Jakarta Grade A office rents decline 8.1% for full-year 2021

Rent decreased 2.5% in the final quarter of the year.

Jakarta’s Grade A office market recorded a 2.5% q-o-q decline during the fourth quarter of 2021. Because of the current situation, JLL says landlords of office buildings with low occupancy were still offering competitive prices to attract tenants.

For the full-year 2021, Grade A rents decreased by 8.1% y-o-y.

Here’s more from JLL:

Technology companies continue to dominate occupier demand

Net absorption was recorded at 11,700 sqm which resulted in a stabilised occupancy rate of 66%. The strongest demand came from technology and insurance companies. Aside from those industries, the telecommunication and finance sectors also remained active in looking for office space. However, the downsizing trend also continued in the quarter.

Activity by flex space operators was observed in 4Q21, with one operator occupying the space released by another operator.

No new completions added in the quarter

In the last quarter of 2021, no new Grade A buildings were completed. Autograph Tower’s completion was delayed to 2022. The overall vacancy in the Grade A CBD office remained relatively high at 34%.

Together with Autograph Tower, there are two office buildings expected to complete in 2022: Mori Building and Rajawali Place, potentially creating more than 230,000 sqm of new supply.

Outlook: Rents to remain under pressure due to upcoming supply

Rents in the CBD will remain under pressure due to limited demand and massive upcoming supply.

Demand for Grade A office space is expected to improve slightly with the projected economic recovery of 2022. Flight-to-quality is likely to continue as a main theme with the growing requirement for sustainability, particularly from multinational companies.

Note: Jakarta Office refers to Jakarta's CBD Grade A office market.