Jakarta office rents down 7.3% in Q1

The rate of decline has slowed over the last two years.

Jakarta office rents continued to decline at around 1.6% quarterly and 7.3% annually in 1Q24, according to data from JLL. 

The decline was still driven by the competitive market, although the pace of decline has decreased compared to the previous two years.

Here’s more from JLL:

Rents are expected to remain competitive for buildings with relatively low occupancy rates. The net rent hovered at around IDR 200,000 per sqm, per month, as of the opening quarter of 2024.

The technology sector remains one of the primary demand drivers

A relatively significant positive net demand of around 18,800 sqm was recorded in 1Q24. Besides technology companies, the energy and financial services sectors continued to have the highest take-up rates in the quarter.

One flex-space operator has expanded its operations to another Grade A office building in the CBD of Jakarta. In recent years, a common expansion strategy has been to establish joint operations with landlords.

A new project completes in the first quarter of 2024

Thamrin Nine 2 – Luminary Tower, connected to the Thamrin Nine 1 – Autograph Tower, was completed and became fully operational in the first quarter of 2024.

Despite the addition of 40,000 sqm from the newly-completed project, the vacancy rate remained around 36% due to the positive net demand recorded in 1Q24.

Outlook: Vacancy rate to hover around 36%

The flight-to-quality and downsizing trends will continue to shape the market in 2024. The occupancy rate is likely to stabilise at around 64% for the remaining quarters of 2024.

Following trends observed in previous quarters, rents continue to decline at a slower rate, despite the fact that there are no expected new completions for the next 12 months.

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