Jakarta's office property market is demonstrating robust growth indicators with steady demand set to continue, and the supply of new properties is on the rise. However, this will likely result in a sustained trend of marginal decreases in office rental rates over the next 12 months.
Demand is primarily driven by two sources: the burgeoning tech sector with foreign investments and operators offering flexible workspace solutions for businesses. The tech sector, in particular, stands out, accounting for approximately 9,000 square metres of demand quarterly (notably, 40% of the total demand in Q2 2023). The focus remains on Grade-A offices, especially those in Sudirman's Central Business District.
With the consistent influx of new properties in the market, the balance is tilting in favour of buyers over sellers. With supply likely to outpace demand, rental rates are set to continue their moderate downward trend. In Q2 2023, there was a quarterly decline of 2.1% in rental rates and an annual drop of 8.2%. Grade-A office spaces were rented out at around $12.7 per square metre per month.
While the market is expected to see an uptick in occupancy rates in the upcoming quarters, this is unlikely to materialise by the end of the year. A potential impediment is the "Thamrin Nine 2 — Luminary Tower" project, postponed for the second half of 2023, which is set to add about 40,000 square metres of space to the market.