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1Q 2013 i the knowledge

research & forecast report apartment market report

Supply The year 2013 saw 3,979 newly completed units from five apartment projects comprising four new projects and one tower extension for the Green Palace Apartment project. Green Palace Apartment is part of the Kalibata City mega-project, comprising three components including Kalibata Residences, Kalibata Regency and Green Palace Apartment. All of these new projects brought the cumulative supply of strata-title apartments in to 121,255 units. Compared to the total quarterly supply in the 1Q 2012, this quarter’s supply is 7% lower. Overall, this cumulative supply of strata-title apartments represents 94% of the total operating apartment units in the whole Jakarta area.

LIST OF completed project in 1Q 2013

Asking Price apartment name location region #units (idr/sq m) Green Palace Apartment (Tower S) Kalibata 8 - 9 million 630 The Royal Springhill (Tower Marygold 16 - 17 million 384 “The average apartment price, for units in the and Magnolia) CBD, has climbed substantially (26%) YoY from The Residences at Dharmawangsa 2 Dharmawangsa South Jakarta 41 million 89 IDR25.9 to 32.6 million/sq m. In South Jakarta, Green Lake Sunter (Tower South) Sunter 13 - 15 million 876 apartment prices went up by 25% YoY from IDR17.8 to 22.5 million/sq m. Similarly, in the The Green Pramuka (Tower Faggio Jend. A. Yani Central Jakarta 8 - 9 million 2,000 apartment for lease sub-sector, the average asking and Pino) rental rates in the CBD climbed significantly by 11.2% QoQ from US$23.69 to 26.34/sq m/month.” Colliers International - Research

Furthermore, of the total supply for this quarter, approximately 60% is located in Central Jakarta, while the remaining portions are located in North Jakarta (22%) and South Jakarta (18%). Despite being located in Central Jakarta, The Green Pramuka sits on the edge of , and thus is characteristic of East Jakarta, rather than the Central Jakarta. This project caters to the mid-low segment, having larger units. Based on market segmentation, the mid-low segment dominated this quarter’s supply at 66%, while only a few units from The Residences at Dharmawangsa 2 offering luxury projects. Mid-segment projects completed in 1Q 2013, including Green Lake Sunter and The Royal Springhill for example, represent 32% of the stock for the quarter.

Meanwhile, between January and March 2013, four new apartment projects commenced or were launched in Jakarta, with a total of 3,830 units. Two of the projects, The Capitol Park Salemba and Gallery West, are newly launched projects, while Tower Dahlia at Bassura City and Tower Orchid at The Green Pramuka are extensions to existing projects. All of these projects are located outside CBD area and will gradually enter the market in 2-3 years time.

A combination of residential and commercial functions characterizes the concept proposed by the newly launched projects. As Jakarta is one of the most traffic-congested cities in the world, the “back-to-the-city” marketing gimmick is being promoted to boost sales for apartments which are located outside the centre of Jakarta.

www.colliers.com jakarta | 1q 2013 | apartment

Apartment LIST OF newly launched project in 1Q 2013 unit Sector apartment name region #units type size (sq m)

The Green Pramuka (Tower Orchid) Central Jakarta Studio - 2BR 21 - 36 1,000 The Capitol Park Salemba (2 Tower) Central Jakarta Studio - 3BR 24 - 88 1,700 Apartments Gallery West 1BR - 3BR 51 - 128 280 For Strata-title Bassura City (Tower Dahlia) East Jakarta Studio - 3BR 20 - 48 850 Sale Colliers International Indonesia - Research Other growing areas in Central Jakarta include The number of new projects (i.e. both those Kemayoran and , which expect being launched and introduced to market) has to see more apartment developments within decreased significantly since Jakarta’s new the next 2-3 years. For example, three projects governor was elected in October 2012. The are under way in the Kemayoran area. Selling new Jakarta governor has brought in some activity for Palazzo Kemayoran, which halted in changes to urban planning policy that were 2010, has now recommenced. Marketing has noted in the mid-term regional development commenced for The Mansion at Dukuh plan (RPJMD). It is understood that the Kemayoran, which was abandoned during the governor’s priority now, and over the next five 1998 crisis and subsequently acquired by years, is to endorse massive amounts of high- Agung Sedayu Group. The Royal Springhill, also rise residential development targeting Jakarta’s located in Kemayoran, is nearing the completion low-income segment by redeveloping the slum of its two additional towers, and is scheduled to area into a residential area with environmental finish in the 2015-2016 period. sustainability features. Further, in accommodating this low-income segment, the Meanwhile, in the Cempaka Putih area, there Jakarta government is demonstrating its focus are two apartment projects which are mixed- on building more low-cost rented apartments used developments including Holland Village for workers, equipped with facilities like fitness (developed by Lippo) and Sentosa Residence centers and improved public and green space. (developed by Bahama Group as a joint venture Therefore it is assumed that the issuing of new with Sentosa Worldwide Resorts). These permits for commercially built apartments will apartment projects have not officially been be in lower priority. launched, but they have already been introduced to their loyal customers.

strata-title apartment cumulative supply

140,000

120,000

100,000

80,000 Units 60,000

40,000

20,000

0 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD

Colliers International Indonesia - Research

p. 2 | Colliers International jakarta | 1q 2013 | apartment

NEW SUPPLY PIPELINE

Development sta- apartment name location region #unit tus 2013 East Park Apartment (Tower A) KRT Radjiman East Jakarta 550 Under Construction Green Palace Apartment (Tower V) Kalibata South Jakarta 630 Under Construction Ambassade Residence Tower A Puri Denpasar CBD 234 Under Construction Pancoran Riverside (Tanjung Kalibata) Pengadegan Timur South Jakarta 1,900 Under Construction Kebagusan City (Tower B) Kebagusan South Jakarta 548 Under Construction GP Plaza Gatot Subroto CBD 320 Under Construction Pasar Baru Mansion (2 Towers) Pasar Baru Central Jakarta 520 Under Construction Luxurious Raffles Residences Satrio CBD 64 Under Construction (The Tiffany) Antasari South Jakarta 240 Under Construction The East at Essence Complex Dharmawangsa Dharmawangsa South Jakarta 244 Under Construction My Home Apartment at 1 Satrio CBD 136 Under Construction Sentra Timur Residence (stage 2) 3 Towers Pulogebang East Jakarta 885 Under Construction Green Lake Sunter (Tower North) Sunter North Jakarta 876 Under Construction Green Central (Tower Cerberra) Gajah Mada West Jakarta 420 Under Construction Sunter Icon (2 Towers) Sunter North Jakarta 600 Under Construction The H Tower Rasuna Said CBD 9 Under Construction The Windsor (2 Towers) Puri Indah West Jakarta 340 Under Construction Titanium Square East Jakarta 725 Under Construction Pakubuwono Terrace (Tower I) South Jakarta 750 Under Construction Rusunami Delta (Tower D) Cakung East Jakarta 520 Under Construction Verde Apartment (Tower East) Rasuna Said CBD 114 Under Construction

2014 The Grove Rasuna Said CBD 438 Under Construction St Moritz (The New Royal Suite Tower) Puri Indah West Jakarta 196 Under Construction St Moritz (The New Ambassador Suite Tower) Puri Indah West Jakarta 200 Under Construction St Moritz (The New Presidential Suite Tower Puri Indah West Jakarta 200 Under Construction La Venue - South Tower South Jakarta 341 Under Construction The Grove Suite Rasuna Said CBD 151 Under Construction Kemang Village (The Intercontinental) Antasari South Jakarta 400 Under Construction Kemang Village (The Infinity) Antasari South Jakarta 175 Under Construction The Aspen at Admiralty Fatmawati South Jakarta 860 Under Construction Pakubuwono Terrace (Tower 2) Kebayoran Lama South Jakarta 720 Under Construction The Pakubuwono Signature Pakubuwono South Jakarta 188 Under Construction Sherwood Apartment (Richmond) North Jakarta 125 Under Construction Sherwood Apartment (Wellington) Kelapa Gading North Jakarta 100 Under Construction Sherwood Apartment (Regent) Kelapa Gading North Jakarta 100 Under Construction The H Residence MT Haryono East Jakarta 383 Under Construction Pluit Seaview (Tower Maldives) Pluit North Jakarta 940 Under Construction Sudirman Suites Sudirman CBD 380 Under Construction Senopati Penthouse Senopati South Jakarta 63 Under Construction Sky Terrace Lagoon West Jakarta 525 Under Construction continued

p. 3 | Colliers International jakarta | 1q 2013 | apartment

apartment name location region #unit Development status

continuation Senopati Penthouse Senopati South Jakarta 63 Under Construction Sky Terrace Lagoon Kalideres West Jakarta 525 Under Construction LA City Apartment (Tower A) Lenteng Agung South Jakarta 980 Under Construction Sky Garden (Tower 1) Setiabudi South Jakarta 426 Under Construction La Maison Barito (Tower 1) Barito South Jakarta 80 Under Construction Botanica Apartment (3 Towers) Simprug South Jakarta 626 Under Construction The Hive @Tamansari DI Panjaitan East Jakarta 422 Under Construction Signature Park Grande MT Haryono East Jakarta 1,100 Under Construction The Bellevue at Pondok Indah Pondok Indah South Jakarta 60 Under Construction Metro Park Residence West Jakarta 1,200 Under Construction Gading Greenhill Pegangsaan Dua North Jakarta 700 Under Construction Elpis Residence Gunung Sahari Central Jakarta 791 Under Construction Capitol Park Apartment (Tower T) Salemba Central Jakarta 727 Under Construction Capitol Park Apartment (Tower U) Salemba Central Jakarta 976 Under Construction Northern Residence Ancol North Jakarta 800 Under Construction The Mansion at Dukuh Golf Residence (Aurora Tower) Kemayoran Central Jakarta 522 Under Construction The Mansion at Dukuh Golf Residence (BellaVista Tower) Kemayoran Central Jakarta 612 Under Construction Casa Grande Residence (Montreal Tower) Casablanca CBD 313 Under Construction Casa Grande Residence (Montana Tower) Casablanca CBD 284 Under Construction (Bay View) Pluit North Jakarta 3,096 Under Construction

Colliers International Indonesia - Research

Demand During the first three months of 2013, the take- previous quarter’s 82.2%. Nevertheless, the up rate of all projects (including those currently take-up figure suggests a promising sign for the operating, those in the planning stages and apartment market, due to the fact that it has those under construction) was recorded at been above 80% since 2012. 83%, reflecting a slight increase from the

average take-up rates of strata-title apartments in jakarta

100%

80%

60% ates Up R

- 40%

T ake 20%

0% 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD

Colliers International Indonesia - Research

Colliers International | p. 4 jakarta | 1q 2013 | apartment

The completion of several apartment projects small in number, consumers who bought improved the buyer’s confidence. Most of the through mortgage financing from the bank newly completed projects had very good take- enjoyed a low interest rate. Further to this, up levels, with 80-90% of the total units being there are other practical reasons for the claimed and absorbed by the market. The increased sales in apartments including the strata-title apartment market should also see reduced travel-time to get to work and the an increase in sales growth, having benefited prestige associated with living in an apartment; from high discounts for cash payments and this is true particularly for those located longer cash installment payment periods downtown. offered by developers. On the other hand, albeit

average take-up comparison q-o-q

rEGION 4Q 2012 1Q 2013 QoQ CBD 87.7% 88.2% South Jakarta 86.1% 87.8% Outside CBD 79.2% 80.3%

Colliers International Indonesia - Research

pre-sales of planned and under-construction projects Developers with good track records are enjoying recurring rental income and/or capital good sales performance with the projects they appreciation. Most of the projects currently have under way. Certain locations in the CBD, under construction in the premium locations and areas in South Jakarta particularly, are claimed more that more than 60% absorption showing a high absorption level such as rate. Meanwhile, new projects beyond the CBD Setiabudi, Senopati, Pakubuwono and Pondok area are quite abundant, as many future projects Indah, because their locations have been are still experiencing difficulties selling units. favored by expatriates. Premium addresses like Take-up rates for apartments under construction Pondok Indah, Gandaria, Senopati, Pakubuwono, beyond the CBD area are sluggish compared to Simprug and Permata Hijau remain the most the previous quarter. With a large supply of preferred locations for luxury apartments. Most mostly mid-low segment apartment units, of the apartment developments emphasize the competition for projects located beyond the ‘green’ concept, as well as high building CBD area is likely to tighten as each project standards. In general, South Jakarta is still a tries to generate more sales by offering favorable location for either a second home or attractive concepts and more facilities. as an investment for those who anticipate

absorption rates of planned and under construction projects

rEGION 4Q 2012 1Q 2013 QoQ CBD 77.9% 79.4% South Jakarta 76.2% 79.1% Outside CBD 65.8% 62.8%

Colliers International Indonesia - Research

The high level of apartment enquiries in Jakarta booking fee. Furthermore, it is fully refundable has translated into creative sales strategies. if the costumer is not satisfied with, or did not One of them is auctioning apartments on the get, the preferred unit. With Chinese New Year day of the launch which enables buyers to falling during 1Q 2013, an increased number of choose the best units in apartment tower. promotions have been offered including Further, several developers offer a pre-launch financing incentives like longer cash installment booking scheme which encourages costumers periods (from 30 to 36 months) with zero to buy more than one apartment unit. The interest, bigger discounts of up to 30%, and promotion asks costumers to take a queue various other benefits such as lucky angpao, number (priority pass) for the best unit at their gold rewards and grand prizes including cars. best price, by only paying IDR5-15 million as a

p. 5 | Colliers International jakarta | 1q 2013 | apartment

Price Average asking prices for strata-title apartments Jakarta area (8.4% QoQ) was mainly triggered have continued to demonstrate an upward by the commencement of several good projects trend. Given the relatively high sales rate for in premium locations, such as Senopati, ongoing apartment projects, the overall Dharmawangsa, Pakubuwono, Permata Hijau apartment market witnessed somewhat higher and Pondok Indah. This quarter, the average asking prices, from an average of IDR19.6 to asking price in South Jakarta was registered at IDR21.0 million per sq m during the quarter. IDR22.45 million per sq m. Meanwhile, areas With its limited number of projects and available beyond the CBD recorded an increase of 4.4% units, as well as continuing construction activity, QoQ to IDR16.35 million per sq m. Overall, the the CBD managed to maintain a higher price average asking price of apartments in Jakarta increase on a QoQ basis, at 9.4%. On the other increased by 7.8% QoQ, up by 16% YoY. hand, the increase in asking price in the South

average asking price in different sub markets

area 4Q 2012 1Q 2013 Qoq CBD IDR 29,817,081 IDR 32,619,752 9.4% South Jakarta IDR 20,717,032 IDR 22,455,876 8.4% Outside CBD IDR 15,656,812 IDR 16,350,089 4.4% Average IDR 19,572,483 IDR 21,097,121 7.8%

Colliers International Indonesia - Research

average asking price based on sub markets

35,000,000

30,000,000

25,000,000

20,000,000 p/sq m R 15,000,000

10,000,000

5,000,000 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

CBD South Jakarta Non CBD Average

Colliers International Indonesia - Research

The scarcity of land in Jakarta, particularly in positive economic outlook. As such, new the CBD and a few areas in South Jakarta, has apartments located in the CBD and South caused land prices to increase, which has led to Jakarta will continue to adjust the overall rises in the costs associated with apartment market price because price is potentially developments. Nevertheless, the confidence to corrected along with sale progress for ongoing increase selling prices has remained stable, developments. with the support of external factors like the

Colliers International | p. 6 jakarta | 1q 2013 | apartment

Apartment For Supply There is currently a declining supply of serviced decrease (by 0.5%), compared to the previous Lease apartments from the Kempinski Serviced quarter. Overall, the cumulative supply of Residence, due to the conversion of 40 units apartments for lease in Jakarta decreased from serviced apartments to private residences, modestly to 8,206 units (comprising 56.6% (Serviced and and therefore at the end of March 2013, the serviced apartments and 43.4% non-serviced total cumulative supply (of both serviced and apartments). Non-serviced) non-serviced apartments) experienced a minor

composition of apartments for lease in jakarta

Non - Serviced 43.44%

Serviced 56.56%

Colliers International Indonesia - Research

There are, however, two serviced apartment Suites Kuningan, which is part of the Ciputra projects in the pipeline, including Fraser World Jakarta II mixed-used development, and Residence and Ascott Kuningan Fraser Place Setiabudi; both are Fraser Jakarta, comprising 128 and 170 units Hospitality developments providing a total of respectively. These projects will come on line 350 units which are expected to be completed sometime in 2013. Further, there are two more in 2014. projects located in the CBD including Fraser

LIST OF future APARTMENTs for lease (serviced) projects

projected apartment name location region #units operation Fraser Residence Menteng Menteng Central Jakarta 3Q 2013 128 Ascott Kuningan Jakarta Satrio CBD 4Q 2013 170 Fraser Suites Kuningan Satrio CBD 2014 200 Fraser Place Setiabudi Setiabudi CBD 2014 150

Colliers International Indonesia - Research

Colliers International | p. 7 jakarta | 1q 2013 | apartment

Occupancy The apartment market during 1Q 2013 softened Apart from that, the increasing rental rates as indicated by the declining rate for all rental affected the downturn in the occupancy rate of apartment sub-sectors (i.e. serviced and non- some non-serviced apartments, particularly serviced apartments). Lease expiry and those that have aged. In general, the occupancy completed employment contracts are two level of apartments for lease (serviced and factors that have affected the declining non-serviced) decreased by almost 2% QoQ, to occupancy rates at the beginning of the year. an average of 76.6%.

average occupancy for lease apartment

100%

80%

ate 60%

40% ccupancy R

O 20%

0% 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD

Colliers International Indonesia - Research

occupancy for serviced apartment

rEGION 4Q 2012 1Q 2013 qoq CBD 84.55% 77.12% -7.44% South Jakarta 87.10% 84.29% -2.81% Outside CBD 61.36% 60.65% -0.71%

Colliers International Indonesia - Research

occupancy for non-serviced apartment

rEGION 4Q 2012 1Q 2013 qoq CBD 80.65% 80.47% -0.91% South Jakarta 79.72% 78.82% -0.90% Outside CBD 75.96% 75.84% -0.12%

Colliers International Indonesia - Research

occupancy based on apartment type

type 4Q 2012 1Q 2013 qoq Serviced 78.16% 77.79% -0.37% Non-Serviced 79.53% 74.05% -5.48%

Colliers International Indonesia - Research

Colliers International | p. 8 jakarta | 1q 2013 | apartment

During the reviewed period, the occupancy Apart from leasing conditions, as mentioned level for non-serviced apartments declined before, the reduced occupancy rate in serviced modestly by 0.37% QoQ, while for serviced apartments in the CBD was due mainly to both apartments it dropped by 5.5%, compared to the termination of Kempinski Serviced previous quarter’s 79.53%. As shown in the Apartments (which always maintained high table above, occupancy for serviced apartments occupancy levels), and renovation works at significantly dropped in the CBD by 7.44%. Ascott Serviced Apartments.

Rental Rates Significant changes were noted in rental rates Stronger leasing activity in serviced apartments, during the first three months of 2013. Modest particularly those which are operated by growth was seen in all sub-sectors, but most international brands, has given impact to significant was serviced apartments located in adjusting to higher rental growth. Nonetheless, the CBD. Overall, the average asking rents of few landlords maintained their current rates apartments for lease in the CBD was registered and were reluctant to increase them in order to at US$26.34 per sq m per month, which retain current tenants. Increasing rents were increased by 11.21% QoQ, or 10.29% YoY. mostly found in newer projects which enjoyed Apartments for lease beyond the CBD (including higher occupancy rates and provided better South Jakarta) registered at US$15.4 per sq m quality buildings. per month, which increased by 4.26% QoQ, or 3.58% YoY.

average rental rates for apartment for lease

$30.00

$25.00

$20.00

$15.00 ate/sq m/month ate/sq $10.00

ental R ental $5.00 R

$0.00 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

CBD Non CBD

Colliers International Indonesia - Research

summary of average rental rates (USD/sq m/month) by region

rEGION 4Q 2012 1Q 2013 CBD $23.69 $26.34 Outside CBD $14.77 $15.40

Colliers International Indonesia - Research

The growing demand is not the only factor tariffs and the regional minimum wage, as well influencing the rental rates for lease apartments as inflation, are also more or less contributing in Jakarta however. Increases in electricity to the adjustment of rental rates.

Colliers International | p. 9 jakarta | 1q 2013 | industrial estate

Outlook 482 offices in The apartment market continues to benefit The occupancy rate for apartments for lease is from steady economic growth, which is projected to rise further, in line with expectations 62 countries on projected to peak at around 6% for 2013. of increased expatriate arrival to harness Another encouraging factor is the growing business opportunities in Jakarta. Demand for 6 continents middle-income group, which potentially creates serviced apartments is expected to trend United States: 140 a new market for apartments. Apart from these upwards. Nevertheless, as most existing rental Canada: 42 factors, the increasing price trend has been apartments in Jakarta are aging developments, Latin America: 20 propelled by the scarcity of land, particularly in there has been much opportunity for developers Asia Pacific: 195 the CBD and several prime locations in South to build apartments or strata-title apartments EMEA: 85 Jakarta. that can be operated as serviced apartments • $2 billion in annual revenue (condotel), primarily those managed by • 103.6 square meter under management international hotel operators, located within or • near the CBD. Over 13,500 professionals

COLLIERS INTERNATIONAL INDONESIA: World Trade Centre 10th & 14th floor Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 FAX 62 21 521 1411

Michael Broomell Managing Director World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 FAX 62 21 521 1411

Ferry Salanto Associate Director, Research World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 FAX 62 21 521 1411 Email: [email protected]

Copyright 2012 Colliers International

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inac- curacies. Readers are encouraged to consult their pro- fessional advisors prior to acting on any of the material contained in this report.

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