JAKARTA PROPERTY MARKET REPORT

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1 Colliers Quarterly Q4 21 March JAKARTA PROPERTY MARKET REPORT Accelerating success.

2 Colliers Quarterly JAKARTA OFFICE Q4 21 March An Improving level of inquiries, but rents are still depressed Ferry Salanto Senior Associate Director The soaring vacancy rates, which are in line with the continued completion of more new office buildings, have changed the recent tenant market situation. However, the overall market performance has indicated a sign of recovery, albeit moderately, with escalating enquiries for office expansion particularly from tenants exploiting the currently low rents. In, Indonesia will move ahead with a 5.3% GDP projection, which will provide an interesting investment spot for overseas fund to come in, particularly in e-commerce and co-working business at least for the next two to three years. Forecast at a glance Demand Tenants will make the most of the currently low rental rates and the large number of available office spaces. We expect to see expansion and relocation activities in, particularly from startup companies and co-working space operators. Supply The additional office supply in (CBD and outside the CBD) is estimated to reach nearly 900,000 sq m to bring the cumulative supply to over 10 million sq m by the end of. Sudirman remains the preferred commercial area in the CBD with annual supply projection reaching about 530,000 sq m in. Vacancy rate The vacancy rate in the CBD will likely hit above 20% in, whilst vacancy in office buildings outside the CBD is projected to stay over 15%. CBD Rent Taking into consideration the supply and demand factors, we estimate a moderate rental adjustment outside the CBD to go up by 2-2.5% in. Meanwhile, the buildings in the CBD will experience more pressure from the upcoming huge supply, which may halt the growth of asking rental rate in the CBD. Price The expectation of higher rental rates may motivate more office purchasers. However, with a slight projection for rental increase, we believe that the initial impact on price may be limited to a 5% increase in. Office Space for Lease Supply Thus far, with nine new office buildings totalling to 501,927 sq m officially beginning operation, the annual supply in has been the highest. After calculating supply reduction from the demolition of Wisma Sudirman, cumulative supply in the CBD was registered at 5.9 million sq m, reflecting a 9% growth YOY. According to future office buildings completion schedule, will still anticipate large quantities of space from at least 10 office buildings, for a total of about 630,000 sq m.

3 E 2019E 2020E E 2019E 2020E E 2019E 2020E Thamrin Sudirman Rasuna Said Mega Kuningan Gatot Subroto Satrio NEWLY OPERATING OFFICE BUILDING IN OFFICE BUILDING LOCATION SGA (SQ M) COMPLETION TIME MARKETING SCHEME Convergence HR Rasuna Said 36,367 Q1 For Lease & Sale Menara Pertiwi Mega Kuningan 41,456 Q1 For Sale Satrio Tower Satrio 31,604 Q1 For Lease Tokopedia Tower Satrio 70,000 Q2 For Lease & Sale Sopo Del Tower A Mega Kuningan 64,000 Q2 For Lease & Sale Telkom Landmark Tower II Gatot Subroto 65,000 Q3 For Lease Menara Palma 2 HR Rasuna Said 50,000 Q4 For Lease Pacific Century Place Tower Jend. Sudirman 90,500 Q4 For Lease Mangkuluhur Tower Gatot Subroto 53,000 Q4 For Lease & Sale Cumulative Supply 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, is approximately 560,000 sq m or 49.6% of the total stock in that period. Annual Supply by Sub-market ( - E) 750, , , , ,000 0 Existing Supply Additional Supply Future Supply Annual Supply 700, , , , , , ,000 0 E Annual Supply Based on Marketing Scheme 500, , , , ,000 0 Additional Supply Future Supply Currently, only 24% of the total office stock is strata-title space for sale, with the highest growth recorded in and. The total size of office spaces for sale in For Lease For Sale 2 Colliers Quarterly 21 March Office Colliers International

4 NEW PIPELINE OFFICE BUILDING LOCATION SGA (SQ M) MARKETING SCHEME STATUS DEVELOPMENT The Tower Gatot Subroto 56,492 For Sale Under Prosperity Tower SCBD 71,545 For Sale Under Treasury Tower SCBD 139,000 For Sale Under Revenue Tower SCBD 40,000 For Lease Under Sequis Tower SCBD 78,000 For Lease Under Sudirman 7.8 (Tower 1) Sudirman 52,000 For Sale Under Menara Astra Sudirman 80,000 For Lease Under World Capital Tower Mega Kuningan 72,000 For Lease & Sale Under World Trade Centre 3 Sudirman 70,000 For Lease Under 2019 Sopo Del Tower B Mega Kuningan 24,300 For Sale Under Lippo Thamrin Office Tower MH Thamrin 16,500 For Sale Under T Tower Gatot Subroto 24,000 For Lease & Sale Under Thamrin Nine MH Thamrin 97,500 For Lease Under 2020 Millenium Centennial Tower Sudirman 93,588 For Lease Under Social Security Tower HR Rasuna Said 23,500 For Lease Under Graha Binakarsa HR Rasuna Said 20,000 For Lease Under Chitaland Satrio 90,000 For Lease Under Indonesia Satu North Tower MH Thamrin 43,000 For Lease Under Indonesia Satu South Tower MH Thamrin 88,500 For Lease Under Gayanti City Gatot Subroto 25,000 For Lease Under Demand With a continuing weakening trend, average occupancy rate edged down moderately QOQ to 82.6%, or a decline of about 2.2% YOY. This approximately left around 1 million sq m of vacant space as at the end of. Of the total 359,104 sq m of new office spaces available in, about 47% has been absorbed, thanks to several prominent companies such as Tokopedia, Hanabank, BCA, Excelcomindo and Garena, amongst others that have become major tenants of new office buildings that started operation in. Annual Vacancy and GDP Growth 25% 20% 15% 10% 5% 0% E Vacancy GDP Growth and Indonesia Statistics 3 Colliers Quarterly 21 March Office Colliers International

5 E Pre-Committed Absorption at Office Building for Lease in E rent stabilised and was registered at IDR292,374/sq m/month. Average Asking Rents and Occupancy Rates F 100% 90% 80% 70% 60% IDR400,000 IDR320,000 IDR240,000 IDR160,000 IDR80, , , , ,000 50% IDR0 Space absorbed (sq m) Space unabsorbed (sq m) Occupancy Rates Based on Building Grade 100% 90% 80% 70% 60% Most future office buildings in Sudirman that are scheduled for operation in are quite sanguine in offering rents above the average market rates. This will create a counterbalance for the market in anticipation of a large upcoming supply and expectedly, average rent would stay relatively flat in. Asking Rents Based on Building Grades IDR800,000 Occupancy Base Rental 50% Premium Grade A Grade B Grade C IDR700,000 IDR600,000 Nowadays, due to exorbitant land value, any new commercial building in the CBD should be built in accordance with Grade A or above specifications in order to meet investment viability. Having said that, for the last couple of years, every new building in the CBD has always been Grade A or Premium Grade building, which led to an increase in vacancy, particularly during this tenants market condition. The overall occupancy rates for Grade A and Premium Grade office buildings still registered at around and below 80% respectively. With supply projection being dominated by high grade office buildings, the occupancy for these high grade buildings will further decline in. Rents The declining occupancy trend added more pressure to landlords in setting higher rental tariff. From Q3 to Q3, rental rates fell by almost 15%. In this quarter, IDR500,000 IDR400,000 IDR300,000 IDR200,000 IDR100,000 IDR0 Service Charges Premium Grade A Grade B Grade C Since the beginning of, service charges have been relatively stable in the CBD. Four newly operating office buildings in quote their tariffs above market average, but this only pushes less than 1% increase YOY to IDR79,883/sq m/ month. We anticipate a relatively stable figure with the expectation that existing buildings will maintain their maintenance cost in. Service charges will range between IDR50,000 and IDR115,000/sq m/month next year. 4 Colliers Quarterly 21 March Office Colliers International

6 Rasuna Said Satrio Thamrin Mega Kuningan Sudirman Gatot Subroto Service Charges Based on Marketing Scheme IDR200,000 Pre-Committed Absorption of Office Building for Sale in E IDR160,000 IDR120,000 IDR80,000 IDR40,000 E IDR0 Office For Lease Strata-Title Office 0 100, , , , ,000 Strata-title Currently, 86% of the total 1.7 million sq m strata-title office supply (including those under construction) was already sold. However, the annual absorption in was 30% lower than those in. This also impacts the average price, which was stuck at IDR55.5 million/sq m in, similar to the previous year. Space absorbed (sq m) Space unabsorbed (sq m) Interest Rates and Office Yield 10% 8% 6% Average Asking Prices in the CBD Based on Area IDR80,000,000 IDR60,000,000 4% 2% 0% IDR40,000,000 Yield Interest Rates IDR20,000,000 IDR0 The overall high vacancy in the office market, which led to the declining rental trend, may hold buyers/investortype of buyers to purchase new strata-title office spaces, and thus we anticipate asking prices to grow only moderately in. 5 Colliers Quarterly 21 March Office Colliers International

7 E 2019E 2020E E 2019E 2020E East North West Central South TB Simatupang Outside the CBD Office Spaces Offered for Lease Supply The number of new office supplies in in other areas outside the CBD was lower than in the previous year; only three new office buildings totalling around 96,000 sq m. The cumulative supply is therefore recorded at 3.1 million sq m as at the end of, reflecting 5% growth YOY. Cumulative Supply 4,000,000 All regions outside the CBD had actively contributed new office stocks from 2015 to, except East. For the last 20 years, there have been no operating commercial office buildings in East. The ongoing LRT (Light Rail Transit) construction that connects some parts of East to the city centre may trigger office development, particularly those close to the LRT stations. Annual Supply Based on Region 200, , ,000 50, ,000,000 2,000,000 1,000,000 0 E Existing Supply Additional Supply Future Supply The increase in office stock will be quite significant in and Twelve future office buildings are expected to complete construction to bring about 270,000 sq m of new supply in. The large amount of supply projection in is more due to the postponement of several office buildings that were supposed to have started operation in. Annual Supply 700, , , , , , ,000 0 Additional Supply Future Supply The provision of advanced public transport facilities and the growing infrastructure development will serve as catalyst for the office market to expand, mainly to nontraditional commercial areas in. The development of offices in West proves this. Having large and available land stock, the operation of toll roads connecting the south-north and Tangerang areas drove land owners to build office buildings, the number of which has escalated by almost 30% over the last three years. LRT corridor 4 will also be developed in West connecting Puri Kembangan and Tanah Abang along 9.3 kilometres, as stated in the Urban Train Network Map of Jabodetabek 2020 prepared by DKI Provincial Government. Therefore, we predict that the growth of the office market in West will continue going forward. As one of the most active areas in contributing office spaces in South, TB Simatupang already represents 57% of the total supply in South itself or 30% of the total supply outside the CBD. Nevertheless, the growth of office supply in TB Simatupang has been declining in the last three years, mainly triggered by a slowing demand in Future office stock in TB Simatupang will be relatively limited in Colliers Quarterly 21 March Office Colliers International

8 NEWLY OPERATING OFFICE BUILDING IN OFFICE BUILDING LOCATION SGA (SQ M) COMPLETION TIME MARKETING SCHEME Puri Indah Financial Tower Puri Indah 38,500 Q1 For Lease & Sale Gallery West Kebon Jeruk 29,000 Q4 For Lease & Sale Puri Matahari Tower Kembangan 28,925 Q4 For Lease NEW PIPELINE IN OUTSIDE CBD (EXCLUDE TB SIMATUPANG) OFFICE BUILDING LOCATION SGA (SQ M) MARKETING SCHEME STATUS DEVELOPMENT Tamansari Parama KH Wahid Hasyim 10,800 For Sale Under One Belpark Office Pondok Labu 17,800 For Lease Under St Moritz Office Tower Puri Indah 19,500 For Sale Under BKP Office Tower Sunter 16,000 For Lease Under Hermina Office Building Kemayoran 20,000 For Sale Under Soho Pancoran Pancoran 30,000 For Sale Under One Tower Kemayoran 21,400 For Sale Under Ciputra International Puri 1 Phase 1 Puri 15,000 For Lease Under Ciputra International Puri 2 Phase 1 Puri 20,000 For Lease Under Arcade Business Center Pluit 22,000 For Lease Under 2019 MNC Tower II Kebon Sirih 60,000 For Lease Under Box Tower Kebon Sirih 36,000 For Lease Under The Kasablanka Casablanca 80,000 For Lease Under Ciputra International Puri 3 Phase 1 Puri 30,000 For Lease Under Ciputra International Puri Phase 2 Puri 15,000 For Lease In Planning Ciputra International Puri 1 Phase 3 Puri 15,000 For Lease In Planning Ciputra International Puri 2 Phase 3 Puri 15,000 For Lease In Planning 2020 Ciputra Twin Tower 1 Kemayoran 40,000 For Sale Under Ciputra Twin Tower 2 Kemayoran 40,000 For Lease Under Agung Sedayu Office Tower Pantai Indah Kapuk 50,000 For Lease In Planning 7 Colliers Quarterly 21 March Office Colliers International

9 E 2019E 2020E NEW PIPELINE IN TB SIMATUPANG OFFICE BUILDING SGA (SQ M) MARKETING SCHEME STATUS DEVELOPMENT The Sima 60,000 For Lease Under 2019 Arkadia Tower G 30,000 For Lease Under Beltway Office Park Tower 4 30,839 For Lease In Planning 2020 The Manhattan Square Tower 2 39,375 For Lease & Sale In Planning Annual Supply Based on Marketing Scheme 300, , ,000 Occupancy Rates 100% 90% 80% 150, ,000 50, % 60% 50% For Lease For Sale Outside the CBD excluding TB Simatupang TB Simatupang Demand and Occupancy After a slight decline to 81.9% in Q1, occupancy climbed gradually and is now registered at 83.7%. Most operating office buildings maintained their tenants, as it was in, and the good performance of newly operating office buildings also helped bring average occupancy to rise modestly by 1.6% YOY. The challenge of the office market outside the CBD remains to be the anticipated large future supply in. Occupancy rate will drop by about 2% in. Information and Technology (IT), Insurance, and Banking still generate significant demand for new office buildings outside the CBD, especially in Central and South. The western and northern regions will continue to benefit from the proximity and immediate access to the airport or seaport, to which the freight forwarding and shipping companies will expand their operation. Pre-Committed Absorption of Office Building for Lease in E E 0 50, , , ,000 Space Absorbed (sq m) Spaces Unabsorbed (sq m) As the most active areas in contributing office spaces, the continuing influx of new office buildings has inevitably led to declining occupancy in West and South in the last two years. Three office buildings that 8 Colliers Quarterly 21 March Office Colliers International

10 Central North East West South TB Simatupang began operation caused occupancy rate in West to fall 6.5% YOY to 82% in. Conversely, after recording a drop in the previous year, occupancy rate climbed from 5.5% to 81.7% in South in. Today, less than 5% of the total office buildings in South recorded occupancy rates below 50%; most of these are small buildings located in TB Simatupang and thus did not change the overall occupancy calculation. The average occupancy rate in TB Simatupang currently stays at 77.3%. YOY Occupancy Rates Based on Area Average Asking Rents IDR300,000 IDR250,000 IDR200,000 IDR150,000 IDR100,000 IDR50,000 IDR % 90% Outside CBD excluding TB Simatupang TB Simatupang 80% 70% Range of Asking Base Rents Based on Region 60% IDR400,000 50% Central South North East West IDR300,000 IDR200,000 IDR100,000 IDR0 Rents Rent is very much impacted by the addition of new office buildings charging higher occupancy. To date, the average rent for office buildings outside the CBD was recorded at IDR227,826/sq m/month, which is a modest increase of 4.6% QOQ. On the back of relatively stable demand going forward, rent may climb in, albeit in a slow pace of around 2-2.5%. Excluding West, all areas underwent an increase in rental rates, with South as still the most expensive area outside the CBD. Rents in TB Simatupang moved upward by 6.8% to IDR249,883/sq m/month. In line with improving occupancy rate, the average rent at TB Simatupang is projected to grow % in. Service Charges As at the fourth quarter of, average service charges were recorded at IDR55,679/sq m/month outside the CBD, reflecting a 3.3% YOY drop. Compared to other regions, South continues to capture the most expensive maintenance cost, due to the overall quality specification of the buildings, mainly those located in TB Simatupang. 9 Colliers Quarterly 21 March Office Colliers International

11 E Range of Service Charges Based on Marketing Scheme Pre-Committed Absorption at Office Building for Sale in E IDR150,000 IDR125,000 IDR100,000 IDR75,000 IDR50,000 E IDR25,000 IDR0 Office For Lease Strata-Title Office 0 30,000 60,000 90, ,000 Space Absorbed (sq m) Spaces Unabsorbed (sq m) Strata-title Price of strata-title office buildings outside the CBD rose modestly by 2.3% YOY to an average of IDR36.3 million/sq m. Average Asking Price IDR50,000,000 IDR40,000,000 IDR30,000,000 IDR20,000,000 IDR10,000,000 IDR0 Concluding Thought Given the sluggish economy and current oversupply, tenants will continue to be price-sensitive at least in one or two years. They are now exploiting the circumstances and trying to obtain office spaces at relatively low prices but still with good quality. So, even with the fact that landlords will have low expectations over price or rent to grow, at least market will have the opportunity to absorb the abundant supply, despite the low rent. Outside CBD excluding TB Simatupang TB Simatupang Outside the CBD, there are about 175,000 sq m of unabsorbed/unsold spaces, 25% of which are located in TB Simatupang. Average asking prices in TB Simatupang decreased by 4.9% YOY to IDR32.8 million/sq m, most likely because some office buildings are offering prices lower by 5-15%. Looking ahead, price will probably increase, given the absence of new stratatitle buildings at least up to the next two years. 10 Colliers Quarterly 21 March Office Colliers International

12 For more information: Ferry Salanto Senior Associate Director Contributors: Eko Arfianto Senior Manager Research Copyright 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. 11 Colliers Quarterly 21 March Office Colliers International

13 Colliers Quarterly JAKARTA APARTMENT Q4 21 March Ferry Salanto Senior Associate Director Indonesia's on-going massive infrastructure development had attracted overseas developers, especially from Japan, China, Singapore and other Asian countries. Local property developers, such as Sinar Mas Land, Intiland Development, Alam Sutera and Sentul, have already benefitted from the inflow through the establishment of JVs and collaboration with several foreign developers. We believe this situation will improve further as many institutions forecast Indonesia s economy to grow and be better in. In our view, the government policy is likely to be more populist next year as we are approaching election years and Anything to be decided, such as raising electricity tariffs and gas and subsidised fuel prices, which may increase living costs, are likely to be the last option, we believe. Moreover, compared to alternative investments, residential properties, particularly apartments, generate relatively high yields with lower risks. Gold and benchmark currencies such the US dollar are conventionally considered the safest method of hedging in. However, both have generated marginal or even negative returns in recent years. Apartment yields are relatively similar to commercial bank deposit rates. This helps maintain investment appeal to local buyers who still perceive property as safer than bank deposit. Forecast at a glance Demand We believe that next year, sales will be supported by real homebuyers rather than investors. Furthermore, we expect the average take-up rate to increase modestly by 2-3% from now, to be at 87-88% level by the end of. Rent With vacancy creeping up in the serviced apartment market, landlords are likely to remain conservative in rental negotiation. Coupled with downgrading trends in the market, we expect the average rent to increase modestly, in the range of 2-3% for the entire. Price In, we do not foresee much improvement in demand and the number of incoming apartments that are targeted to end-users. Therefore, we project the average apartment price would increase modestly, a little bit higher than s by 5% to 6%, to IDR million /sq m. Strata-title Apartment Supply With the completion of eight new apartment projects consisting of 3,181 units, the cumulative supply of apartments in increased by 1.8% QOQ or 4.6% YOY to 184,293 units. The annual supply in reached 8,115 units, the lowest in the last seven years, which account for 21,167 units. Such situation happened mainly due to soft absorption that may lead to the financial issue and thus delay delivery of the projects. Looking ahead in -2020, the market will receive 62,116 units, which is a substantial number, bringing apartment inventory in to exceed 246,000 units in Supply The market will receive an additional of 62,116 units from 104 projects: 32,429 units in, 15,602 in 2019 and 14,085 in 2020.

14 COMPLETED APARTMENT PROJECTS DURING Q4 APARTMENT NAME LOCATION REGION DEVELOPER NAME NO. OF UNITS Green Signature Apartment Jl. MT Haryono East Pikko Group 840 Pluit Seaview (Tower Belize) Pluit North Binakarya Propertindo Group 300 Menteng Park (Diamond Tower) Jl. Cikini Raya Central Agung Sedayu Group 756 Lexington Residence (The Tower) Pondok Pinang South Cowell Development 275 The Aspen Peak at Admiralty (Tower C) Jl. Fatmawati South PT. Harmas Jalasveva 322 Capitol Suites Jl. Prapatan Raya Central The Capitol Group 327 Lexington Residence (La Terrase) Jl. Deplu Raya South Cowell Development 111 Wang Residence Jl. Panjang West PT. Citicon Propertindo 250 NEWLY LAUNCHED APARTMENT PROJECTS DURING Q4 APARTMENT NAME LOCATION REGION EXPECTED COMPLETION YEAR ESTIMATED PRICE/SQ M NO. OF UNITS Kasamara Residence Jl. Kesehatan Raya South 2020 IDR36-38mio 151 Arumaya Simatupang Jl. Kartini South 2021 IDR35-36mio 289 Solterra Place Apartment Jl. Condet Pejaten South 2021 IDR28-29mio 521 Simprug Signature (Thames Tower) Jl. Ciledug Raya South 2021 IDR20mio 544 Cleon Mansions Garden City East 2021 IDR14-16mio 613 Optimism remains and is highlighted by sustainable apartment construction over the next few years. Five projects were launched in Q4 with a total potential stock of 2,118 units, showing a 30% growth, compared to the previous quarter. With about 10 million people, the majority of which are in their productive age, presents huge market potential for residential developers and investors. Through JV and outright purchases, many overseas investors have decided to partner with local developers to share risks and increase their funds, as both local and foreign developers recognise the importance of having local knowledge and foreign capital, as well as expertise to boost the marketability of their projects. is transforming its transportation system into a Transit-Oriented Development (TOD) concept, which advocates property development along mass transit stations. The aim of this transportation system is to encourage citizens to walk and use public transportation whilst dissuading the ownership of automobiles. We think that TOD will be the future in urbanisation, and that it will have a major impact on various sectors. Moreover, properties near transit hubs can have significant capital appreciation, for example 10% in China and Thailand, and 32% in Hong Kong. Nonetheless, the appreciation of property price is supposed to be non-equitable and quite higher at the exit points of city spots. 2 Colliers Quarterly 21 March Apartment Colliers International

15 NEW PIPELINE APARTMENT NAME LOCATION REGION DEVELOPER NO. OF UNITS DEVELOPMENT STATUS Sudirman Suites Jl. Jend. Sudirman CBD Pikko Group 380 Under Casa Domaine Jl. Jend. Sudirman CBD Lyman Group 186 Under The Suites Satrio Jl. Prof. Dr. Satrio CBD Ciputra Group 200 Under Gayanti City (2 Towers) Jl. Gatot Subroto CBD PT Buana Pasifik International 598 Under Verde Two (Tower West) Jl. HR Rasuna Said CBD Farpoint Realty 152 Under Anandamaya Residences (3 towers) Jl. Jend. Sudirman CBD Hongkong Land 500 Under Lavie Jl. Denpasar Raya CBD Wilsor Group 302 Under Regent Residences (tower 1) Semanggi CBD PT Kencana Graha Global 100 Under The Elements Epicentrum (2 Towers) T - Plaza Residence (Tower A & C) Jl. HR Rasuna Said CBD Sinarmas Land 372 Under Jl. Penjernihan Central PT Prima Kencana 614 Under Royal Suites Kemayoran Central Springhill Golf Group 450 Under The H Residence Kemayoran (Amethyst) Jl. Rajawali Selatan Central Hutama Karya Realtindo 800 Under Signature Park Grande Jl. MT. Haryono East KSO Fortuna Indonesia (Pikko) 1,100 Under Bassura City (Tower Jasmine Jl. Basuki Rahmat East Synthesis Development 2,000 Under Bassura City (Tower Heliconia) Jl. Basuki Rahmat East Synthesis Development 700 Under Regatta London Tower Jl. Pantai Mutiara North Intiland Development 186 Under Pluit Seaview (Tower Ibiza) Pluit North Binakarya Propertindo Group 500 Under Gold Coast Apartment (Atlantic Tower) The Kensington Royal Suites (4 Tower) Pantai Indah Kapuk North Agung Sedayu 568 Under Kelapa Gading North Summarecon 790 Under LA City Apartment (Tower A) Jl. Raya Lenteng Agung South Pancanaka Samaktha 980 Under Nine Residence Warung Buncit South PT Lippo Karawaci 246 Under Pakubuwono Terrace Grand Tower Kebayoran Lama South PT Selaras Mitra Sejati 435 Under District 8 (Tower Eternity) Jl. Senopati South Agung Sedayu 400 Under District 8 (Tower Infinity) Jl. Senopati South Agung Sedayu 280 Under Izzara Apartment (South and North Tower) Jl. TB Simatupang South Grage Group 542 Under Bellevue Place Jl. MT Haryono South Gapura Prima 240 Under One Casablanca Residence Jl. Palbatu South Forza Land 215 Under The Foresque Jl. Pasar Minggu South PT Griya Karunia Sejahtera (Binakarya Propertindo Group) 660 Under The Langham Residences Jl. Senopati South Agung Sedayu 57 Under continued 3 Colliers Quarterly 21 March Apartment Colliers International

16 APARTMENT NAME LOCATION REGION DEVELOPER NO. OF UNITS DEVELOPMENT STATUS continuation The Aspen Peak at Admiralty (Tower D) Casa Grande Residence 2 (Tower Angelo) Casa Grande Residence 2 (Tower Bella) Casa Grande Residence 2 (Tower Chianti) Pondok Indah Residences (3 Towers) Jl. Fatmawati South PT Harmas Jalasveva 322 Under Jl. Casablanca South Pakuwon Group 350 Under Jl. Casablanca South Pakuwon Group 350 Under Jl. Casablanca South Pakuwon Group 350 Under Pondok Indah South Metro Pondok Indah 880 Under Selatan 8 (Tower Prabu) Jl. Raya Ulujami South Karya Cipta Group 344 Under Pakubuwono Spring (2 towers) Jl. Teuku Nyak Arief South PT Simprug Mahkota Indah (Agung Podomoro Group) 545 Under Branz Simatupang (2 tower) Jl. TB Simatupang South Tokyuland 381 Under Synthesis Residence Kemang (3 towers) Jl. Ampera Raya South Synthesis Development 1,100 Under Gianetti Apartment Jl. Kebon Jeruk Raya West Bangun Investa Graha 500 Under St Moritz (The New Ambassador Suite Tower) Jl. Puri Indah Kembangan West PT Lippo Karawaci 200 Under Gallery West Jl. Panjang West AKR 280 Under Puri Mansion Apartment (Tower Amethyst) Jl. Lingkar Luar Barat West Agung Sedayu Group 900 Under Puri Orchard (Cedar Heights tower) Puri Orchard (Magnolia Spring tower) Jl. Raya Adicipta West PT Adicipta Graha Kencana (Serenity Group) Jl. Raya Adicipta West PT Adicipta Graha Kencana (Serenity Group) 1,050 Under 544 Under Vittoria Residence (3 tower) Jl. Daan Mogot West PT Duta Indah Kencana 1,100 Under Taman Anggrek Residence (6 towers) Ciputra International Puri Indah (Tower Amsterdam) Jl. Tanjung Duren West Agung Sedayu 3,000 Under Jl. Lingkar Luar Barat West Ciputra Group 412 Under Grand Madison Park Jl. Tanjung Duren West Agung Podomoro Group 300 Under Citra Lake Suites (Tower Rosewood) Citra Lake Suites (Tower Greenwood) Citra Lake Suites (Tower Oakwood) Citra Lake Suites (Tower Sherwood) Ciputra International Puri Indah (Tower Barcelona) Puri Mansion Apartment (Tower Crystal) Jl. Raya Kresek West Ciputra Group 104 Under Jl. Raya Kresek West Ciputra Group 126 Under Jl. Raya Kresek West Ciputra Group 117 Under Jl. Raya Kresek West Ciputra Group 122 Under Jl. Lingkar Luar Barat West Ciputra Group 335 Under Jl. Lingkar Luar Barat West Agung Sedayu 700 Under West Vista (2 towers) Jl. Lingkar Luar Barat West PT Harapan Global Niaga 2,840 Under continued 4 Colliers Quarterly 21 March Apartment Colliers International

17 APARTMENT NAME LOCATION REGION DEVELOPER NO. OF UNITS DEVELOPMENT STATUS continuation Citra Living Apartment (Somerset Tower) Citra Living Apartment (Orchard Tower) Jl. Citra 7 West Citra Mitra Graha KSO 312 Under Jl. Citra 7 West Citra Mitra Graha KSO 312 Under 2019 South Hill Jl. Denpasar Raya CBD Dua Mutiara Group 611 Under The Residences at The St. Regis Jl. HR Rasuna Said CBD Rajawali Property Group 164 Under Arandra Residence Jl. Cempaka Putih Raya Central Gamaland 687 Under Sudirman Hill Residence Jl. Karet Pasar Baru Barat Central PT Muliaguna Propertindo Development 299 Under Menara (Tower Equinox) Kemayoran Central Agung Sedayu 396 Under Menara (Tower Azure) Kemayoran Central Agung Sedayu 860 Under The Linq Kemayoran (2 towers) Kemayoran Central KG Global 1,020 Under Menteng 37 Jl. Menteng Central Pikko Group & Wijaya Wisesa (JV) 99 Under Sentra Timur Residence (Tower Safir) Pulogebang East Bakrieland Development 605 Under Pluit Seaview (Tower Bahama) Pluit North Binakarya Propertindo Group 650 Under Regatta Apartment (Tower New York) Pantai Mutiara North Intiland Development 186 Under Sedayu City (Tower Melbourne) Jl. Pegangsaan Dua Raya North Agung Sedayu 912 Under Jaya Ancol Seafront - Oceana Tower Ancol North Jaya Ancol 524 In Planning Orient Residence Jl. Yos Sudarso North PT Tri Raton Mega 225 Under Gold Coast Apartment (Bahama Tower) Gold Coast Apartment (Carribean Tower) Gold Coast Apartment (Honolulu Tower) Pantai Indah Kapuk North Agung Sedayu 600 Under Pantai Indah Kapuk North Agung Sedayu 600 Under Pantai Indah Kapuk North Agung Sedayu 600 Under La Foret Vivante Permata Hijau South PT Mahkota Properti Indo Permata 253 In Planning 45 Antasari (2 Towers) Jl. P. Antasari South Cowell Development 1,924 Under Arzuria Apartment Jl. Tendean South Tolaram Group 210 Under Fatmawati City Center - Corona Park Suite Tower Jl. Fatmawati South Agung Sedayu 620 Under Ratu Prabu 3 Residences Jl. TB Simatupang South PT Ratu Prabu Tiga 61 Under Samara Suites Jl. Gatot Subroto South Synthesis Development 300 Under Lavish Kemang Residence Jl. Kemang Raya South PT Kemang Karya Utama 474 Under continued 5 Colliers Quarterly 21 March Apartment Colliers International

18 APARTMENT NAME LOCATION REGION DEVELOPER NO. OF UNITS DEVELOPMENT STATUS Permata Hijau Suites Jl. Raya Kebayoran Lama continuation South PT Palmerindo Properti 649 Under TBS Tower Apartment Jl. TB Simatupang South PT Mahkota Asia Graha 162 Under Kasamara Residence Jl. Kesehatan Raya South PT MGM Propertindo 151 In Planning 19 Avenue Apartment (Tower B) Jl. Daan Mogot West Margahayu Land 416 Under Green Sedayu Apartment (Tower Pasadena) Jl. Kamal Raya West Agung Sedayu 644 Under Daan Mogot City (3 towers) Jl. Daan Mogot West PT China Harbour Real Estate Development 700 Under 2020 Verde Two (Tower East) Jl. HR Rasuna Said CBD Farpoint Realty 182 Under Le' Parc Jl. MH Thamrin CBD PT Putragaya Wahana 100 Under The Newton at Ciputra World 2 Jl. Karet Sawah CBD Ciputra Group 450 Under Holland Village (Phase II) Cempaka Putih Central PT Lippo Karawaci 230 Under The Stature Jl. Kebon Sirih Central Capitaland and Credo Group 87 Under The Sahid Asena Apartment and Garden Ciracas East Sahid Group 476 In Planning Prajawangsa City (8 towers) Jl. Raya Bogor East Synthesis Development 4,000 In Planning East 8 (2 towers) Cibubur East Karya Cipta Group 1,172 Under Sedayu City (Tower Darwin) Jl. Pegangsaan Dua Raya North Agung Sedayu 936 In Planning Regatta Tokyo, Acapulco, Sydney Tower Jl. Pantai Mutiara North Intiland Development 276 In Planning Kemang Penthouse Jl. P. Antasari South PT Senopati Aryani Prima & PT Mahardika Gagas Sejahtera 114 In Planning Antasari Heights (One Otium Residence) Jl. P. Antasari South PT Radinka Quatro Land 360 Under Selatan 8 (Tower Sultan) Kebayoran Lama South Karya Cipta Group 336 Under Fatmawati City Center(5 towers) Fatmawati South Agung Sedayu 2,080 Under Aerium Taman Permata Buana (South Tower) Taman Permata Buana West PT Itomas Kembangan Perdana (Sinarmas Land & ITOCHU) 366 Under Green Sedayu Apartment (Tower New York) Jl. Kamal Raya West Agung Sedayu 920 In Planning Tomang Park Apartment (2 towers) Jl. Tawakal Ujung Raya West PT Phoenix Property 2,000 In Planning 6 Colliers Quarterly 21 March Apartment Colliers International

19 LIST OF APARTMENT PROJECTS WITHIN THE TOD SYSTEM APARTMENT NAME LOCATION REGION PROJECTED OPENING YEAR DEVELOPER #UNITS Eastern Green Bekasi Jl. HM Joyomartono Bekasi 2019 PT Adhi Karya (Persero) Tbk. 634 Urban Signature LRT City Ciracas Jl. Penganten Ali East 2020 PT Adhi Karya (Persero) Tbk. 1,480 Tanjung Barat Stasiun Tanjung Barat South 2020 Perum Perumnas & PT Kereta Api Indonesia (Persero) Pondok Cina Stasiun Pondok Cina Depok 2020 Perum Perumnas & PT Kereta Api Indonesia (Persero) Pasar Senen Stasiun Senen Central 2020 PT Wijaya Karya Bangunan Gedung 820 1, Apartment LRT City Gateway Park Jl. Kampung Baru STM Kapin Bekasi 2020 PT Adhi Karya (Persero) Tbk. 1,254 Tanah Abang Jl. Jati Baru Central 2020 PT Kereta Api Indonesia (Persero) & PT PP Properti Tbk. Juanda Jl. Ir. H Juanda Central 2020 PT Kereta Api Indonesia (Persero) & PT PP Properti Tbk Conexio Dhika City Bekasi Jl. Suliki Cempaka Bekasi 2020 PT Adhi Persada Properti 558 Royal Sentul Park Jl. Raya Babakan Madang Bogor 2020 PT Adhi Karya (Persero) Tbk. 1,600 Demand Overall, apartment sales activities in have not been discernible, evidenced by the modest take-up rate increase by less than 1% from the previous quarter to 85.9%. At a glance, during the whole year of, the apartment market in was not as we expected earlier in the year. Weaker-than-expected demand recovery, lack of catalysts, issues on property-related regulations and s gubernatorial election had affected consumers appetite in buying apartment units. However, we saw a trend in which the number of mortgage users is increasing along with a relatively low interest rate policy. Approaching political year, the government should have preferences to a more populist measures for grassroots, including social-welfare budget, electricity tariffs and energy subsidies, rather than produce a promarket policy for the property sector, in order to increase popularity and electability. This trend is particularly evident when the incumbent is to get into the elections, as will be the case in During the pre-election years of 2008 (election was in July 2009 with incumbent candidates) and 2013 (election was in July 2014), it was found that the Composite Index was not bullish at those times. In 2008, amid the global financial crisis, the JCI fell by 23%, and in 2013, despite strong market expectation for then newly elected president, Joko Widodo, the JCI only experienced a modest increase by 6.7%. Furthermore, incumbent candidates will run in the 2019 elections, so we expect the elections to be as dynamic as those in 2009, compared with the However, contrary to the conditions in 2009, the current economic condition is much better in terms of fiscal, macro economy and global economic environment. Therefore, we believe the upcoming elections should not pose a significant impact towards buyer confidence. Take-up Comparison Between Existing and Under Projects Q4 Q3 Q4 QOQ YOY Existing 96.0% 96.1% 95.3% -0.8% -0.7% Presales Rate 68.1% 66.5% 67.0% 0.5% -1.1% Average 86.8% 85.6% 85.9% 0.3% -0.9% We expect higher sales volume in response to lower interest rate, which ought to incentivise mortgage users. We think the middle to low apartments, which mainly target end-users, will take benefit from the low interest rate environment. GDP growth is set to rise at a steady pace moving forward, on the back of lower interest rates 7 Colliers Quarterly 21 March Apartment Colliers International

20 January February March April May June July August September October November December January February March April May June July August September October November December and inflation, easing credit and a recovery in commodity prices. There are several key catalysts that we believe should be in favour of the residential property market going ahead: > Assuming the political situation is conducive and under control, it will likely spur people to spend more, including buying property product. > Fitch Ratings has upgraded Indonesia s credit ratings by one notch to the second-lowest investment grade from BBB- to BBB with a stable outlook. > There are lower financing and lending costs due to the easing on monetary policy. Following a sevenday repo rate cut in August and September, it should boost demand for property purchase using mortgage, particularly for the first home buyer. consumer confidence and optimism in the near term. Furthermore, the plan to introduce spatial LTV scheme should create positive sentiment, albeit in the short term, on the apartment market all over Indonesia. Indonesia Composite Index - A Year before Election 6,000 5,000 4,000 3,000 2,000 1,000 0 > Underpinned by the government s measures to promote business spending and the revision of negative investment lists, the investment activity is envisaged to accelerate in. Source: IDX Nonetheless, the following other factors should also be anticipated: Payment Method Composition in Purchasing Apartment (Q4 2013) > Domestic consumption may possibly decelerate, despite multiple interest rate cuts. In our opinion, this is mainly due to the slow transmission from monetary policy to actual domestic interest rate. > China is slowing down. A large correction in Chinese industrial demand would have a profound impact on global commodity prices and thus Indonesian export commodities account for over half of the goods exports. Hard cash 21% Mortgage 16% Investors are pickier these days as they are more risk averse amid the sluggish economy. From investors perspective, we see that due to the current market condition, investors may have less benefit from investing in apartments than in other alternative investments, such as foreign currencies or gold. Residential properties, particularly apartments, generate relatively high yields with lower risks. Gold and benchmark currencies such the US dollar are conventionally considered the safest method of hedging for the Indonesian people. However, both have generated marginal or even negative returns in recent years. Cash installment 63% The outlook for high-rise residential market in remains cautiously optimistic with opportunities and challenges. On-going and planned infrastructure projects are expected to accelerate and see an increased 8 Colliers Quarterly 21 March Apartment Colliers International

21 Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Payment Method Composition in Purchasing Apartment (Q4 ) Quarterly Asking Prices of Apartment in Three Different Areas Cash installment 52% Hard cash 19% IDR60,000,000 IDR50,000,000 IDR40,000,000 IDR30,000,000 IDR20,000,000 IDR10,000,000 IDR0 Mortgage 29% Source: Colliers International Interest Rates for Property Ownership Financing in Several Major Bank National Bank INTEREST RATES (%) BRI Bank Mandiri BNI BTN BCA Bank Danamon OCBC NISP Bank Mayapada Overseas Bank Citibank 8.25 CTBC Bank 9.65 UOB HSBC 9.00 Source: OJK Asking Price Overall, as of Q4, the average asking price of strata-title apartment in was approximately IDR33 mio/sq m, which is an increase of less than 1% QOQ and 4.2% YOY. Apartment prices will likely continue their upward trend, underpinned by recovering market sentiment. However, it is still possible to see a slower growth on price or even a short turmoil if a wave of new launches from middle to low projects occurs, which typically have massive units coming into the market that cannot be absorbed quickly. Source: Colliers International There is likely a tendency that investors become reluctant to invest in residential property considering the limited price appreciation, whilst real homebuyers will dominate the sales profile for immediate use. Given this, we project the price increment to increase modestly in, a little bit higher than in the previous year, by as much as 5-6%. Apartment for Lease Summary CBD South Non-prime Area There are no additional apartments for lease in during the last quarter of. Accordingly, the total supply for both serviced and non-serviced apartments in remained at 8,860 units. Furthermore, three new serviced apartment projects are preparing to operate in, including Ascott Sudirman, District 8 and Somerset Kencana. Looking forward, there will be an addition of at least 313 units from 2019 to Most of these have branded operators such Ascott, Somerset and Fraser. 9 Colliers Quarterly 21 March Apartment Colliers International

22 SUPPLY PIPELINE OF SERVICED APARTMENT IN JAKARTA APARTMENT NAME LOCATION REGION EXPECTED COMPLETION YEAR NO. OF UNITS Ascott Sudirman Jl. Prof Dr Satrio CBD 192 Oakwood at District 8 Senopati SCBD CBD 180 Somerset Kencana Pondok Indah South 148 Somerset Residence Jl. Kemang Raya South Ascott Menteng Menteng CBD Fraser Suites Kebon Melati Kebon Melati CBD 2022 TBA Demand in the leasing market is largely driven by expatriates characterised by increasingly high number of young Asian executives in managerial position. As of Q4, the average occupancy rate for apartment for lease in was relatively similar to the previous quarter, staying at 71.2%. Despite the gloomy condition in the oil and gas industry, there are other industries or sectors that are still growing here including banking, embassy staff and financial services. In addition, there are also potential demands from the on-going major infrastructure projects, such as the construction of Mass Rapid Transit (MRT), -Bandung High-Speed Railway and Asian Games-related works, including refurbishment and renovation of sport venues and stadiums. We also expect potential expatriates looking for home accommodation from the abovementioned sector. Other possible targets are e- commerce, IT and other tech industry sectors that would be the next market in the longer term. Occupancy Rates of Apartment for Lease Q4 Q3 Q4 QOQ YOY Leased 74.5% 74.5% 74.4% -0.1% -0.1% Serviced 66.7% 65.6% 65.3% -0.2% -1.3% Source: Colliers International In line with budget constraint policy set out by multinational companies, the profile of expatriate workers has evolved from those coming here as a family to single workers or couples without children. It is expected that the rental rate will remain soft in the near term, one to two years ahead, and continue to face downward pressure, with larger units bearing the brunt during the period. However, with lower rental budgets, the smaller apartment units may still find demand and hold up better. Hence, in this environment where there is a combination of factors, such as a slower arrival of foreigners, reduced rental budgets and increasing supply, the landlord of serviced apartments will have to excogitate to draw in tenants. In the meantime, the key performance indicator for landlords or management should ideally be based on relative peer performance and opportunity cost rather than benchmarking the new sign-on rent against the previous contracted one. By opportunity cost, we mean excess revenue over the course of a typical lease that could be earned if the unit is rented out realistically rather than leaving it un-contracted for an uncertain period of time due to unrealistic high asking rents. Average Rental Rates Changes of Apartment for Lease Based on Region Q2 Q3 Q4 CBD IDR361,788 IDR361,789 IDR361,789 South (incl. Non-Prime) IDR218,037 IDR218,369 IDR218,369 Source: Colliers International To sum up, the on-going injection of new stock (which is coming from individual owners of strata-title apartments offering their units for lease) is placing further downward pressure on rents, as leasing demand from expatriates is still weak. We expect a smaller number of expat workforce in the future, partly because of tighter controls in hiring foreigners since the Ministry of Manpower is encouraging companies to hire more local Indonesian workers and is tightening scrutiny of the work permit applications for foreigners, as we have heard from our channel on the ground. Concluding Thought Looking ahead to, a year before the next election, we believe that more populist government policies will be implemented. Purchasing power should improve on the back of easing cost pressures given the government will increase energy and health subsidies. Although the apartment market has not yet shown imminent recovery given several stimuli in the market, we are optimistic 10 Colliers Quarterly 21 March Apartment Colliers International

23 about seeing better results, albeit in a slow pace. Several key aspects such as steady economic growth, stable political situation, supportive regulation environment and on-going government infrastructure projects should significantly impact the property market, particularly the apartment market. Last but not least, Indonesia s huge population with the growing middle class economy and rising urbanisation will naturally create future demand for residential property. And for that reason, we can see foreign and local developers coming in and crowding the Indonesian property market. For more information: Ferry Salanto Senior Associate Director Research ferry.salanto@colliers.com Contributors: Hern Rizal Gobi Manager Research Copyright 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. 11 Colliers Quarterly 21 March Apartment Colliers International

24 Colliers Quarterly JAKARTA EXPATRIATE HOUSING Q4 21 March is the momentum for further recovery Ferry Salanto Senior Associate Director Research Summary The leasing market for expatriate housing has been in a pretty good shape starting from the second semester of. Colliers has seen more enquiries for housing accommodation as compared to last year, mostly from repeated corporate clients that have signed for one-year contract extension. A large number of companies nowadays will only take maximum one-year contract and very few of them are willing to accept two years rent in advance. In, we saw a huge number of Chinese expatriates coming to as they take part in many infrastructure and real estate development projects, including commercial and residential (apartment and landed house) projects in the Greater areas. The upcoming high-speed train project that will be funded by Chinese companies may potentially draw a number of expatriates from mainland China. However, there will be lesser impact on the occupancy of landed residences and apartments for lease (both serviced and nonserviced) in, mainly because the project is located outside the capital city. Moreover, unlike Japanese and western expats, the requirement of most Chinese expats when picking a place to live in is subjected to their companies accommodation budget, which is considerably low. Also, they prefer to settle in a location near their projects. As market started to recover, we also indicate an increase in rental prices of several high-demand properties in prime areas, including Cipete, Cilandak, Pondok Indah and Kebayoran Baru. Landlords of these prime properties, including high-end stand-alone houses as well as housing compounds and apartments, still record an increasing trend of enquiries and thus can manage to raise rent significantly after reaching high occupancy level. Recently, it is a bit challenging to find available units in the most sought-after housing compounds, particularly in Kuningan, Kemang, Cilandak and Cipete. In term of demand, manufacturing and automobile companies were becoming more active along with their expansion and new set-up projects. Infrastructure projects and some other construction works related to Asian Games in will contribute to the inflow of expat workers. Meanwhile, properties located in areas such as Lebak Bulus, Permata Hijau, Ampera or Menteng will still face challenges in becoming top housing locations instead of the areas mentioned above, primarily because they are far from several key locations, such as international schools, shopping areas and dining places, as demanded by most expats. There are not many residential options in Menteng, as modern houses are limited because old buildings in Menteng are regarded by the DKI Government as a cultural heritage, particularly homes and buildings that were built during the Dutch colonial era. In certain locations, landlords of individually owned stand-alone houses are generally more flexible in offering contract lease term as well as in entertaining additional requests related to the renovation, improvement and providing inclusive features of the house. As landed house owners are generally reluctant to entertain leasing enquiries of less than one year, selected leased apartment projects that aim at expat tenants benefit from the market of expats with shortened contract tenure (from typically two to three years employment contract to a shorter term of less than one year). Serviced apartment accommodation offers a more flexible tenure compared to landed houses and has increasingly become popular amongst expats. Meanwhile, the trend in the sub-lease market still continues in. Once the tenant signs a lease in certain periods but can no longer fulfil the terms, which might be due to work contract expiration or bankruptcy, their primary option is to sublease the property (house or apartment) to others for whichever term they cannot