Jakarta office occupancy rate continues to rise slightly after the pandemic
The improving pandemic situation in early part of 2022 has led employees to gradually return to office, along with the resurgent of market activities. However, excess new supply and double-digit vacancies will put further downward pressure on rents in Jakarta.
10 October 2022
The easing in public mobility restriction policy has fueled optimism in various economic sectors, including the office sector. Regionally, this was shown by the increase in Asia Pacific office occupancy rate, at approximately 1.9% (qoq).
However, the steady flow of office workers returning to offices that began in the mid semester of 2022 has not been able to increase the growth in lease-office transactions, especially in the Jakarta Central Business District (CBD) areas. This poses challenges for the office sector to recover. Despite several recorded transactions for relocation and lease extension, the expansion of office space that reflects business growth remains to be seen.
The Jakarta Property Highlight recorded that in the first half of 2022, the occupancy rate of the office sector was 73.3% making it difficult for rental rate increase. No new supply is coming to the market, while 2 office towers are renovating, causing the supply and rental rate at status quo.
Despite various challenges, new supply of 7 office projects is scheduled for completion in 2023. Two projects were originally scheduled for completion last year.
The Jakarta Property Highlight also recorded that the trend for green building or Environmental, Social, and Governance (ESG) is increasing. 76% of new office towers in the Jakarta CBD area are adopting the trend.
In addition, Information & Technology, Fintech, Mining, Insurance, and Agribusiness are currently driving most transactions in the Jakarta CBD area office sector.
Basically, return to office (RTO) is required after the hybrid working pattern in the past two years to promote further peer collaboration and hone workers’ professionalism. Flexible working arrangement and quality office spaces will be the key areas to watch.
To learn more about the Jakarta CBD Office Market Overview H1 2022, please head over to this link: https://kfmap.asia/research/jakarta-cbd-office-market-overview-h1-2022/2124. For further information, please contact Syarifah Syaukat (syarifah@id.knightfrank.com) or Monicha Nelis (monicha.nelis@id.knightfrank.com).
