Jakarta office rents down 2.8% in Q1

Rents are expected to continue on a downward trend for the rest of the year.

Grade A office rents in Jakarta declined by -2.8% q-o-q in the first quarter of 2022 as high vacancy rates and limited market demand persist. 

JLL says the declining rents for CBD offices are mostly expected to continue in 2022.

Here’s more from JLL:

Vacancy is relatively stable in the quarter

Net absorption for the first quarter of 2022 was recorded at almost 6,000 sqm. The technology sector was still the most active occupier segment.

Other than the technology sector, companies in the construction industry were also notably active in looking for space. Enquiries continued to pick up along with the recovery of economic activities and the betterment of outbreak countermeasures.

No new completions in the quarter

No new Grade A buildings were completed in 1Q22. For several reasons, the completion of three projects from 2021 (Rajawali Place, Mori Building, Thamrin Nine Tower 1 – Autograph) was further postponed to the next quarters.

Thamrin Nine Tower 2 – Luminary is estimated to complete in 4Q22. Hence, the anticipated upcoming supply in 2022 will be around 270,000 sqm.

Outlook: Upcoming massive supply to suppress rent increases

Demand is expected to improve slightly with relatively smaller space requirements, while flight-to-quality remains the main theme. However, the downsizing trend might continue.

Pressure on occupancy rate continues due to the upcoming massive supply.

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