Knight Frank Asia-Pacific Office Highlights.
Grade A office rents in Jakarta fell 5.1% YoY to IDR3.99 million psm per annum as the market continues to digest the excess stock available in the city. Occupancy contracted to 76.2% at the end of 2019 equating to around 1.6 million sqm of vacant stock on the market. Most of the available stock has been concentrated in the Grade B and C buildings, as the flight to quality trend continues in tandemwith declining Grade A rents.
Demand continues to come from local firms mainly, with a large concentration from the food and beverage industry. With Jakarta having entered a partial lockdown due to the COVID-19 outbreak and potential impact to the food and beverage profitability; office demand could see some downward pressure over the near term.
With an estimated 1 million sqm of new supply expected to enter the market over the next two years, there will be more downside pressure on rents; this is without factoring a
weaker economy from the coronavirus outbreak.
Nonetheless, Grade A buildings located near the newly completed MRT lines would
continue to attract interest and resist rental pressures more given their proximity benefits.