Colliers Quarterly

Q3 2017
3 October 2017
Accelerating success.

GREATER JAKARTA | INDUSTRIAL ESTATE

Industrial Estate Industrial Land Supply

Land inventory issue in the eastern part of Greater Jakarta

Sector
may be resolved by the intense construction activity taking
place in some new industrial estates within the consortium
of Trans Hexa Karawang (THK). The THK consortium con-
sists of several major developers such as Gajah Tunggal,
Ferry Salanto Senior Associate Director | Research Salim, Artha Graha, Agung Podomoro and foreign devel-
oper CFLD.
This quarter, transaction volume reduced in number,
registering only 22.75 hectares from 67.31 in the previ- Gajah Tunggal Group developed GT Techpark @ Karawa-
ous quarter. Landlords opted to keep prices unchanged ng with a total gross area of around 400 hectares. Some of
in this particularly slow market. the plots were predominantly taken by companies of their
group or affiliated to the group. GT allocated around 100
Forecast at a glance hectares for the proving ground of their tyre product.

Demand Artha Graha Group, which holds a total of 390 hectares

The needs for logistics infrastructure were de- of land (or 273 hectares of saleable industrial land), de-
rived from other sectors such as manufactur- veloped Artha Industrial Hill. Thus far, two blocks are al-
ing, food, trading and even automotive. These ready available to sell, comprising a total of 73 hectares,
industries will continue to invigorate demand for of which around 5.2 hectares were sold to a Korean-based
industrial land and building, at least in the near textile company.
future.
This year, a giant Chinese developer, China Fortune Land
Supply Development (CFLD) formally acquired part of Agung
A significant amount of new land supplies will Podomoro land property with a total gross area of around
significantly come from the operation of several 205 hectares. CFLD named the estate as Karawang New
industrial estates within the consortium of Trans Industry City (KNIC) and will commence land cut, land fill
Hexa Karawang. The combination of six different and infrastructure works in Q4 2017. The KNIC comprises
companies composed a total of more than 2,100 three industrial clusters – automotive industry park, con-
hectares of land. Furthermore, the expansion of struction material park and logistics service industry park.
several existing industrial estates in other areas
in Karawang, as well as other operating estates Other operating industrial estates in Karawang holding
in Tangerang and Serang, will potentially provide a considerable amount of ready-to-use land for sale are
a substantial amount of land in the future. KIIC and Suryacipta. KIIC is now focused on selling their
latest stage of development totalling around 160 hectares,
Vacancy Rate whilst Suryacipta has approximately 70 hectares of land
If there is no significant new industrial land plot to sell. Further east, part of Kota Bukit Indah managed by
being introduced, vacancy rate would reduce Indotaisei has yet to start the expansion of their current
moderately by 2018. raw land (Phase 3), which could potentially provide more
than 200 hectares.
Rent
The shortage in land bank remains the main drawback for
Rental tariff of land and standard factory build-
the Bekasi region. Two estates stopped selling land parcel
ing remains unchanged and will likely stay by at
for more than 10 years, whilst other estates may find it
least the first semester of 2018.
difficult selling sporadic and small land parcels because
they do not have enough stock to sell. Only a few industrial
Price estates in Bekasi still have the ability to sell land in consid-
We do not anticipate price increase at least un- erable size, and some are even shifting in selling industrial
til the end of the year. Most industrial landlords buildings on small land plots due to land scarcity.
have so far indicated industrial land price will re-
main stable at least until the early part of 2018.
Industrial Land Stock Status in Some Active There are more active industrial estates selling land in
and Future Industrial Estates Bekasi than any other regions, including Jababeka, Delta
Silicon, Bekasi Fajar, GIIC and KITIC. Mainly due to the
4,000 lack of ready-to-use land, we have not recorded any trans-
action in MM2100 since early 2016. After reporting a signif-
3,500
icant transaction of around 20 hectares last quarter, Bekasi
3,000 Fajar has no transaction during this period. Similarly, GIIC
recorded the highest amount of sales last quarter, but only
2,500 registered 1.5 hectares this quarter from selling land to an
automotive vendor. Two estates including Jababeka and
2,000
Delta Silicon saw a moderate increase in sales volume
Hectares

1,500 QOQ. Jababeka reported multiple small transactions done

by trading, manufacturing, food processing, machinery and
1,000 auto parts companies, which accounted for only 0.6 hect-
are. Meanwhile, Delta Silicon reported a total of 2.93 hect-
500
ares (slightly higher than last quarter) from also relatively
0 small transactions involving industrial sectors such as the
Bogor Tangerang Karawang Bekasi Serang expansion of a distributor warehouse and workshop and
cold storages for fish and meat products. KITIC intended
Existing Stock Remaining Unsold Land to sell around 1.2 hectares to a company for warehouse
Potential Land To Be Developed purposes. Total sales in Bekasi was 6.23 hectares, as con-
Source: Colliers International Indonesia - Research
tributed by the four industrial estates.

The only transactions concluded in Tangerang this quarter

occurred at Griya Idola Industrial Park, selling three SFB
Demand units (warehouses for furniture and food, and pharmacy)
Sales volumes diminished this quarter, with so far a total and one land plot sold to a traditional medicine company
transaction of only 1/3 of last quarter’s sales, i.e., 22.75 with a total land size of about 6,605 sq m. Albeit small, Gri-
hectares. In 2017 YTD, however, total industrial land ab- ya Idola has showed consistent sales since it was launched
sorption accounts for about 82% of the total sales last year in 2015. On the other hand, Millennium industrial estate
of 144.1 hectares, suggesting that sales volume is still in experienced land stock issue that hindered them from sell-
line with the trend in 2016. There was no noteworthy trans- ing during the quarter.
action during the quarter, as sales recorded below 10 hect-
ares for one industrial estate. The last is Serang, with two active industrial estates. For
the last two consecutive quarters, Modern Cikande has
There was no big discrepancy amongst active industrial been selling less than two hectares for each period. We
regions (Bekasi, Karawang and Serang) in the number recorded two relatively small transactions totalling to 1.2
of land being absorbed. Two industrial estates registered hectares made by a local company in the transportation
two transactions including KIIC and the newly operating business and a Korean company in drum packaging. KIEC
Artha Industrial Hill. KIIC sold 3.5 hectares to the expand- reported a single but fairly big transaction to a building
ing German-based container system company. Meanwhile, material company of around six hectares. This was so far
Artha Industrial Hill concluded a single transaction of 5.16 the biggest transaction for KIEC in 2017, and it helped lift
hectares to a Korean-based textile company, which also the overall sales performance for the Serang region that
became the outset of their sales. These two transactions reached 7.20 hectares.
were so far the biggest in Karawang since 2013. For Kar-
awang, the total sales this quarter was so far the biggest The overall land transactions recorded in 2017 YTD were
compared to those in Q1 and Q2 2017. For some periods, mainly with food-related industries, reaching 42.41 hect-
two industrial estates, Suryacipta and KIIC, have been the ares or 29% of the total transaction, as well as automo-
main drivers for industrial transactions in Karawang. Go- tive-related industries with a total of 36.70 hectares (25%).
ing forward, however, transactions would seemingly come Demand for land for warehouse or logistics purposes was
from other new industrial estates located within THK. Artha somewhat reduced compared to last year. It only repre-
Industrial Hill is seemingly ready to offer their ready-to-use sents around 7% or 9.38 hectares thus far. If no single sig-
land. Meanwhile, Kota Bukit Indah (Indotaisei) has yet to nificant transaction would be made in the next quarter, the
report any transaction since the last one they recorded in composition of the active sector would remain the same.
2014. The classic land issue is still the main reason for the
absence of sales in this location. Total sales in Karawang
this quarter was registered at 8.66 hectares, the highest
compared with other regions.

2 Colliers Quarterly | 3 October 2017 | Greater Jakarta | Industrial Estate | Colliers International
Land Absorption in Q3 2017 Types of Activities Industries During 2017YTD
Metal Machinery Textiles
Krakatau Industrial Estate Logistics/ Packaging
2.51% 0.14% 3.58% Building
Cilegon Warehousing Material
0.76%
6.50% 5.20%
Artha Industrial Hill Manufacturing Energy
3.41% 4.16%
Chemicals
KIIC 2.60%
Steel-related
0.23% Others
Delta Silicon Pharmaceutic 15.18%
al
Greenland International 0.76%
Industrial Centre Plastics
0.11%
KITIC

Modern Cikande

Jababeka
Food &
Beverages
Griya Idola 29.41% Automotive
25.45%
0 1 2 3 4 5 6 7
hectares

Source: Colliers International Indonesia - Research Source: Colliers International Indonesia - Research

Annual Industrial Land Absorption Land Price

1,400
In line with the sluggish sales performance, industrial land-
1,200 lords decided to maintain prices. For some periods during
the current slow-moving market, prices have been relative-
1,000 ly flat. The overall price increase in Tangerang was mainly
due to the operation of Griya Idola that came to the mar-
800 ket in 2015 and they are offering a relatively higher price
compared to the other estates in the region. Bekasi still
Hectares

600
fetched the highest average price, for reasons that include
400
land scarcity, continued and stable enquiries, and the good
quality of overall industrial estates located in this region.
200
Increasing land price will not be an option particularly in the
0 short term. However, price increase may be possible for
estates with asking price below the average market, par-
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017YTD

ticularly when the enquiry volume rises and land availability

remains the issue.
Jakarta Bogor Tangerang Karawang Bekasi Serang

Source: Colliers International Indonesia - Research Industrial Land Prices and Maintenance Costs
(in USD equivalent)
maintenance costs
Land price (in USD/sq m)
(in usd/sq m/month)
region
lowest highest average lowest highest average

Bogor 120.00 300.53 210.26 0.06 0.06 0.06

Bekasi 180.32 240.42 219.80 0.06 0.08 0.07

Tangerang 150.26 187.83 194.09 0.03 0.08 0.06

Karawang 170.00 185.00 177.00 0.05 0.10 0.06

Serang 150.26 165.29 157.78 0.03 0.05 0.04

*1USD = Rp 13,330
Source: Colliers International Indonesia - Research

3 Colliers Quarterly | 3 October 2017 | Greater Jakarta | Industrial Estate | Colliers International
Greater Jakarta Industrial Land Prices Rental Market
USD250.00 Only a few industrial estates offer land or industrial building
USD225.00 for lease, including three industrial estates in Karawang,
namely Kota Bukit Indah (Besland Pertiwi), Suryacipta and
USD200.00
state-owned Kawasan Industari Kujang Cikampek; Cibi-
USD175.00 nong Centre Industrial Estate (CCIE) in Bogor and KIEC
USD150.00 in Serang.
USD/sq m

USD125.00
The average rents for industrial buildings in Karawang
USD100.00
ranged from IDR50,000 to IDR53,000 per sq m/month.
USD75.00 For Suryacipta, renting industrial buildings is also optional
USD50.00 and which is now offered at IDR70,000/sq m/month. Mean-
while, the leasing tariff for industrial building in Serang and
USD25.00
Bogor is similar at around IDR45,000/sq m/month.
USD0.00
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017YTD
Land is also available for lease in certain industrial es-
tates. In Karawang, the average cost for land leasing is
IDR13,500/sq m/month, whilst in Serang, the same ob-
Bogor Bekasi Tangerang Karawang Serang ject is offered for lease at an average of IDR15,000/sq m/
month. In Bogor, the tariff is relatively lower at IDR5,000/
Source: Colliers International Indonesia - Research
sq m/month.

This quarter, there was no leasing transaction recorded.

Maintenance Cost
For several years, maintenance tariff has remained un-
changed and will likely continue at least until the end of the Concluding Thought
year. The majority of industrial estates in greater Jakarta
The year-to-date overall transaction activities including
still quote the tariff in USD. The average service charge
land and SFB sales, as well as building and land leasing,
costs in Karawang, Bekasi and Bogor still remain the high-
have been weakening particularly in Q3 2017. Such condi-
est at an average of USD0.07 or around IDR875 – 900/sq
tion seems to continue particularly because the anticipation
m/month.
for big transactions that might occur by the end of the year
is low, and such pre-enquiries looking for industrial space
Greater Jakarta Industrial Maintenance Costs are relatively small to medium size, ranging from manufac-
turing industries and mainly for logistics purpose. Thus far,
USD0.10 the total transaction during the three quarters represents
USD0.09 82.5% of last year’s total sales, suggesting that sales per-
USD0.08 formance for this year might possibly catch up with that in
2016.
USD0.07
USD/sq m/month

USD0.06
USD0.05
USD0.04
USD0.03
USD0.02
USD0.01
USD0.00
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017YTD

Bogor Bekasi Tangerang Karawang Serang

Source: Colliers International Indonesia - Research

4 Colliers Quarterly | 3 October 2017 | Greater Jakarta | Industrial Estate | Colliers International
For more information:
Ferry Salanto
Senior Asociate Director | Research
+62 21 3043 6888
[email protected]

Copyright © 2016 Colliers International.

The information contained herein has been obtained from
sources deemed reliable. While every reasonable effort has
been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are
encouraged to consult their professional advisors prior to acting
on any of the material contained in this report.

Accelerating success.