Jakarta apartment rents to rise 1-3% in the next three years

Competition is set to be tight as more new projects enter the market.

According to a Colliers report, the overall leasing activity of serviced apartments in Jakarta has shown signs of recovery since 2Q 2022, evidenced by an increase in leasing inquiries and an increase in the occupancy rate of several serviced apartment projects. 

This has been primarily attributed to an easing of border entry policies and a loosening of post-entry Covid prevention and quarantine measures. However, additional supply from the opening of new projects has resulted in a drop in overall occupancy by 1.5% QOQ to 59.8%.

Here’s more from Colliers:

Looking ahead, with several projects in the pipeline in the next three years, heightened competition in the serviced apartment market is anticipated, which from the perspective of consumers is positive. Demand, especially from expatriates, will return to the market, because multinationals are not going to stop operating and will keep sending their people out in attempts to stay ahead of the competition. The challenge for corporations is finding amenities for their staff that are of good quality whilst still within their budgets.

While the market has not fully recovered, the rental rates for all serviced apartments in Jakarta have remained steady, at averages of IDR402,324/sq m/month and IDR368,826/sq m/month in the CBD and South Jakarta (including non-prime area), respectively. 

We expect there will be an adjustment in the rental tariff given the more conducive business atmosphere following the decline in Covid-19 cases. On the flipside, we also realise that competition will be tighter as more new projects come into the market. As a consequence, the increment will be limited within the range of 1% to 3% in the next three years.