Office: Despite the global financial storm, the office market remained resilient, showing steady occupancy of 90% and stable asking rental rates in Jakarta’s CBD. The postponement of some projects under construction as a result of financing difficulties will help regulate projected supply over the next two years. This will help ensure stability in the office market, although concerns remain about space downsizing or the postponement of expansions plans by tenants.
Apartment: Development of strata - title apartment projects has been halted due to financing difficulties, so the new supply in 2009 will not be as high as predicted before the crisis. Nevertheless, concerns over substantial existing amounts of supply and the likelihood of dampened demand will cause take-up rates to fall in 2009. Nonetheless, apartment prices are expected to be relatively stable, due particularly to the unwillingness of developers to sell below their construction cost.
Retail: The market continued to see new shopping centers completed in the last quarter of 2008 against the backdrop of weakening purchasing power. Several foreign retailers are still eyeing Indonesia, which is perceived as a lucrative market, particularly given its huge population. Despite the steady occupancy of 88% in the shopping centers in the Jakarta CBD, retail developers should be cautious about the years ahead and emphasize cost efficiency for the sake of themselves and their tenants, mainly because of the financial pressure caused by negative consumer sentiment.
Industrial: Despite the significant amount of existing unsold supply of industrial land available in the Greater Jakarta area, 55 hectares of industrial land was launched in the quarter under review. Overall industrial land sales in the last quarter of 2008 were the slowest of the year, although they were significantly higher than in 2007. Prices for industrial land remained stable.