Jakarta serviced apartment occupancy rate up improves to 61.1% in Q4

It increased by 9.4 percentage points compared to the previous quarter.

A recent Colliers report says the occupancy of serviced apartments in Jakarta increased significantly by 9.4 percentage points to 61.1%, compared to previous quarter, but the overall occupancy level remained below pre-Covid-19 levels due to the lack of international corporate visitors. 

“We have seen strong leasing demand, particularly related to domestic leisure followed by business travel, with local corporate groups dominating. Meanwhile, rentals have stabilized since the last quarter, with serviced apartment providers setting fix prices, especially for long-term rates,” the analyst says.

Here’s more from Colliers:

An upturn in business demand is, however, more difficult to predict, given so much has changed in terms of working habits, through either government intervention or changes in company working models, e.g., WFH, hybrid working, etc. Moreover, the International Air Transport Association (IATA) anticipates that pre-pandemic travel levels will not be reached until at least 2024. 

Further, we have seen a change in the expatriate demographic coming to Indonesia, it is now being dominated by single/couple Asian executives with relatively limited budgets, rather than Westerners. 

Hence, we are of the view that serviced apartment providers will reduce their reliance on long-stay guests to concentrate more on short-stay demand, which offers more scope for adaptation in this ever-changing market. 

We are of the view that the pandemic is a short term setback, and many believe that mass vaccinations and the reopening of borders will improve the leasing market. Thus, the outlook for 2022 appears relatively positive, with a strong economic recovery, domestic demand and online searches for staycations at forefront of the current upswing. 

The positive outlook, WFH and a tidal wave of young executives looking for privacy will spur rental demand. We expect average rents will rise in a range of 1% to 3% as competition intensifies given upcoming abundant supply.