Jakarta CBD Grade A office rents decline 1.9% in Q4

Rents declined at a slower rate compared to previous quarters.

In a recent report, JLL revealed office rents in Jakarta CBD recorded a decline of 1.9% q-o-q and 8% y-o-y. Better-quality buildings located within preferred locations and with healthy occupancy have started to maintain their rent levels.

Rents remained competitive, with the average monthly net rent hovering around IDR 200,000 per sqm.

Here’s more from JLL:

The closing quarter of 2023 saw a positive net demand of almost 4,400 sqm. Financial services and consulting firms outperformed the technology sector in terms of quarterly take-up.

A new flex-space operator took over the space previously occupied by a major player in the flex-space market. Another prominent flex-space operator expanded its workspace in a Grade A office building.

Only one new project completion in 2023

The completion of Thamrin Nine 2 – Luminary Tower, with a total area of around 40,000 sqm, has been postponed to 2024. With this update, Jakarta Mori Tower remains the only newly-added Grade A building in 2023.

The vacancy rate in 2023 remained at a similar level compared to 2022 due to limited demand, and as only one new project entered the market.

Outlook: Flight-to-quality and downsizing trends to continue

We anticipate a slightly improved occupancy rate in the next 12 months, driven by continued positive demand and significantly reduced new supply. The flight-to-quality and downsizing trends are expected to continue to shape the market in 2024.

Despite a slower rate of decline and gradual market recovery, competitive rents are expected to impact the market in the coming 12 months, particularly for buildings with relatively high vacancy rates.

Note: Jakarta Office refers to Jakarta's CBD Grade A office market.