_Overview of the Industrial Estates in Jakarta and Its Surroundings

Generally, the supply of industrial estates experiences stagnation due to limited land supply available for this business. Based on this condition, the supply trend is expected to develop in locations with the best infrastructure and competitive regional minimum wage as described by Ipung Rachmaningtyas, the Manager Industrial Service Line – Knight Frank Indonesia.

Demands from multi national company (MNC) in general delayed as they are waiting for better condition, while domestic demands continue despite temporary delay in expansion. Warehouse is considered to perform better than industrial estate.

The industrial market is currently active with most of the demands come from the logistical industry, especially e-commerce amidst the pandemic. According to data from Aprindo, daily workers increased between 10% to 15%. In addition, other industries including automotive, F&B, textile, chemical, and manufacturing are also expected to contribute to market take up.

However, amidst the current pandemic, several automotive industries in the eastern corridor have decided to temporarily stop their productions, including Suzuki, Honda Cars, and Wuling despite recent (2019) significant transaction by one of the industrial estates in the eastern corridor.

According to the Ministry of Industry Airlangga Hartanto, several industries have shown interest to move their factories from China to Indonesia as the result of trade war between the U.S. and China. Moreover, the current global pandemic has caused investing countries from Europe and Japan to consider relocating their manufacturing industries from China. However, government’s support is required to harness this condition to spill the optimism over to Indonesia’s industrial growth.

Amidst the industrial growth dynamic, the Coordinating Board of Investment recorded 53% growth in domestic investment in the first quarter of 2020 (contributors: transportation, warehouse, telecommunication, residential, industrial estate, and office). This fact also followed by the contribution of manufacturing industry to the GDP by 10.11% (YOY) in the same year and in the previous year the industry sector contributed around 19.63% to the GDP.

With all these, potentials and optimism are available and in the future, a road map to accelerate industrial growth is required to recover from the current slowdown.