The latest market insight about all property market sectors, including office building, retail, and industrial space
Driven by economic uncertainty and the weakening of Rupiah, the office sector might be experiencing a distinct "flight to value“, whereas tenants would consider to move to highly-competitive offices in strategic locations, even as the "flight to quality" trend persists. This would also imply that tenants would hold more bargaining power to renegotiate their passing rental prior to the lease expiry. Such widespread push for cost efficiency would also be fueling growth in flexible office, furnished spaces, and co-working office. In the meantime on the supply side, developers are delaying new projects to avoid high construction costs caused by the rising price of imported components.
Download PDF PDF | 3.58MB
Many corporations might anticipate slow down in business, despite not overall. However, this might imply that they would hold-off expansion and might not set aside much on capital outlay for relocation. With high vacancy rate in the Jakarta office market, rental is expected to be pressurized or at least stable relatively by end of this year.
Concluding the year, Jakarta office market has shown an improvement compared to its previous year. The government has officially lifted all stay-at-home regulations indicating that business can resume as usual as in the pre-Covid condition. Companies begin to offer option for employees to return to the office, but the flexibility of working-from-home is also set to stay.
The prolonged escalation of the war in Europe has brought series of problems that narrows down to growing inflation, increase of interest rate, and concerns about global recession in 2023. With all of the factors in play, the property market has faced a new challenge after shifting from the covid-19 problem.
The improving pandemic situation earlier this year, along with the sign of a resurgence of office leasing activity, the market is expected to be more positive in the long run. The continued use of remote working practices especially in service-based industries is leading to a tendency for larger corporation to consolidate their office. Logistics and technology-based companies that are concerned with flight-to-quality are expected to drive the growth in demand in the Jakarta office market.
Description