27.

0% 464,1 2 3 - 69,858
A DOUBLE DIGIT SQUARE METERS OF SQUARE METERS OF
VA C A N C Y R AT E N E W S U P P LY I N T H E O V E R A L L TA K E U P
AS OF 1H 2021 PIPELINE UNTIL 2022 AS OF 1H 2021

Jakarta CBD Office

knightfrank.co.id/research
Market Overview
1H 2021

Fig 1: Jakarta CBD Office - Supply, Demand and Occupancy

1H 2016 - 1H 2021

8,000,000 100%
Semi-Gross Area in Sqm

6,000,000 95%

Occupancy Rate
4,000,000 80%

2,000,000 65%

0 50%
1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21

Existing Supply Cumulative Demand Occupancy Rate

Source: Knight Frank Research

Amid the prolonged pandemic, the market experienced its second consecutive

“A declining office market trend continued in slowdown period of negative net absorption at 69,858 square meters in the first
favor of tenants despite the economic rebound half of 2021, weighed down by downsizings, consolidations and closures. As a
of 7.07% (yoy) in the second quarter of 2021. result, it drove down the overall occupancy at a record low level since 2003,
Rising cases since June caused by new Covid-19
variants will hinder the recovery, facing a risk decreasing to 72.9% and leaving a total of 1,889,633 square meters of vacant
of fast-surging second wave.” spaces. Several large companies in the insurance, technology, hospitality,
travel and retail sectors have reduced spaces for cost efficiencies.

Office Market Update Fig 2: Distribution of Net Absorption by Grade 1H 2021

As of the first half of 2021, the cumulative total office stock in the 10,000
Jakarta CBD increased slightly by 1.4% compared to the previous 0 -26,415 137 -45,307 1,727
period last year to 6,995,471 square meters with only one new
-10,000
in Sqm

completed project (RDTX Place) entering the market. The rental

-20,000
office stock was posted at 4,857,169 square meters of which 25%
-30,000
was Premium Grade A, 61% was Grade A, 13% was Grade B and 1%
-40,000
was Grade C. Approximately 67.5% or 464,123 square meters of the
-50,000
total new office supply in the pipeline until 2022 are expected to
enter the market in the second half of 2021 despite a slower
Premium A A B C
construction progress.
 A few of large co-working players have been reducing their spaces
Fig 3: Jakarta CBD Office - Average Gross Rental in US$ by seeking to sublease and early terminations or rental/lease period
1H 2016 - 1H 2021 renegotiations with landlords. Overall, occupational inquiries
remained weak. Leasing transactions during the first half of 2021
45,00
included companies coming from the E-Commerce, Information

40,00 Technology (IT) and Financial Technology (Fintech) sectors.

35,00 The total average asking base rental in Rupiah terms continued to
decrease by 7.1% (yoy) to Rp246,623 per square meter per month in
in US$/Sqm/Month

30,00
the first half of 2021, the lowest level since 2013. Meanwhile, Grade
C buildings experienced the highest average asking base rental
25,00
drop of -17.2% (yoy) in Rupiah terms. Strata-title office buildings
20,00 were also under pressure with the average asking price of overall
CBD strata-title office buildings in the first half of 2021 decreased
15,00 by 2.6% (yoy) in Rupiah terms to Rp48.9 million per square meter
and 4.2% (yoy) in U.S. Dollar terms to US$3,366 per square meter.
10,00

5,00
With the continuation of a flight to quality trend, leading active

1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 tenants stayed to favor new supply and best-in-class options
(including efficient floor plates, green building certification,
Premium Grade A Grade A Grade B Grade C
tech-enabled and wellness-enhancing specifications) which offer
attractive rental incentives to upgrade and plenty of prime choices.

In response to the pandemic, a hybrid workplace model

(office-based and remote working) may become the most prevalent
and it is expected to be the trend as flexible work options. Increased
Fig 4: Jakarta CBD Office - Annual Absorption
occupational health safety driven by hybrid workforce models,
2016 - 1H 2021
which adopt both the physical and digital domains, will define the
200,000 workplace in the foreseeable future.

155,177
150,000
Companies are expected to continue in a wait-and-see mode with
122,038 118,822
their new set-up and long-term expansion plans until there is more
100,000
clarity in the post-pandemic market. A faster vaccine rollout to
in Sqm

69,588
control the second wave of outbreak, accelerated spending and
50,000
28,814 extended tax breaks to boost the economy are greatly-needed to
survive the downturn.
0

50,000
“Leading active tenants continued
-69,858 to search for high specification
-100,000
2016 2017 2018 2019 2020 1H 2021
new office buildings in
prime CBD locations”
Note: pledges made after publication of manifestos are included where possible

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