 2014, occupancy level might post downturn till end of 2014. Absorption level might would increase significantly after space occupancy of new office spaces by “pre-committed” tenants in the newly completed buildings. Meanwhile average rental price seemed not to change till end of 2014 because through the first 9 months of 2014 building owners had increased their rent. (SS)
Business News - October 17, 2014