Inflation Rate 6.96% 3.79% 4.30% 8.38% 8.36% 3.35% 3.21% Gross Domestic Product 2010 2011 2012 2013 2014 2015 Jul 16
Property market in Indonesia during second quarter continued to languish with more moderate growth compared to the first quarter Supply and demand increased moderately with demand lagging behind supply Downward pressure on average rental. Meanwhile, average sale price increased modestly Limited MICE activities during fasting month had led to a lower occupancy level in Hotel market over reviewed quarter In midst of moderate level of foreign demand, domestic demand mostly concentrated in middle to middle low market segment
116,167 111,857 93,628 77,073 57,392 55,469 66,579 60,891 29,736 19,224 36,700 29,995 197,848 174,499 363,639 327,386 7,776,362 6,751,345 There was no new additional supply in the second quarter, net absorption have continued in downward pressure 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 86.8% 96.3% 82.3% 9 96.6% 88.2% 91.5% 64.6% 81.7% Jkt Btn Bdg Sby Smg Mdn Mks Pku Bpn Supply Demand Occupancy 10 9 8 7 6 5 4 3 2 1 Cumulative supply remained stable with new additional supply only came from newly completed building in Jakarta. Overall, net take up achieved 77,109 sqm during the 2 nd quarter 2016 and it was mostly concluded in grade A offices in Jakarta. Other major cities contributed in small portion to the net take up. Demand was mostly generated by new company establishment, tenant expansion, and relocation. Based on type of business, companies in business line of ecommerce and trading company contributed a majority to demand in office market. Occupancy in most of cities decreased by 0.4% to 1.2% with Bandung witness the highest decrease of 4.3% Occupancy level of offices in Tangerang, Semarang, and Makassar was considerable the highest in the market. Supply and Demand Trend Compared to First Quarter Period Supply Demand Jkt Btn Bdg Sby Smg Mdn Mks Pku Blk 2.01% 1.22% % 1.29% % (4.25%) % 0.04% % (0.43%) % (0.42%) % (1.15%) % 1.59% % (3.85%)
233,994 150,000 153,333 124,850 130,259 114,322 113,767 129,048 129,148 134,491 143,333 80,833 80,833 155,000 235,025 138,722 151,667 155,000 Rental in most of offices remained stagnant and tended to be more negotiable 250,000 200,000 150,000 100,000 0.44% 2.22% Rental 2Q16 Rental 1Q16 Rental 0.49% 0.08% 5.81% % % 8.0% 6.0% 4.0% 2.0% 50,000 4.15% Jkt Btn Bdg Sby Smg Mdn Mks Pku Bpn 3.05% 2.0% 4.0% 6.0% Rental SC Jkt Btn Bdg Sby Smg Mdn Mks Pku Blk 0.44% 0.73% Rental and Service Charge Trend Compared to First Quarter Period 2.22% % (4.15%) (0.27%) 0.49% 0.22% (0.08%) 0.05% (3.05%) (0.29%) 5.81% (2.56%) % (2.99%) % % Overall, rental was relatively flat over the quarter, with only few buildings adjusted their rental to a more reasonable level. Amongst major cities in the country, Makassar enjoyed the highest rental increment by 5.81% following their role in accommodating business activities in eastern part of the country.
911,901 768,579 793,783 981,802 302,303 285,712 380,871 359,768 219,637 212,561 187,789 137,426 228,026 190,310 151,445 133,390 337,728 249,868 56,642 35,640 187,689 139,619 226,810 218,924 220,287 152,103 236,500 215,120 3,900,668 1,058,447 866,044 828,313 1,071,396 4,149,076 While market in most of cities remained stagnant, demand in established cities increased slightly 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 94.0% 86.2% 88.7% 95.8% 91.6% 94.5% 94.5% 96.8% 73.2% 88.1% 83.5% 74.0% 62.9% 74.4% SUPPLY DEMAND OCCUPANCY 96.5% 69.0% 91.0% 10 9 8 7 6 5 4 3 2 1 Supply distribution remained stable in the 2 nd quarter 2016, with Jakarta remain the highest contributors of 38.7% of total supply, followed by Surabaya (1) and Bodebek (9.9%). Cumulative supply grew slightly by 0.43% following newly operated retail center in Bodebek area during 2 nd quarter, relatively higher than demand growth of 0.17% in the same period. Limited new additional supply had led to low demand absorption with only 16,675 sqm in the 2 nd quarter. Demand absorption was mostly concluded in newly completed retail centers in Bodebek area. F&B tenants were recorded as major demand generator as some projects provide lifestyle concept within their center. Due to saturated Jakarta market, retail development has started to expand to suburban area, such as Bodebek. Therefore demand has also started to grow in that area. Supply and Demand Trend Compared to First Quarter Period (%) Jkt BoDe Bek Btn Bdg Sby Smg Mdn Mks Bali Blkp Crb Jogja Kdr Plb Pku Smd Solo S 0.36 2.57 2.18 D 0.03 2.23 (1.17) 0.80 0.15 0.31 0.38 (1.15) (1.67)
150,000 150,000 235,000 312,875 312,875 246,429 259,000 259,000 271,667 280,000 405,276 403,742 405,198 474,443 447,628 382,733 400,000 400,000 471,869 409,493 450,842 392,087 400,000 401,429 473,718 473,718 483,333 483,333 719,233 715,967 667,857 668,817 625,000 625,000 Rental in most major cities have grown moderate 800,000 Rental 1Q16 Rental 2Q16 Growth Based Rents 6.3% 700,000 4.9% 5.0% 600,000 500,000 3.1% 3.8% 400,000 2.5% 300,000 200,000 100,000 1.1% 2.4% 0.7% 0.4% 0.1% 0.5% 0.4% 0.5% Jakarta Bodebek Banten Bandung Surabaya Semarang Medan Makassar Bali Balikpapan Cirebon Jogja Kendari Palembang Pekanbaru Samarinda Solo Rental and Service Charge Trend Compared to First Quarter Period (%) 1.3% 1.3% Jkt BoDe Bek Btn Bdg Sby Smg Mdn Mks Bali Blkp Crb Jogja Kdr Plb Pku Smd Solo Rent (0.45) (0.38) (0.54) 0.14 1.06 0.72 2.44 2.18 0.36 4.86 3.07 SC 1.20 1.58 4.80 1.55 0.73 1.58 2.41 1.15 3.33 5.21 1.67 Rental increased slightly by only 0.4% as few retail centers adjusted their rental in the 2 nd quarter 2016. In midst of stagnant market, rentals in some cities were recorded a decrease as they applied certain discount to maintain occupancy.
Jkt Btn Bdg Sby Smg Mdn Mks Pku Bpn BDB DIY Solo Plb Crb 52,612 44,976 23,848 22,616 37,265 33,014 5,421 4,622 6,418 4,565 2,630 2,317 846 584 6,124 5,148 57,896 46,946 7,688 5,707 1,266 947 1,197 573 795 159 164,455 146,115 Limited launched projects in apartment market had led to modest increased in sales rate 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 94.8% Supply Demand Sales Rate 88.8% 88.6% 88.1% 84.1% 85.5% 85.3% 81.1% 74.8% 71.1% 69.0% 74.2% 47.9% 2 10 9 8 7 6 5 4 3 2 1 Supply have been relatively stagnant in most of major cities following limited launched projects during the second quarter. New additional supply was only identified in Jakarta, Tangerang and Medan, which most of them were targeted to middle low to middle market segment. Majority of new additional supply were located in Jakarta market, represent about 43.6% from total new supply and followed by Medan with 12.5% There was a new launched project in Cirebon and it is considerable as the first highrise residential development in the city. Demand was maintained to remain in modest positive level, determined by the types and prices offered. Net take up in the second quarter reached 5,979 units, which about 59.7% of that was concluded in Jakarta market. Demand profile continued to be dominated by investor. Supply and Demand Trend Compared to First Quarter Period S D Jkt Btn Bdg Sby Smg Mdn Mks Pku Blk BDB DIY Solo Plb Crb 1.2% 2.5% 3.2% 1.5% 0.5% 0.9% (8.8%) (3.5%) 9.3% 3.9% 1.2% 0.5% 0.7% 2.4% (0.4%) 1.3% 1.8%
24,693,947 18,121,232 17,903,036 17,293,436 16,928,781 17,601,127 17,599,239 18,974,101 27,357,631 20,874,324 26,736,520 26,308,412 14,121,179 14,065,916 16,426,821 16,414,313 22,076,462 19,412,943 17,704,204 17,678,181 10,757,143 21,066,716 22,076,462 24,590,569 26,859,767 26,925,913 26,740,772 Even though most of apartment keep their price in the same level, overall average price increased slightly as some of marketed project adjusted their price to be more reasonable level Price in most of major cities remained in the same level as previous quarter. Sale price increased by 0.2% to 1.2% in most of major cities, with Bandung and Semarang enjoyed a higher increment up to 2.4% during the second quarter. 28,000,000 2.15% 2.31% Price 2Q16 Price 1Q16 Growth 2.5% 26,000,000 1.64% 2.0% 24,000,000 22,000,000 20,000,000 18,000,000 0.42% 1.22% 0.01% 0.92% 0.71% 0.39% 0.08% % 0.15% % 1.5% 1.0% 0.5% 16,000,000 0.5% 14,000,000 1.0% 12,000,000 1.82% 1.5% 10,000,000 2.0% 8,000,000 Jkt Btn Bdg Sby Smg Mdn Mks Pku Bpn BDB DIY Solo Plb Crb 2.5% Base Price Trend Compared to First Quarter Period Jkt Btn Bdg Sby Smg Mdn Mks Pku Blk BDB DIY Solo Plb Crb (0.4%) 1.2% 2.2% 0.01% 2.3% (1.8%) 0.9% 0.7% 1.6% 0.4% 0.1% 0.2%
4,916 4,661 3,198 2,777 12,827 6,433 9,612 5,379 4,225 2,037 5,956 3,236 5,687 3,528 3,193 1,681 1,599 754 4,148 2,605 839 533 2,754 1,745 3,395 1,534 1,224 658 4,150 2,380 13,132 9,102 20,627 34,216 Less mice activities during fasting month had led occupancy level decreased in the second quarter 40,000 SUPPLY DEMAND OCCUPANCY 35,000 30,000 25,000 20,000 15,000 10,000 5,000 60.3% 65.1% 59.6% 50.2% 56.0% 48.2% 54.3% 62.0% 69.3% 52.6% 47.2% 62.8% 63.5% 63.4% 45.2% 57.3% 53.8% 8 7 6 5 4 3 2 1 Cumulative supply increased by 1.9% in the second quarter, which was contributed by new additional supply in Jabodebek, Semarang, Bali, Palembang and Pekanbaru. Jakarta contributed the market with 29.4% of total supply, followed by Bali (11.3%) and Bandung (11.0%) Based on number of room, new supply is dominated by 4 star hotels with 40.3% of total new supply, followed by 3 star hotels (30.4%) and 5 star hotels (29.3%) Demand absorption decreased for 6.9% in the second quarter due to less MICE activities that were held during fasting month. However, few cities including Jogja and Bogor enjoyed a positive demand in the second quarter as they were considerable as destination for holiday season prior to fasting month period. Supply and Demand Trend Compared to First Quarter Period (%) Jkt BoDe Bek Btn Bdg Sby Smg Mdn Mks Bali Blkp Crb Jogja Kdr Plb Pku Smd Solo S 2.8 8.8 7.1 2.5 4.0 13.2 D (4.5) 6.1 (9.0) (16.3) (10.8) (10.9) (13.3) (16.1) (1.5) 0.93 (6.8) 4.7 (13.7) (2.8) (9.1) (6.2) (9.8)
1,490,036 789,025 770,493 1,000,644 700,520 738,838 627,417 576,809 601,675 551,481 608,368 511,241 1,748,200 587,622 609,356 552,486 530,733 937,200 498,944 470,930 1,043,588 810,025 810,940 673,606 663,530 492,563 431,425 746,239 528,022 494,246 896,673 799,314 1,461,391 1,737,182 Due to lower absorption, achievable room rate of hotel decreased by 4.05% in second quarter 2,100,000 Rental 1Q16 Rental 2Q16 Growth Based Rents 1 1,750,000 2.0% 3.7% 4.5% 5.0% 1,400,000 2.3% 4.1% 0.6% 1.5% 1,050,000 8.9% 8.1% 8.3% 3.9% 5.6% 6.6% 6.4% 5.0% 700,000 12.4% 1 350,000 13.5% 15.0% 16.0% 2 Room Rates Trend Compared to First Quarter Period (%) Jkt BoDe Bek Btn Bdg Sby Smg Mdn Mks Bali Blkp Crb Jogja Kdr Plb Pku Smd Solo Rates 2.0 (2.4) (4.1) (13.5) (8.9) (8.0) (8.3) (16.0) 0.6 3.7 (3.9) 4.5 (5.6) (1.5) (12.4) (6.6) (6.4) Average room rates decreased by 4.05% during second quarter due to low demand absorption However, room rates of hotel market in tourism cities, such as Jogja and Bali, enjoyed an increase as more visitors come to the cities during holiday season
Almost all sectors of property commercial in Indonesia show the better of demand performance 3.00% 2.00% 1.00% % 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 1.02% Demand Growth 0.17% 1.91% Office Retail Apartment Hotel 6.88% Apartment was the most positive growth during the quarter Demand of office building increased slightly positive level Demand office remain in modest positive level Retail sector show stagnant demand The lowest demand growth of hotel sector is considerable as regular cycle as less MICE activities during fasting month 1.00% 0.50% % 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 0.28% Price Growth 0.44% Office Retail Apartment Hotel 2.95% 4.05% Price in office and retail sectors have grown positively moderate The lower price of apartment due to new additional supply dominated by middle to mid low segment The fluctuation of occupancy hotel room impact to hotel room rates
More than 400 sqm new additional supply is anticipated to enter the market until the end 2016. These additional supply mostly come from buildings in Jakarta. Occupancy level will be stagnant up to the end 2016 following a moderate growth of demand. Rental will continue under pressure. The implementation of tax amnesty will bring to a positive sentiment. Launched project will be generated not only in middle to middle low market, but also middle upper to upper market. Positive sentiment to the market will be translated into transaction and early recovery in 20172018 period. In addition to middle to middle low market, transaction activities will be also contributed by middle upper to upper market.
New additional supply will come from projects in Jabodetabek. Occupancy is projected to increase in line with increasing demand from MICE activities. Room rate is expected to increase MICE will continue as main demand generator for hotel market Approximately 1 million sqm additional new supply are anticipated to enter the market until end of 2018. F&B will continue to be major demand generator for retail centers in major cities of Indonesia in 2016. Therefore, projected to be more their lifestyle retail development. Occupancy and rental is expected to remain stable in 2016. In addition to Jabodetabek area and Surabaya are projected to have a more active market compared to other cities.