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The continued adoption of hybrid working model, particularly among multinational companies aligning with regional office policies, combined with the ongoing flight-to-quality trend, have led to a shift in demand toward smaller office spaces in higher-quality buildings located in more strategic areas. This reflects a growing preference for efficiency, accessibility, and premium-grade amenities.
Rental rates in Jakarta CBD are projected to gradually experience an uptick, amidst the absence of upcoming new supply and strengthening demand for high-quality buildings. In the meantime, rental rates in the OCBD area are expected to remain stable, as landlords are likely to maintain competitive pricing in response to future new supply and the need to attract and retain tenants.
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Ongoing economic challenges and global geopolitical tensions continue to create uncertainty in the market. As a result, some companies are taking more cautious and strategic steps as in downsizing their office space or seizing the opportunity to expand or relocate to higher-quality offices to more favorable locations and favorable rental rates.
Indonesia's resilient economic outlook, despite global geopolitical tensions and market uncertainties, is expected to underpin positive sentiment in the Jakarta office market for the coming years. As the nation's financial and commercial hub, Jakarta's strategic importance continues to fuel its growth trajectory.
As this country is expected to hit economic growth of 5.2% this year, market sentiment remains positive. As the market has normally run, demand for office space is projected to remain moderate with positive absorption for the rest of this year. Some new supplies are slated to complete and might bring pressure on the occupancy rate, especially in the OCBD. In parallel, CBD market is expected to increase due to the absence of new office supply.
Following the conclusion of the presidential election, some companies have initiated office space expansions or renewals. Despite the increasing demand this quarter, landlords have refrained from raising base rents due to the imminent completion of new buildings in this market. In the meantime, high-quality office spaces near public transportation are becoming scarce, prompting some companies to explore office options in other locations to meet their needs.
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