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Research & Forecast Report

Apartment for Strata-titleSupply By the end of 1Q 2014, the cumulative supply of strata-title apartments in Jakarta grew at a moderate pace. The market received 1,246 new units, up by 0.9% QoQ, from the hand-over of several projects like Kemang Village (The Infinity Tower), Pakubuwono Terrace (North Tower), Sherwood Apartment (Wellington Tower) and Woodland Park (Matoa Tower). These 1,246 units, or 7.27% of the total projected 20,889 units that will be completed this year, are scattered in South and North Jakarta. The Infinity Tower is the fifth tower being handed over out of a total of seven towers at Kemang Village Residences. The Pakubuwono Terrace (North Tower) and Woodland Park (Matoa Tower) are brand new projects that are expecting to see more new towers in the next few years. In North Jakarta, Sherwood Residence, located in the Kelapa Gading area, had a new tower

completed during the quarter, called Wellington Tower. This project is considered one of the upper-class developments in that area.

Not all apartment projects are completed at the scheduled time. Some experience slow finishing work and are likely to be rescheduled to 2Q or even 3Q 2014.

The outlook for 2014 was predicted to be tough, particularly given the nationwide elections that could impact business decisions. The Central Bank’s policy to increase its benchmark interest rate and the minimum loan-to-value (LTV) caps for housing loans from 80 to 70%, and 60% for second mortgage loans, and 50% for third mortgage loans has dampened property acquisition. In addition, banks are restricted from extending loans used as down payments for home purchases. These measures are expected to reduce demand on residential properties for investment or speculation, instilling more prudent lending and a common prudential standard among banks.

“The strong sales performance of under-construction apartment projects continued to trigger increases in the average asking price to IDR24.4 million / sq m or a 2.5% increase q-o-q. The CBD fetched the highest average price at IDR 38.3 million / sq m, an increase of 5.8% q-o-q while the average price in South Jakarta was registered at IDR 26.7 million / sq m, which grew by 3.2% from the last quarter. Not only price, but the average gross rental rate of apartments for lease located in the CBD and South Jakarta also trended upward by 3.4% compared to the previous quarter in anticipation of the increase in the operational costs and was recorded at USD26.56 / sq m/month.”

- Ferry Salanto, Associate Director | Research

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2 Research & Forecast Report | 1Q 2014 | Apartment | Colliers International

Source: Colliers International Indonesia - Research

List of Completed Projecs During 1Q 2014development location region developer no. of Units latest offering

price per sq m

Kemang Village (The Infinity) P. Antasari South Jakarta Lippo Karawaci 175 IDR30 million

Pakubuwono Terrace (Tower North) Kebayoran Lama South Jakarta PT Selaras Mitra Sejati 750 IDR15 million

Sherwood Apartment (Wellington) Kelapa Gading North Jakarta Summarecon 100 IDR22 million

Woodland Park (Matoa tower) Kalibata South Jakarta Group Kalibata 221 IDR16 million

Nevertheless, the abovementioned condition did not stop developers from launching new projects, as was seen in the first quarter of 2014. In fact, there are 14 newly launched projects scattered in four areas of Jakarta including the CBD, East Jakarta, South Jakarta, and West Jakarta. From the total of 5,286 new apartment units, South Jakarta contributes the largest at 41.5%, followed by West Jakarta at 36%, while the CBD area contributes only 22.5% from three apartment projects. These new projects are expected to be completed in the next two or four years. Some projects will have more than two towers that will be built in stages and therefore the completion time will take more than two years. The South Jakarta and West Jakarta areas are expecting to see abundant apartment projects over the next three to four years.

Some of the projects in South Jakarta are located in expatriate community locations, like Pondok Indah and Pangeran Antasari and therefore quote high prices compared to other non-prime locations like Pasar Minggu, Pejaten and Kebayoran Lama. Most of the projects in West Jakarta aim at the mid-low segment, characterised by a large number of units at a project and a relatively affordable price. Some projects in good locations are offered at higher prices. West Jakarta has been seeing many ongoing property developments including offices, apartments, and shopping centres. Underpinned by good infrastructure, like the toll roads connecting the area to the airport, West Jakarta continues to appeal to property investors.


Newly Launched* Apartments During 1Q 2014development location region no. of Units expected completion

timeasking price

per sq m

Verde Two (2 Towers) Rasuna Said CBD 304 2016 IDR37 million

Anandamaya Residence (3 Towers) Sudirman CBD 500 2017 IDR50 million

Gayanti City Apartment (Tower I) Gatot Subroto CBD 198 2016 IDR33 million

Domaine (Tower I) Sudirman CBD 186 2017 IDR38 million

Bellevue Place Apartment MT Haryono South Jakarta 128 2016 IDR31 million

Kebayoran Icon Kebayoran Lama South Jakarta 256 2016 IDR19 million

One Otium Antasari South Jakarta 160 2017 IDR30 million

Kartika Residence (3 Towers) Pondok Indah South Jakarta 800 2018 IDR40 million

Foresque Apartment (3 Towers) Pasar Minggu South Jakarta 650 2017 IDR16 million

The Batik @ Pejaten Pejaten South Jakarta 200 2017 IDR15 million

Maqna Residence Meruya West Jakarta 380 2017 IDR17 million

Vittoria Residence (3 Towers) Daan Mogot West Jakarta 1,100 2017 IDR14 million

Wang Residence Kedoya West Jakarta 250 2017 IDR27 million

Veranda Kembangan West Jakarta 174 2016 IDR19 million

Note: * Newly Launched is when a new apartment development has secured development permit and is only officially introduced and offered in the market.





The Distribution of Newly Launched Apartment by Number of Units


Supply of new apartment units during 2014 will be substantial, i.e. 20,889 units, and will continue in 2015 when the market is expected to see another 24,228 units. All in all, the total of apartments projected to come onto the market from 2014 - 2017 will be 62,197 new units, mainly supplied by West Jakarta with 22.4% of the total supply, followed by Central and South Jakarta with 20.4 and 20.2%, respectively.

New Supply Pipeline (2014 - 2017)apartment name location region no. of Units

2014

Woodland Park (Matoa tower) (1Q) Kalibata South Jakarta 221

Pakubuwono Terrace (Tower North) (1Q) Kebayoran Lama South Jakarta 750

Sherwood Residence (Wellington) (1Q) Kelapa Gading North Jakarta 100

Kemang Village (The Infinity) (1Q) Antasari South Jakarta 175

Ambassade Residence Tower A Puri Denpasar CBD 234

Raffles Residences Satrio CBD 64

MyHome Apartment at Ciputra World Satrio CBD 136

Setiabudi Sky Garden (tower 1) Rasuna Said CBD 426

Verde Apartment (Tower East) Rasuna Said CBD 114

Pasar Baru Mansion (2 towers) Pasar Baru Central Jakarta 520

Elpis Residence Gunung Sahari Central Jakarta 791

Capitol Park Apartment Salemba Central Jakarta 1,700

The Mansion at Dukuh Golf Residence (Aurora Tower) Kemayoran Central Jakarta 522

The Mansion at Dukuh Golf Residence (BellaVista Tower) Kemayoran Central Jakarta 612

The Green Pramuka (Tower Chrysant) Pramuka Central Jakarta 1,000

The Green Pramuka (Tower Bougenville) Pramuka Central Jakarta 1,000

Sentra Timur Residence II (2 Towers) Pasar Rebo East Jakarta 810

Titanium Square Pulo Gebang East Jakarta 725

The Hive @ Tamansari Cawang East Jakarta 422

Sherwood Residence (Regent) Kelapa Gading North Jakarta 100

Pluit Seaview (Tower Maldives) Pluit North Jakarta 940

Gading Greenhill Pegangsaan Dua North Jakarta 700

Northern Ancol Residence Ancol North Jakarta 800

La Venue - South Tower Pasar Minggu South Jakarta 341

Kemang Village (The Intercon) Antasari South Jakarta 400

The East at Essense Complex Dharmawangsa Dharmawangsa South Jakarta 244

continued

South Jakarta41.5%

West Jakarta36.0%

CBD22.5%





apartment name location region no. of Units

continuation

The Aspen at Admiralty Fatmawati South Jakarta 860

Pakubuwono Terrace (Tower South) Kebayoran Lama South Jakarta 720

The Pakubuwono Signature Pakubuwono South Jakarta 188

Senopati Penthouse Senopati South Jakarta 63

LA City Apartment (Tower A) Lenteng Agung South Jakarta 980

La Maison Barito Barito South Jakarta 80

Botanica Apartment (3 Towers) Simprug South Jakarta 626

The Bellevue at Pondok Indah Pondok Indah South Jakarta 40

Green Central Tower Cerberra Gajah Mada West Jakarta 420

The Windsor (Tower I) Puri Indah West Jakarta 176

The Windsor (Tower II) Puri Indah West Jakarta 164

Sky Terrace Lagoon Kalideres West Jakarta 525

Metro Park Residence Kebon Jeruk West Jakarta 1,200

Green Palm Residence @ Puri Kosambi West Jakarta 1,000

2015

East Park Apartment (Tower C) KRT Radjiman East Jakarta 550

The Residence (CWJ 2) Satrio CBD 119

The Orchad Satrio (CWJ 2) Satrio CBD 349

Setiabudi Sky Garden (tower 2) Setiabudi CBD 160

The Suite (W Hotel Tower) Satrio CBD 200

T - Plaza Residence (Tower B) Pejompongan Central Jakarta 500

Menteng Park Cikini Central Jakarta 756

The Grreen Pramuka (Tower Orchid) Pramuka Central Jakarta 1,000

The Grreen Pramuka (Tower Penelope) Pramuka Central Jakarta 1,000

The Green Pramuka (Tower Scarlet) Pramuka Central Jakarta 1,000

Eastonia Jatiwaringin East Jakarta 312

Green Signature Apartment MT. Haryono East Jakarta 800

Bassura City (Tower Flamboyan) Basuki Rahmat East Jakarta 1,000

Bassura City (Tower Edelweiss) Basuki Rahmat East Jakarta 1,000

Bassura City (Tower Dahlia) Basuki Rahmat East Jakarta 1,000

Bassura City (Tower Cattleya) Basuki Rahmat East Jakarta 600

Bassura City (Tower Alamanda) Basuki Rahmat East Jakarta 600

Teluk Intan (Tower Saphire) Teluk Gong North Jakarta 1,100

Tifolia Apartment Perintis Kemerdekaan North Jakarta 500

Pluit Seaview (Tower Belize) Pluit North Jakarta 300

Callia Apartment Perintis Kemerdekaan North Jakarta 560

The Oakwood Sky Garden (2 Towers) Pluit North Jakarta 700

Pluit Seaview (Tower Ibiza) Pluit West Jakarta 500

Pluit Seaview (Tower Bahama) Pluit South Jakarta 650

Green Bay Pluit (Sea View) Pluit North Jakarta 2,072

Kemang Village - The Bloomington Antasari South Jakarta 150

The Royal Olive Residence Tower I Buncit Raya South Jakarta 225

Woodland Park (Cendana Tower) Kalibata South Jakarta 218

Senopati Suites 2 Senopati South Jakarta 81

1 Park Avenue Gandaria South Jakarta 279

Nine Residence Warung Buncit South Jakarta 246

Providence Park Permata Hijau South Jakarta 114

continued






continuation

Kencana Residence Pondok Indah South Jakarta 173

District 8 (Tower Eternity) Senopati South Jakarta 400

District 8 (Tower Infinity) Senopati South Jakarta 280

Izzara Apartment (2 Tower @ 225 unit) TB. Simatupang South Jakarta 450

Lexington Rersidence (Tower 1) Pondok Pinang South Jakarta 270

Lexington Rersidence (Tower 2) Pondok Pinang South Jakarta 270

The Aspen Peak at Admiralty Fatmawati South Jakarta 644

Belmont Residence (Tower Montblanc) Meruya Ilir West Jakarta 350

Gianetti Apartment Kemanggisan West Jakarta 500

St. Moritz (New Presidential Tower) Puri Indah West Jakarta 150

Satu8 Residence Kedoya West Jakarta 174

The Nest Apartment Meruya Utara West Jakarta 1,100

Point 8 (Air Crew Tower) Daan Mogot West Jakarta 546

Gallery West Kebon Jeruk West Jakarta 280

2016

St Moritz (The New Ambassador Suite Tower) Puri Indah West Jakarta 200

The H Residence MT Haryono East Jakarta 383

Sudirman Suites Sudirman CBD 380

Senopati Suites 3 Senopati South Jakarta 54

Signature Park Grande MT Haryono East Jakarta 1,100

Grand Pakubuwono Terrace Kebayoran Lama South Jakarta 435

Sentosa Residence Cempaka Putih Central Jakarta 687

Gold Coast Apartment (Atlantic Tower) Pantai Indah Kapuk North Jakarta 568

Grand Pancoran Pancoran South Jakarta 120

Sudirman Hill Residence Karet Central Jakarta 255

Apartment Pejaten Park Residence Warung Buncit South Jakarta 380

Belmont Residence (TowerAthena) Meruya West Jakarta 165

Four Winds Permata Hijau South Jakarta 122

Capitol Suites Prapatan Raya Central Jakarta 327

Puri Mansion Apartment (Tower A) Puri Kembangan West Jakarta 900

Madison Park Tanjung Duren West Jakarta 1,200

Gayanti City (2 Towers) Gatot Subroto CBD 318

Verde Two (Tower 1) Rasuna Said CBD 152

Verde Two (Tower 2) Rasuna Said CBD 152

Bellevue Place Tebet South Jakarta 128

Kebayoran Icon Kebayoran Lama South Jakarta 256

Veranda Pesanggrahan West Jakarta 174

2017

Regatta London Tower Pantai Mutiara North Jakarta 276

Central 88 (2 Towers) Kemayoran Central Jakarta 612

Holland Village Cempaka Putih Central Jakarta 400

Domaine Sudirman CBD 186

Rosewood Residences Satrio CBD 160

Skyline Residence (2 Towers) DI Panjaitan East Jakarta 481

Kemang Penthouse Kemang South Jakarta 262

The Foresque Pasar Minggu South Jakarta 600

continued





Overall, the take-up rate in Jakarta demonstrated an increasing trend with the exception of the CBD area that posted a moderate decrease compared to the previous quarter. With abundant new projects during the quarter but mediocre absorption, the CBD area saw a downswing in the take-up rate trend, by 4% QoQ. South Jakarta and non-prime areas continued to show an upward trend, due to some on-going projects showing progressive construction activities and offering a relatively affordable price compared to the CBD area. Several newly launched projects in middle- to upper-class locations, such as Menteng, Pejaten, Puri Indah, Kemang and Pondok Indah, applied NUP (nomor unit pemesanan or an offer to book a reserved unit) due to high demand within those areas. This way, developers will disseminate NUP to their loyal customers and other potential buyers who can choose good units (usually located on a preferred floor or with the best view, etc.). Interested buyers will then have to deposit a certain amount of money (ranging from IDR20 to 50 million, depending on the class of the apartment) to get the priority to book the desired units.

The Menteng, Pejaten, Puri Indah, Kemang and Pondok Indah areas are popular residential areas (except for Puri Indah) for Jakarta’s expatriate community as they are surrounded by supporting facilities like modern malls, international schools, different chains of supermarkets and other service establishments.

There were several promotional programmes offered during the first quarter benefiting the moments like Chinese New Year and Valentine. Other promotional campaigns to entice buyers are nothing special and continue to copy previous promotions like free holidays to Bali, gold rewards, electronic gadgets or furniture to furnish the apartment units.


continuation

Puri Orchad (3 Tower) Kembangan West Jakarta 3,000

The Langham Residences Senopati South Jakarta 57

Anandamaya Residences (3 towers) Sudirman CBD 500

Maqna Residence Meruya West Jakarta 380

Vittoria Residence (3 tower) Daan Mogot West Jakarta 1,100

One Otium Residence Antasari South Jakarta 160

Wang Residence Kedoya West Jakarta 250

The Batik @ Pejaten Pejaten South Jakarta 200


0

5,000

10,000

15,000

20,000

25,000

30,000

2014F 2015F 2016F 2017F

CBD Central Jakarta South Jakarta

North Jakarta East Jakarta West Jakarta

Distribution of Future Annual Apartment Unit Supply by Area


DemandUp until March 2014, sales activity in the Jakarta apartment market remain stable. The take-up rate of existing strata-title apartments in Jakarta reached 94.3%, up by 1% while the pre-sales activities from the on-going projects recorded a 72.6% take-up rate, falling by 1.5% from the previous quarter. The substantial newly launched apartment supply in 1Q 2014 has reduced the take-up figure of pre-sales apartments this quarter, however continued absorption of the new units has maintained a relatively healthy take-up rate. In general, the overall take-up rate for both existing apartments and pre-sales apartments was steady at 86.1%.


Average Take-Up Rate Performance in Different Location (%)

area 1q 2013 4q 2013 1q 2014 qoq change YoY change

CBD 88.2% 97.1% 93.2% -3.9% 5.0%

South Jakarta 87.8% 88.9% 90.0% 1.1% 2.2%

Non-Prime Area 80.3% 83.1% 83.3% 0.2% 3.0%





Asking PriceStrata-title apartment prices continue to trend upward along with the escalation of land prices and the construction progress of the projects. As of 1Q 2014, the average price of strata-title apartments in Jakarta was IDR24.4 million per sq m an increase of 2.45% compared to the previous quarter. Overall, the average asking price in the apartment market in Jakarta has increased by 46% in three years. Particularly in the CBD area, in the same period, apartment prices have appreciated by 75%, while in South Jakarta it was 60%.

Average Asking Price (per sq m) of Apartments in Jakarta


Preferred Payment Method for Apartment Buyer


The combination of a hike in the key interest rate, stricter mortgage regulations and wavering consumer confidence has led to widespread speculation that the property market is headed for a plateau and will affect the slowing demand for apartments. In fact, developers have always found ways to accelerate sales, among them providing flexibility in terms of payment. Various payment schemes were offered by developers to maintain sales activity at a good pace. Such payment schemes enable buyers who have limited access to banking and who are buying a home for the second or third time. Some strategies that are used by developers to lure buyers are:

» Flexible down payment scheme. The amount of down payment of 30 to 50% of the total apartment price can be paid by instalment from 12 to 35 times directly to the developers. The remaining payment is paid upon the construction of the project through mortgage (KPA : Kredit Pemilikan Apartemen);

» Cash instalment. Conventionally, the duration of instalments is the same as the construction progress of the development, i.e. 24 to 36 instalments;

» Long instalment. This payment scheme has a longer duration than cash instalment and can be applied after the construction is done. Similar to cash instalment, buyers have to pay monthly up to 60 times (5 years) directly to the developer. Consequently, the price for this payment method is higher than the normal price, i.e. 15 to 20% more expensive;

» Hard cash scheme. Full payment at one time. Typically the developer will give a special discount of around 10 to 15% off the published rate.

Colliers’ survey of payment methods chosen by apartment buyers was conducted in 40 apartment projects under construction. This revealed that cash instalment payment was opted for by most buyers even in mid-low apartment projects. Only 5 to 20% of buyers of mid-low apartment units use a mortgage facility. Most of the buyers in this segment pay cash instalments. Similarly, in the middle segment, the majority of buyers chose cash instalment payments. However, we still see that in several projects most buyers opted for bank financing instead of cash instalments. In the upper-class segment, again, cash instalments was preferred by most buyers, but interestingly, the portion of those paying hard cash was also quite significant.

Banks are more prudent in financing apartment unit ownership, particularly when the construction progress is slow. In some cases, developers will direct buyers to pay cash instalments, particularly for the off-plan projects. On the other hand, buyers for investment will pay cash instalments during construction, primarily if they are not the first buyer of apartment unit because the new LTV regulations require a higher percentage of down payment for a second purchase. Those with cash capability will find paying by cash instalments less of a hassle.

KPA (mortgage)

16%

Hard Cash21%

Cash Installment

63%

IDR 0

IDR 5,000,000

IDR 10,000,000

IDR 15,000,000

IDR 20,000,000

IDR 25,000,000

IDR 30,000,000

IDR 35,000,000

IDR 40,000,000

IDR 45,000,000

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

2Q20

12

3Q20

12

4Q20

12

1Q20

13

2Q20

13

3Q20

13

4Q20

13

1Q20

14

CBD South Jakarta Non-Prime Area Average





Apartment for LeaseSupplyThere was eventually one serviced apartment project completed in 1Q 2014 after a dormant situation for the last four consecutive quarters. The only apartment for lease this quarter is Fraser Residence Menteng, featuring 128 serviced apartments comprised of studio to duplex penthouse units. The opening of Fraser Residence Menteng brought the total supply of Jakarta’s apartments for lease to 8,334 units, comprising 57% serviced apartments and 43% non-serviced apartments.

Fraser Residence Menteng is part of Fraser’s global network of serviced residences and is the second development by Fraser after Fraser Residence Sudirman, which opened in June 2011. In the next two years, the group is on course to manage two more developments in Jakarta, including Fraser Place Setiabudi (2015) and Fraser Suites Kuningan (2016).

In fact, Frasers Hospitality and Ascott Limited are two worldwide serviced apartment operators that are very active in Jakarta. Frasers Hospitality will have four properties in operation in the CBD area, while Ascott Limited will have a total of five properties scattered around the CBD and South Jakarta in the next two years. Ascott Limited operates the four-star equivalent Somerset Serviced Residence and five-star equivalent Ascott The Residence brands. Fraser Hospitality operates Fraser Place and Residences in the same categories. All four products are found in city or business locations and have fully equipped kitchens (or kitchenettes), laundry and reception facilities.

Overall, the CBD area fetched the highest average asking price of IDR38 million psm as well as the highest increment of 5.8% QoQ. Land scarcity in the CBD area was the main driving force for apartment prices in this area to accelerate quickly. The newly launched projects in the CBD area, which mostly provide better building quality, use more imported materials, and offer a private residential concept are offered at a minimum of IDR33 million per sq m to a maximum of IDR60 million per sqm. The under-construction projects are quoted from IDR42 to 65 million psm. This high offering price occurred because all new projects located in the CBD area are classified as upper to luxury class apartments. In other areas, like South Jakarta, which still have adequate vacant land to be developed, a moderate growth of 3.2% in prices occurred, which brought the average price for the region to IDR26.7 million per sq m. The key triggers for the price increase were some factors like the commencement of several good projects in well-established locations, such as Kemang, Permata Hijau, and Pondok Indah as well as continuing progress of the under-construction projects. Apart from those premium areas in South Jakarta, there are some new apartment projects in areas like Mampang, Kebayoran Lama, and Pasar Minggu that introduced prices below the average market, ranging from IDR17 to 20 million per sq m and targeting the mid-low to mid-upper segment. In the interim, non-prime areas including West Jakarta, North Jakarta, East Jakarta and Central Jakarta, recorded an increase of 2.8% to IDR18.8 million per sq m. There are some factors that led to the increase in prices, like the good sales performance showed by ongoing projects and the added value that the apartment projects offer like good building materials and more facilities different from other developments.


Average Asking Price in Different Sub-Markets (in IDR)

area 1q 2013 4q 2013 1q 2014YoY

change

qoq

change

CBD 32,619,752 36,174,524 38,282,223 17% 5.8%

South Jakarta 22,455,876 25,854,554 26,687,843 19% 3.2%

Non-Prime Area 16,350,089 18,298,766 18,819,110 15% 2.8%


List of Apartments Operated by Frasers Hospitality and Ascott Limitedname of development Year of operation operator location tYpe

The Ascott Residence 1995 Ascott Limited Jl. Kebon Kacang Serviced Apartment

Somerset Grand Citra 1996 Ascott Limited Jl. Prof Dr Satrio Serviced Apartment

Countrywoods Residence 1996 Ascott Limited Jl. WR Supratman, Ciputat Serviced Apartment

Somerset Berlian 2006 Ascott Limited Jl. Permata Berlian 3 Serviced Apartment

Fraser Residence Sudirman 2011 Frasers Hospitality Jl. Setiabudi Raya No. 9 Serviced Apartment

Citadines Rasuna Jakarta 2013 Ascott Limited Jl. H.R. Rasuna Said Kav.20 Condotel

Fraser Residence Menteng 2014 Frasers Hospitality Jl. Menteng Raya Serviced Apartment

Ascott Kuningan Jakarta 2014 Ascott Limited Jl. Prof Dr Satrio Serviced Apartment

Fraser Place at Setiabudi Sky Garden 2015 Frasers Hospitality Jl. Karbela Selatan Serviced Apartment

Somerset Kencana Jakarta 2015 Ascott Limited Jl. KHM Syafi'I Hadzami Condotel

Fraser Suites at Ciputra World Jakarta 2 2016 Frasers Hospitality Jl. Prof Dr Satrio Serviced Apartment





In addition to those international operators, there are some active local serviced apartment operators like Aditya Mansion, Sultan Residence, Pondok Indah Golf, and Kemang Oktroi. There will be one serviced apartment project in Cilandak - South Jakarta, which is expected to open in 4Q 2014.

This project, called TBS Linera Serviced Apartments, has yet to decide the number of units to be released to the market. The owner of this project is a local operator who has experience in developing townhouses as well as housing complexes for expatriates.


List of Apartments Developments in the Futurename of development Year of operation location region no. of Units

TBS Linera Apartment Service 2014 Jl. Intan No. 25 Cilandak Barat South Jakarta TBA *

Ascott Kuningan Jakarta 2014 Jl. Prof Dr Satrio CBD 170

Fraser Place at Setiabudi Sky Garden 2015 Jl. Karbela Selatan CBD 150

One Park Avenue 2015 Jl. KHM Syafi'I Hadzami Sout Jakarta 60

La Maison Barito Serviced Apartment 2015 Jl. Barito Sout Jakarta 80

Oakwood at District 8 Senopati 2016 Senopati Sout Jakarta 180

Fraser Suites at Ciputra World Jakarta 2 2016 Jl. Prof. Dr. Satrio CBD 200

Note: *TBA: to be announced

OccupancyIn general, the apartment for lease market in Jakarta saw a minor drop in the occupancy rate from 76.6 to 75.8% this quarter. The occupancy level for non-serviced apartments was steady from the previous quarter at 78.4%, while the serviced apartment projects eased moderately from 72.7% last quarter to 70.5% as some projects reported that a number of their existing expatriate tenants had completed their employment contracts and had to leave the country.


Occupancy Level of Non-Serviced Apartments (%)area 4q 2013 1q 2014 qoq change

CBD 82.37% 84.07% 1.70%

South Jakarta 79.02% 78.05% -0.96%

Non-Prime Area 75.99% 75.86% -0.13%


Occupancy Level of Serviced Apartments (%)area 4q 2013 1q 2014 qoq change

CBD 79.00% 78.84% -0.16%

South Jakarta 77.01% 76.12% -0.89%

Non-Prime Area 56.44% 51.88% -4.56%

mining) are considering purchasing a certain amount of strata-title apartment units for their expatriate base (generally the engineer level). Instead of renting serviced apartments, owning the strata-title apartment units will be more beneficial for the company as the asset value is expected to grow.

Rental RatesOverall, the asking rental rate of apartments for lease increased during the early part of 1Q 2014 in anticipation of the increase in utility tariffs, especially electricity. The increase in the rental rate was mainly experienced by the preeminent serviced apartments in the CBD, such as Shangri-La, Frasers, Ritz-Carlton, and the Ascott Group’s apartments, with an average increase between US$100 and 300 per unit per month. As mentioned earlier, several apartments for lease, especially serviced apartments, have anticipated adjusting their asking rental rates upward in response to inflation and to the increase in the regional minimum wage.

Source: Ministry of Manpower & Transmigration

Number of Expatriates Working in Indonesia2011 2012 2013

#Expatriates 77,307 72,427 68,957

Overall, there are some factors affecting the softening of demand in the serviced or non-serviced apartment market. One is the decree of the Ministry of Manpower and Transmigration (Number 4, Year 2012) controlling the number of foreign workers in 19 specific job positions. The number of expatriates working in Indonesia has declined in the last three years. Another factor is the amount of new stock at strata-title apartment projects located in premium areas and suitable to expatriates’ requirements. This is expected to exert pressure on the occupancy level of apartments for lease. Based on our survey of the marketing teams of some serviced apartments, quite a few multinational companies (e.g. pharmacies, oil and gas, and


Average Asking Rental Rate in Different Areasrental rate

per sq m per month change

area 4q 2013 1q 2014 qoq YoY

CBD including South Jakarta

US$26.56 US$27.58 3.85% 12.99%

Non-Prime Areas US$15.49 US$15.64 0.76% 6.08%





Concluding ThoughtThe increase in the interest rates, as well as stricter mortgage regulations, has undoubtedly had an impact on the apartment market that had been benefitting from the cheap credit over the last few years. In fact, in the first quarter of 2014, some developers were confident enough to launch their new projects targeting mostly the middle-upper segment.

The demand for strata-title apartments over the past three years has been quite resilient as Jakartans have taken to inner-city living. Despite the dismal outlook of Jakarta’s apartment market projected early in 2014, developers formulated ways to get around the obstacles, such as providing flexible terms of payment. Such measures effectively maintain the level of apartment absorption because buyers are motivated to buy off-plan projects in anticipation of greater capital gains. Notwithstanding the continued apartment transactions, the market needs more occupancy to stay healthy. The ideal situation is when the units are bought by occupiers or by investors when the leasing market is healthy.

The steep price increases that we have seen over the last three years are likely to soften as the market digests the new economic reality but the long-term trend into high-rise living is very much here to stay, and with the prices still very low by regional standards, there remains plenty of upside in the years ahead.

Meanwhile, the apartment for lease market is expected to maintain a stable occupancy rate. Despite positive inquiries from corporate expansion, tighter competition for upper-class strata-title apartments within premium areas would make the occupancy in apartments for lease market remain steady.

Average Rental Rates of Apartment for Lease


The overall increase in the rental rate was mainly underpinned by prominent serviced apartments in the CBD (including South Jakarta) that posted an average rent of USD33.20 per sqm per month. In the same areas, the non-serviced apartments quoted cheaper rates at an average of USD17.70 per sqm per month. Serviced apartments located in the non-prime areas reached USD26.60 per sq m per month, while the non-serviced apartments charged lower at USD12.70 per sq m per month.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

2Q20

12

3Q20

12

4Q20

12

1Q20

13

2Q20

13

3Q20

13

4Q20

13

1Q 2

014

CBD Non CBD




About Colliers International

Colliers International is a global leader in commercial real estate services, with over 13,500 professionals operating out of more than 485 offices in 63 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.

colliers.com

485 offices in 63 countries on 6 continentsUnited States: 146 Canada: 44 Latin America: 25 Asia: 38 ANZ: 148 EMEA: 84

$2.1billion in annual revenue

1.46billion square feet under management

15,800professionals and staff

Primary Authors:Ferry SalantoAssociate Director | Jakarta62 21 521 1400 ext [email protected]

Colliers International IndonesiaWorld Trade Centre 10th & 14th floorsJalan Jenderal Sudirman Kav. 29 - 31Jakarta 12920Indonesia

TEL 62 21 521 1400

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