Research & Forecast Report Jakarta | Apartment 3Q 2015
Accelerating success.
Apartment Sector
Highlight
Despite the weight of multiple downside pressures like sluggish economic growth and lackadaisical demand, overall apartment prices still witnessed a minor increase of 3.4% QoQ or 11.2% YoY to IDR29.87 million/sq m. This increase is the result of the price adjustments developers often make due to take-up as their projects near completion. The average take-up rate in 3Q 2015 for under construction and completed projects was relatively stable at 85.8%, down only moderately from the previous quarter.
Apartment for Strata-title Supply Newly Completed Projects during 3Q 2015 Name of development
location
region
developer
no. of units
Setiabudi Sky Garden (tower 1)
Jl. Karbela Selatan
CBD
Jakarta Setiabudi International
Raffless Residence
Jl. Satrio
CBD
Ciputra
The H Residence
Jl. MT Haryono
East Jakarta
Hutama Karya Realtindo
383 1,000
Bassura City (Tower Flamboyan)
Jl. Basuki Rahmat
East Jakarta
Synthesis Development
Senopati Penthouse
Jl. Senopati Kav 45
South Jakarta
Senopati Aryani Prima
426 88
63
Providence Park
Jl. Kalimaya - Iskandar Muda
South Jakarta
PT Sinar Pamaronda
114
Satu8 Residence
Jl. Pilar Komp. Delta, Kedoya
West Jakarta
PT Karya Cipta Sukses Selaras
168
Capitol Park (Tower Safir)
Jl. Salemba Raya
Central Jakarta
PT. Wikaraga Sapta Utama
976
Source: Colliers International Indonesia - Research
The completion of seven projects contributing an additional 3,218 units increased the inventory of strata-title apartments in Jakarta to a total of 152,358 units; up by 2.2% QoQ or 9.4% YoY. The majority of the new completed projects were brand-new projects, except for the Bassura City project with its new tower called Flamboyan Tower (an extension of the first completed tower, Geranium Tower). Of the 3,218 newly available units this quarter, Bassura City is the project with the highest number of units. 79% of the 3,218 units are categorised as middle-class apartment including Bassura City itself together with The H Residence, Satu8 Residence and Capitol Park (Tower Safir). Other than the Basura City project, there are mainly projects with limited units, suggesting the exclusivity of the development. This includes projects like Setiabudi Sky Garden, Senopati Penthouse and Providence Park which represent 19% of the total newly
1
operating units this quarter. The completion of Raffles Residence will add more units in the category of luxury apartment in the CBD area. Despite undergoing downside pressure on sales activity, developers still set positive expectations on the property market, especially for residential projects, largely in view of the mature demographic profile and rising middle-class. In addition, Jakarta City is anticipating massive improvements in infrastructure development including LRT (Light Rail Transit), MRT (Mass Rapid Transit) and toll roads which are expected to boost demand for residences within the catchment area, as well as the value of properties in the surroundings. Eight strata-title apartment projects, consisting of 3,308 units, were also launched or introduced between July and September 2015. These projects are slated for completion from 2018 to 2020.
Research & Forecast Report | 3Q 2015 | Office | Colliers International
Newly Introduced/Launched Apartment in 3Q 2015 Name of development The Elements Epicentrum (2 towers)
LOCATION Rasuna Said
Expected completion ASKING price/sq m* time
region CBD
2018
No. of Units
IDR36,000,000
372
Menteng 37
Menteng
Central Jakarta
2018
IDR47,000,000
99
The Linq
Kemayoran
Central Jakarta
2019
IDR22,600,000
922
Ratu Prabu 3 Residences
TB. Simatupang
South Jakarta
2018
to be announced
61
Fatmawati City Center (1st phase)
Fatmawati
South Jakarta
2019
IDR 35,000,000
900
Royal Park Kebayoran
Cipulir
South Jakarta
2019
IDR 25,000,000
630
Ammi Residence
Dharmawangsa
South Jakarta
2019
IDR 46,000,000
136
The Residence Gatot Subroto
Gatot Subroto
South Jakarta
2020
IDR 35,500,000
188
*Exclude VAT Source: Colliers International Indonesia - Research
Prime area like Menteng still continue to be a preferred location for upper-class residences, despite having limited land to develop. Pikko Land and PT Wijaya Wisesa will develop a joint venture apartment project called Menteng 37, aiming at upper-class buyers. With a similar target market, Sinar Mas Land will build The Elements in Rasuna Epicentrum business compound, comprising two towers, with 2- to 3-bedroom units. Another newly launched project, The Linq, will be located in the Kemayoran area. This project is targeting the middle-class market segment and will be developed by KG Global Development, the same developer that built The City Tower, TCC Batavia, Tamini Square and the future Mangkuluhur project. During 2015YTD, a total of 18,317 units have been introduced to the market, a large proportion of which are new projects in the South Jakarta area. By number of units and number of projects, South Jakarta has 30 and 52% of the apartment supply, respectively, followed by West Jakarta, with 17 and 25%. South and West Jakarta continue to be growing residential areas, taking advantage of established and good accessibility to the downtown as well as better infrastructure and facilities. These include access to the toll road, airport, international schools and shopping centres. East Jakarta continues to be the choice of both investors and end-users in the middle-lower segment.
2
Total Number of Units Being Introduced or Launched During 2015YTD in Each Region 6,000
5,000
4,000
units
Quite a few future projects (58% of the total future apartments) will be located in South Jakarta. In line with massive commercial development in TB Simatupang and surrounding areas, more new apartment projects are under construction and in planning, including Ratu Prabu 3 Residences and Fatmawati City Centre that cater to the middle- to upper-class segment. In the south, a crème de la crème residential area, Dharmawangsa will see an upscale project called Ammi Residence, complementing the other existing upper-class projects in the neighbourhood. Other future apartment projects being launched this quarter are Royal Park Kebayoran, located in Cipulir, and The Residence Gatot Subroto; both are targeted at the middle class.
3,000
2,000
1,000
0 CBD
Central Jakarta
South Jakarta
North Jakarta
East Jakarta
West Jakarta
Source: Colliers International Indonesia - Research
The government has recently released a stimulus package aimed at luring more investment to Indonesia. One of the policies includes investment in the property sector. The government will push to provide housing accommodation for low-income households, while widening investment opportunities in the domestic property sector, which allows foreign ownership of luxury condominiums priced at a minimum of IDR10 billion (approximately USD700,000)/unit. This plan sounds like a positive endorsement for developers, especially those who build upscale projects. However, we expect that the regulation will have little impact on the overall sales activities because the market share of this segment only represents less than 1% of the total 96,781 units in the market that are offered at IDR10 billion/ unit.
Research & Forecast Report | 3Q 2015 | Office | Colliers International
Total Number of Projects Being Introduced or Future Supply Units (2015 - 2020) Based on Class Launched During 2015YTD in Each Region West Jakarta 17%
CBD 7%
East Jakarta 4%
Upper 11%
Low 5%
Luxury 1%
Central Jakarta 17%
North Jakarta 3%
Middle-Upper 36%
South Jakarta 52%
Middle-Lower 47%
Source: Colliers International Indonesia - Research
Source: Colliers International Indonesia - Research
Apartment Development in the Pipeline (2015 - 2019) Apartment name
location
region
no. of units
2015 The Grove (Empyreal + Masterpiece)
Jl. HR Rasuna Said
CBD
438
Ciputra World - Luxurious Raffles Residences
Jl. Prof Dr Satrio
CBD
64
Setiabudi Sky Garden (tower 1)
Jl. Karbela Selatan
CBD
426
Setiabudi Sky Garden (tower 2)
Jl. Karbela Selatan
CBD
160
Elpis Residence
Gunung Sahari
Central Jakarta
790
Capitol Park Apartment (Tower T)
Jl. Salemba Raya, Menteng
Central Jakarta
727
Capitol Park Apartment (Tower U)
Jl. Salemba Raya, Menteng
Central Jakarta
976
The Mansion at Dukuh Golf Residence (Aurora Tower)
Jl. Benyamin Sueb Kemayoran
Central Jakarta
522
The Mansion at Dukuh Golf Residence (BellaVista Tower)
Jl. Benyamin Sueb Kemayoran
Central Jakarta
612
The Royal Springhill (Lotus Tower)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
192
The Royal Springhill (Bouvardia Tower)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
120
Casablanca East Residence (2 Twr)
Jl. Pahlawan Revolusi
East Jakarta
The H Residence
MT Haryono
East Jakarta
383
Bassura City (Tower Flamboyan)
Jl. Basuki Rahmat
East Jakarta
1,000
Bassura City (Tower Edelweiss)
Jl. Basuki Rahmat
East Jakarta
1,000
Bassura City (Tower Dahlia)
Jl. Basuki Rahmat
East Jakarta
1,000
Titanium Square
Jalan Raya Bogor Kav. 27 Pasar Rebo
East Jakarta
725
Bassura City (Tower Geranium)
Jl. Basuki Rahmat
East Jakarta
900
Pluit Seaview (Tower Maldives)
Pluit
North Jakarta
940
1,904
Northern Ancol Residence
Jl. Laksamana R.E. Martadinata, No. 26
North Jakarta
800
Teluk Intan (Tower Saphire)
Jl. Teluk Gong
North Jakarta
1,100
Callia Apartment
Jl. Perintis Kemerdekaan
North Jakarta
560
The Oak Tower (2 Towers)
Jl. Perintis Kemerdekaan
North Jakarta
821
Green Bay Pluit (Sea View)
Jl. Pluit Karang Ayu
North Jakarta
2,072 297
The Royal Olive Residence (Tower I)
Jl. Buncit Raya
South Jakarta
Senopati Penthouse
Jl. Senopati Kav 45
South Jakarta
63 continued
3
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Apartment name
location
region
no. of units continuation
Senopati Suites 2
Jl. Senopati
South Jakarta
81
LA City Apartment (Tower A)
Jl. Raya Lenteng Agung, Jagakarsa
South Jakarta
980
La Maison Barito (Tower 1)
Barito
South Jakarta
80
Nine Residence
Warung Buncit
South Jakarta
246
Providence Park
Jl. Kalimaya - Iskandar Muda
South Jakarta
114
Kencana Residence
Jl. Sultan Iskandar Muda
South Jakarta
173
Niffaro Apartment (Ebony Tower)
Jl. Kalibata Raya
South Jakarta
288
La Venue - South Tower
Jl. Pasar Minggu
South Jakarta
341
Botanica Apartment (3 Towers)
Simprug, Kebayoran Baru
South Jakarta
626
Woodland Park (Trambesi tower)
Jl. Kalibata Raya
South Jakarta
221
Belmont Residence (Tower Montblanc)
Jl. Meruya Ilir
West Jakarta
350
Green Palm Residence @ Puri
Jl. Kosambi
West Jakarta
1,000
Metro Park Residence
Kebon Jeruk
West Jakarta
1,451
St. Moritz (New Presidential Tower)
Jl. Puri Indah
West Jakarta
159
Satu8 Residence
Jl. Pilar Komp. Delta, Kedoya
West Jakarta
174
The Nest Apartment
Jl. Raden Saleh Raya, Meruya Utara
West Jakarta
1,100
19 Avenue Apartment 9 (Tower A)
Daan Mogot
West Jakarta
338
Jl. Prov Dr Satrio Kav 6, Kuningan
CBD
119 349
2016 The Residence (CWJ 2) The Orchad Satrio (CWJ 2)
Jl. Prov Dr Satrio Kav 6, Kuningan
CBD
Gayanti City (2 Towers)
Jl. Gatot Subroto
CBD
318
T - Plaza Residence (Tower A)
Jl. Penjernihan I Kav.1 Pejompongan
Central Jakarta
307
Sentosa Residence
Cempaka Putih
Central Jakarta
687
Sudirman Hill Residence
Jl. Karet Pasar Baru
Central Jakarta
255
The Green Pramuka (Tower Orchid)
Jl. Jenderal Ahmad Yani
Central Jakarta
1,000
The Green Pramuka (Tower Penelope)
Jl. Jenderal Ahmad Yani
Central Jakarta
1,000
The Green Pramuka (Tower Scarlet)
Jl. Jenderal Ahmad Yani
Central Jakarta
1,000
Capitol Suites
Jl. Prapatan Raya
Central Jakarta
327
The H Residence Kemayoran (Amethyst)
Jl. Rajawali Selatan
Central Jakarta
800
The Royal Springhill (Bulgari Tower)
Jl. Spring Hill Residence Kemayoran
Central Jakarta
192
Holland Village (Phase II)
Cempaka Putih
Central Jakarta
230
Signature Park Grande
Jl. MT. Haryono
East Jakarta
1,100
Bassura City (Tower Cattleya)
Jl. Basuki Rahmat
East Jakarta
600
East Park Apartment (Tower C)
Jl. KRT Radjiman
East Jakarta
550 600
Bassura City (Tower Alamanda)
Jl. Basuki Rahmat
East Jakarta
Sentra Timur Residence (Tower Tosca)
Pulo Gebang
East Jakarta
133
Pluit Seaview (Tower Belize)
Pluit
North Jakarta
300
Pluit Seaview (Tower Ibiza)
Pluit
North Jakarta
500
Pluit Seaview (Tower Bahama)
Pluit
North Jakarta
650
Marina The Coastal
Ancol
North Jakarta
1,500
La Venue - North Tower
Jl. Pasar Minggu
South Jakarta
253
Kemang Village (The Bloomington)
Jl. P Antasari
South Jakarta
150
Senopati Suites 3
Jl. Senopati
South Jakarta
54
1 Park Avenue (3 Towers)
Jl. KHM Syafi'I Hadzami (terusan gandaria)
South Jakarta
279
Pakubuwono Terrace Grand Tower
Kebayoran Lama
South Jakarta
435
District 8 (Tower Eternity)
Jl. Senopati
South Jakarta
400
District 8 (Tower Infinity)
Jl. Senopati
South Jakarta
280 continued
4
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Apartment name
location
region
no. of units continuation
Izzara Apartment (South and North Tower)
TB. Simatupang
South Jakarta
Lexington Rersidence
Pondok Pinang
South Jakarta
542 275
Apartment Pejaten Park Residence
Jl. Warung Buncit Raya No.21
South Jakarta
560
The Aspen Peak at Admiralty (Tower C)
Jl. Fatmawati
South Jakarta
322
Four Winds
Jl. Permata Hijau Raya No.1
South Jakarta
122
Bellevue Place
MT Haryono, Tebet
South Jakarta
240
Kebayoran Icon
Jl. Ciledug Raya
South Jakarta
256
One Casablanca Residence
Jl. Pal Batu
South Jakarta
215
Grand Dhika Mansion Pejaten (Sector 1)
Jl. Siaga Raya
South Jakarta
44
Sapphire Residence
Lebak Bulus
South Jakarta
37
Woodland Park (Mahogany Tower)
Jl. Pahlawan Kalibata
South Jakarta
218
St Moritz (The New Ambassador Suite Tower)
Jl. Puri Indah Kembangan
West Jakarta
200
The Windsor (Tower II)
Jl. Puri Indah
West Jakarta
164
Gianetti Apartment
Jl. Kebon Jeruk Raya, Kemanggisan
West Jakarta
500
Gallery West
Jl. Panjang No 5
West Jakarta
280
Green Park View (Tower G)
Jl. Daan Mogot
West Jakarta
1,200
Belmont Residence (TowerAthena)
Jl. Meruya Ilir
West Jakarta
193
Puri Mansion Apartment (Tower Amethyst)
Jl. Lingkar Luar Barat, Puri Kembangan
West Jakarta
900
Madison Park
Tanjung Duren
West Jakarta
1,200
Veranda
Jl. Pesanggrahan Raya, Kembangan
West Jakarta
174
Sudirman Suites
Jl. Sudirman
CBD
380
Domaine
Jl. Jend. Sudirman Kav 1
CBD
186
Verde Two (Tower East)
Jl. Rasuna Said
CBD
182
Anandamaya Residences (3 towers)
Jl. Jend Sudirman
CBD
500
Central 88 (2 Towers)
Jl. Trembesi, Kemayoran
Central Jakarta
612
Menteng Park
Jl. Cikini Raya No.79
Central Jakarta
756
Holland Village
Cempaka Putih
Central Jakarta
400
Royal Suites
Kemayoran
Central Jakarta
450
The Green Pramuka (Tower Nerine)
Jl. Jenderal Ahmad Yani
Central Jakarta
1,000
Green Signature Apartment
Jl. MT. Haryono
East Jakarta
800
Podomoro Park
Jl. I Gusti Ngurah Rai, Klender
East Jakarta
3,000
Sentra Timur Residence (Tower Brown)
Pulo Gebang
East Jakarta
605
2017
Bassura City (Tower Jasmine) 2 tower
Jl. Basuki Rahmat
East Jakarta
2,000
Bassura City (Tower Heliconia)
Jl. Basuki Rahmat
East Jakarta
700
La Terrasse
Jl. Deplu Raya No.12
South Jakarta
111
The Foresque
Pasar Minggu, Ragunan
South Jakarta
660
The Langham Residences
Senopati
South Jakarta
57
Antasari Heights
Jl. Pangeran Antasari No.8
South Jakarta
360
The Batik @ Pejaten
Jl. Siaga Raya
South Jakarta
137
La Foret Vivante
Jl. Limo, Permata Hijau
South Jakarta
253
Selatan 8 (Tower Sultan)
Kebayoran Lama
South Jakarta
336
The Hamilton
Jl. KHM Syafi'I Hadzami
South Jakarta
112
Puri Orchad (3 Tower)
Jl Raya Adicipta
West Jakarta
Maqna Residence
Jl. Meruya Ilir No. 88
West Jakarta
312
Vittoria Residence (3 tower)
Jl. Daan Mogot
West Jakarta
1,100
3,000
continued
5
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Apartment name
location
region
no. of units continuation
Wang Residence
Jl. Panjang No 18
West Jakarta
250
Taman Anggrek Residence (6 towers)
Tanjung Duren
West Jakarta
3,000
19 Avenue Apartment (Tower B)
Daan Mogot
West Jakarta
416
Sycamore Suites
Puri Botanical
West Jakarta
125
Regatta London Tower
Jl. Pantai Mutiara
North Jakarta
186
Verde Two (Tower West)
Jl. Rasuna Said
CBD
152
Lavie
Jl. Denpasar Raya
CBD
302
South Hill
Jl. Denpasar Raya
CBD
611
Le' Parc
Jl. Thamrin
CBD
100
Regent Residences (tower 1)
Semanggi
CBD
100
The Hundred Residence
Mega Kuningan
CBD
100
The Elements (2 towers)
Rasuna Said
CBD
372
Core Sky Residence
Pulo Gebang
East Jakarta
282 476
2018
Sahid Garden Residence
Ciracas
East Jakarta
Menteng 37
Menteng
Central Jakarta
99
Regatta Apartment (Tower New York)
Pantai Mutiara
North Jakarta
186
Sedayu City (Tower Berlin)
Jl. Pegangsaan Dua Raya
North Jakarta
912
The Kensington Royal Suites (4 Tower)
Kelapa Gading
North Jakarta
790
Jaya Ancol Seafront - Oceana Tower
Pademangan, Ancol
North Jakarta
524
Gold Coast Apartment (Bahama Tower)
Pantai Indah Kapuk
North Jakarta
600
Gold Coast Apartment (Carribean Tower)
Pantai Indah Kapuk
North Jakarta
600
Gold Coast Apartment (Honolulu Tower)
Pantai Indah Kapuk
North Jakarta
600
Grand Marina Ancol
Ancol
North Jakarta
672
Gold Coast Apartment (Atlantic Tower)
Pantai Indah Kapuk
North Jakarta
568
The Aspen Peak at Admiralty (Tower D)
Jl. Fatmawati
South Jakarta
322
Casa Grande Residence 2 (Tower Angelo)
Jl. Casablanca
South Jakarta
350
Casa Grande Residence 2 (Tower Bella)
Jl. Casablanca
South Jakarta
350
Casa Grande Residence 2 (Tower Chianti)
Jl. Casablanca
South Jakarta
350
Pondok Indah Residences (3 Towers)
Pondok Indah
South Jakarta
880
Selatan 8 (Tower Prabu)
Jl. Raya Ulujami
South Jakarta
344
45 Antasari (2 Tower)
Antasari
South Jakarta
1,924
Arzuria Apartment
Jl. Tendean
South Jakarta
210
Pakubuwono Spring (2 towers)
Jl. Teuku Nyak Arief No.9
South Jakarta
545
Branz Simatupang (2 tower)
TB. Simatupang
South Jakarta
381
Synthesis Residence Kemang
Jl. Ampera Raya
South Jakarta
1,100
The Ease Brawijaya
Jl. Taman Brawijaya III Kebayoran Baru
South Jakarta
54
Royal Olive Residence (Tower 2)
Jl. Buncit Raya
South Jakarta
231
Kemang Penthouse
Kemang
South Jakarta
262
Ratu Prabu Residence 3
TB. Simatupang
South Jakarta
61
Ciputra International Puri Indah (Tower Amsterdam)
Jl. Lingkar Luar Barat
West Jakarta
412
Grand Madison Park
Tanjung Duren
West Jakarta
300
Citra Lake Suites (Tower Rosewood)
Jl. Raya Kresek
West Jakarta
104
Citra Lake Suites (Tower Greenwood)
Jl. Raya Kresek
West Jakarta
126
Citra Lake Suites (Tower Oakwood)
Jl. Raya Kresek
West Jakarta
117
Citra Lake Suites (Tower Sherwood)
Jl. Raya Kresek
West Jakarta
122
Aerium Taman Permata Buana
Taman Permata Buana
West Jakarta
550 continued
6
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Apartment name
location
region
no. of units continuation
Ciputra International Puri Indah (Tower Barcelona)
Jl. Lingkar Luar Barat
West Jakarta
335
Puri Mansion Apartment (Tower Crystal)
Jl. Lingkar Luar Barat, Puri Kembangan
West Jakarta
700
West Vista (2 towers)
Jl. Lingkar Luar Barat No.8, Duri Kosambi
West Jakarta
2,840
Citra Living Apartment (Somerset Tower)
Jl. Citra 7, Kalideres
West Jakarta
312
Menara Jakarta (Tower Equinox)
Kemayoran
Central Jakarta
396
Menara Jakarta (Tower Azure)
Kemayoran
Central Jakarta
860
Orient Residence
Jl. Yos Sudarso, No 76
North Jakarta
225
Green Sedayu Apartment (Tower Pasadena)
Jl. Kamal Raya, Cengkareng
West Jakarta
896
Fatmawati City Center (1st phase)
Fatmawati
South Jakarta
900
Royal Park Kebayoran
Cipulir
South Jakarta
620
The Linq
Kemayoran
Central Jakarta
922
Ammi Residence
Dharmawangsa
South Jakarta
136
The Residence Gatot Subroto
Gatot Subroto
South Jakarta
188
2019
Source: Colliers International Indonesia - Research
Demand The first semester of 2015 was a hardship period for the apartment market. In general, the apartment market during 3Q 2015 remained challenging. The continuing rupiah depreciation against the US dollar and slower economic growth (which has been below 5%) has been the main cause of the slowdown in sales. Potential buyers, particularly investors, are now becoming more cautious and prudent in spending their money. Overall, the average take-up rates in 3Q 2015 remained at 85.8%, down moderately from the previous quarter. The table below shows that the existing apartment market recorded a positive sales trend, albeit moderate, while the pre-sales of underconstruction apartments slipped by less than 1% compared to the previous quarter. Additionally, the softening demand in presales activity is also due to the wait-and-see attitude of investors waiting for further conducive measures from the government regarding a number of proposed regulatory changes, including land and building tax, foreign ownership and luxury tax (PPnBM).
Take-up Rate Performance of Existing and Underconstruction Projects 2Q 2015
3q 2015
QoQ
Existing Projects
95.8%
96.0%
0.2%
Pre-Sales Rates (of under construction projects)
69.0%
68.6%
-0.4%
Average (existing and under construction projects)
85.9%
85.8%
-0.1%
Bank Indonesia’s relaxed policy through the new LTV regulation has yet to have a direct positive impact on the pre-sales activity and mortgage demand, in our opinion mainly because the interest rate is still high. As a result, developers / companies continue to offer longer in-house financing (cash instalments) and balloon payment to the buyers. In our view, despite the fact that Bank Indonesia has raised the loan-to-value ratios (from 30% : 70% to 20% : 80%), the prevailing regulation that bans on indent mortgage contributed to the slowdown in demand, especially for the under-construction projects. For some time, the CBD has remained the preferred location and with limited land to be developed, this area continues to record the highest average take-up rate of 96.8% compared to the other areas. This figure suggests a modest increase of 2.1% from the previous quarter or 1.5% YoY as a result of continued absorption of both existing and under-construction apartment units, besides the fact that there is only a limited number of projects being offered in CBD. Similarly, the apartment market in the non-prime area also recorded an upward trend, albeit a moderate one, during the reviewed quarter. As part of investment instruments, the property sector, in particular apartments, remains attractive for domestic investors. With relatively reasonable prices, apartment projects in the non-prime areas have appealed to individual investors who hope to protect their wealth in the midst of a dismal economy. In the other favourite home location, South Jakarta, sales performance has weakened since the beginning of 2015, largely affected by the influx of abundant new projects (52% of the total newly introduced/launched projects) which was not counterbalanced by the same absorption rate.
Source: Colliers International Indonesia - Research
7
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Average Take-up Rate Performance in Three Major Areas 100% 90% 80% 70% 60% 50%
Asking Price Under the weight of multiple downside pressures like sluggish economic growth and lackadaisical demand, the overall apartment price still witnessed a minor increase this quarter. The average price increased by 3.4% QoQ or 11.2% YoY to IDR29.87 million/sq m (based on hard-cash payment scheme excluding VAT). However, the figures below show that the pace of increase in prices continued to slow, evidenced by the current annual growth that is lower than the average growth in the last four years.
Annual Apartment Asking Price During 2011 – 2015
40% 30%
35,000,000
20% 30,000,000
0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 CBD
Non-prime
South Jakarta
Source: Colliers International Indonesia - Research
Take-up Rates of Under-construction Projects in Three Major Areas 2Q 2015
3q 2015
CBD
85.5%
87.6%
2.1%
Non-prime Area
68.1%
68.9%
0.8%
South Jakarta
66.9%
63.6%
-3.3%
Average P rice/s q m (IDR )
10%
R AG
+
25,000,000
C 15%
20,000,000 15,000,000 10,000,000 5,000,000
QoQ
0 3Q 2011
3Q 2012
3Q 2013
3Q 2014
3Q 2015
Source: Colliers International Indonesia - Research
Source: Colliers International Indonesia - Research
In the middle of September, the Ministry of Finance indicated that the luxury tax (PPnBM) of 20% is only imposed on property transactions for houses and apartments worth more than IDR10 billion (approximately USD700,000). The threshold for the superluxury tax (PPH 22) was revised during 2Q 2015 from IDR10 to 5 billion. At this stage, we are still waiting for a comprehensive regulation so that the luxury tax and super-luxury tax will not overlap. In general, such an incentive would stimulate the residential property market to further move forward.
Price adjustments during the quarter are mainly triggered by continuing construction progress that maintains market confidence. Projects approaching the hand-over stage seem to have limited available units, which also led to the adjustment in prices. Another factor that stimulates price adjustments is that some apartment projects offer semi-furnished units, equipped with stove, kitchen cabinets, water heater and air-conditioner, which force prices higher.
Another hot issue but remains uncertain is to allow foreign ownership of Indonesian property in a bid to boost tax revenue as well as the domestic property industry. This will enable foreigners (expatriates) to buy, own, inherit and trade luxury apartments that have a minimum value of IDR10 billion on a “right to use” or “hak pakai” title. The IDR10 billion minimum value of the luxury apartments has not yet formally decided. Nevertheless, in our opinion such a regulation would not significantly accelerate sales activity because there are only a few apartment projects with units valued above IDR10 billion (circa 1% from the total of under-construction units).
Although there might be a sizeable pool of potential investors or buyers waiting on the side-lines, these buyers are now more selective and will only commit if desired projects have a competitive price. Furthermore, in the middle of slowing economic conditions, psychologically, buyers or investors might be reluctant to make a purchase now.
Average Asking Price (in IDR) in Three Different Regions 3Q 2014 CBD Non-prime area
2Q 2015
QoQ
YoY
41,759,,611
45,279,368
46,322,208
2.3%
10.9%
20,320,645
21,646,375
22,429,188
3.6%
10.4%
31,241,685
33,469,503
34,699,316
3.7%
11.1%
South Jakarta
Source: Colliers International Indonesia - Research
8
3Q 2015
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Distribution of Apartments for Lease
Apartment For Lease Supply For the last two consecutive quarters, Jakarta has not seen any new projects of apartments for lease, after Ascott Kuningan began operation in the last quarter of 2014. During the reviewed quarter, one serviced apartment building started operations, namely Ra Residence, developed by Lembonghouse, which is renowned for its service in providing houses for expatriates. Located in a growing business district in South Jakarta, TB Simatupang, Ra Residence consists of 110 units, ranging from studios to 3-bedroom apartments.
North Jakarta 5%
CBD 44% South Jakarta 35%
With the completion of Ra Residence, the cumulative supply of apartments for lease increased by 1.3% QoQ to 8,629 units. Of these, 59% are serviced apartments. There was no significant change from last quarter in terms of location, where apartments for lease in Jakarta are mainly scattered around the CBD and South Jakarta areas, at 44 and 35%, respectively. There are currently three serviced apartment projects in the pipeline which are expected to be completed in 2015 - 2016.
Size (sq m)
No. of UNIT
30 32 40 64 96 128
Studio 1BR 2BR 3BR
Central Jakarta 10% Source: Colliers International Indonesia - Research
Detail Unit in Ra Residence Type
West Jakarta 6%
11 48 13 32 4 2
Source: Colliers International Indonesia - Research
Serviced Apartment in the Pipeline Name of Development
Location
Year of Operation
Operator
no. of units
Fraser Place at Setiabudi Sky Garden
Jl. Karbela Selatan
2015
Frasers Hospitality
150
Fraser Suites at Ciputra World Jakarta 2
Jl. Prof Dr Satrio
2016
Frasers Hospitality
200
Oakwood at District 8 Senopati
Jl. Senopati
2016
Oakwood
180
Source: Colliers International Indonesia - Research
Occupancy Rate As of 3Q 2015, the overall occupancy rate of apartments for lease in Jakarta experienced a slight decrease compared to the previous quarter. In terms of location, the CBD area recorded a modest increase of 0.1% over the previous quarter to 79.5%. The increase was mainly due to short-term leases for serviced apartments, which constituted about 20 - 30% of the total occupied units. There was no change in the overall occupancy rate in nonprime areas. On the other hand, the new operating Ra Residence is the main reason for the sluggish occupancy rate of serviced apartments, particularly in the South Jakarta area.
9
QoQ Occupancy Performance Based on Region (%) Area
2Q 2015
3Q 2015
QoQ
CBD
79.4%
79.5%
0.1%
Non-prime Area
70.0%
70.0%
0.0%
South Jakarta
76.4%
73.1%
-3.3%
Source: Colliers International Indonesia - Research
The main cause of the decreasing occupancy rate is the expiration of employment contracts, as reported by most apartment buildings. Another issue that likely affects the overall occupancy rate is tenants’ relocation from Jakarta to industrial areas, particularly apartment building that have a large number of Japanese tenants.
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
Occupancy Rate of Serviced Apartments and Nonserviced Apartments 100% 90%
Overall Rental Rate Based on Area Area
Rental rate (/sq m/month)
CBD
IDR 362,471
South Jakarta (incl. Non-prime)
IDR 211,067
Source: Colliers International Indonesia - Research
80% 70%
Rental Rate for Serviced Apartments
60%
Area
Rental rate (/sq m/month)
50%
CBD
IDR 434,488
40%
South Jakarta (incl. Non-prime)
IDR 337,351
Source: Colliers International Indonesia - Research
30% 20%
Rental Rate for Non-serviced Apartments
10%
Area
0% 2007
2009
2011
Non-serviced Apartment
2013
2015YTD
Serviced Apartment
Rental rate (/sq m/month)
CBD
IDR 227,439
South Jakarta (incl. Non-prime)
IDR 175,636
Source: Colliers International Indonesia - Research
Source: Colliers International Indonesia - Research
Rental Rates According to the Bank Indonesia regulation on the mandatory use of the rupiah (IDR) in every transaction within Indonesia, apartments for lease (both serviced and non-serviced) have started to charge rents in IDR since June of this year. So far, the response from expatriates has been quite positive. They welcome the regulation and so far there is no confusion among the companies from which the tenants originate. We found a case where apartments for lease, both serviced and non-serviced, are still using US dollars as the basis for rents because the majority of their tenants are expatriates who find it easy to conceptualise the number in US dollars. Despite quoting in US dollars, at payment time, it should be in rupiah and therefore there are some possible mechanisms to decide the basis for the conversion. This includes using a floating rate, a bookkeeping rate or a fixed rate. The widely applied system is the floating rate, which always refers to the prevailing exchange rate on the date of transaction. In our view, this floating rate system is similar to paying in US dollars because the amount of rupiah that the lessee has to pay is similar to the value of US dollars on the date of transaction. The other system is the booking rate, which is fairly similar to the floating rate, except that the rate is valid for one month ahead regardless of the daily fluctuation in the exchange rate. The latest system is the fixed rate where the value of conversion is contractual in advance for at least one year despite the volatility in the exchange rate.
10
Average Rental Rates (IDR/sq m/month) for Different Types of Apartments for Lease CBD Average Rent for all Leased Apartment
IDR 362,471
South Jakarta (incl. non-prime areas) IDR 211,067
Serviced Apartment
IDR 434,488
IDR 337,351
Non-serviced Apartment
IDR 227,439
IDR 175,636
Source: Colliers International Indonesia - Research
Concluding Thought In order to boost a sagging economy, the government has recently initiated some economic stimulus packages. Stimulus measures that are related to the property sector are foreign ownership of Indonesian property and a revision of the luxury tax regulations that will likely change the threshold to IDR10 billion for apartments to incur a 20% tax. These regulations are focused on attracting overseas capital to boost domestic growth and to spur new business. However, the proposal is not yet final, leaving uncertainty in the apartment market and likely leading to a further slow-down in sales in the upcoming quarter. Moreover, if there is no revision of the Super Luxury Tax there will be a conflict with the newly proposed luxury tax, since the price threshold for super-luxury (IDR5 billion) is lower than for luxury properties (IDR10 billion). All in all, the government needs to clarify the ruling to remove the uncertainties among investors and developers in the market.
Research & Forecast Report | 3Q 2015 | Apartment | Colliers International
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