Jakarta Market Report 4 Q 2012

4Q 2012 I THE KNOWLEDGE
JAKARTA REAL ESTATE
RESEARCH & FORECAST REPORT
Property Sector Overview

OFFICE SECTOR
The office sector stole the limelight in 2012 with a y-o-y increase of 47.6% for US dollar denominated buildings and 33.2% for rupiah buildings. The average asking base rental rates at the end of the year were US$31.30/sq m/month and IDR169,859/sq m/month respectively. Meanwhile, new office space will be limited in 2013 but leasing demand should continue to be buoyant. On the strata-title office front where stock for sale was limited, the y-o-y office asking prices edged up by 31.3% and 26.2%, respectively for rupiah and US dollars, i.e. to IDR27.8 million/sq m and US$3,313/sq m. The limited supply of new office space in 2013 for either lease or sale will further strengthen the landlords position in rental negotiation and increase rents.
APARTMENT SECTOR
Demand for high-rise residential units has been growing quite significantly since early 2012. Due to this trend and limited stock in sub-markets like the CBD and South Jakarta, rupiah prices went up by 25.1% (to IDR29.8 million/sq m) and20.5% (to IDR20.7 million/sq m), respectively. In terms of the annual of new apartment stock, 2012 saw a historic high with a total of 19,706 apartment units coming on the market in Jakarta. We still anticipate seeing a substantial number of apartment units expected to be finished in 2013 and 2014.
RESIDENTIAL EXPATRIATE HOUSING SECTOR

The rental tariff for expatriate housing generally climbed the range of 15% to 30% per unit for 2H 2012 period. Rentals were up mainly due to strong and abundant inquiries for expatriate living accommodation but on the other hand the number of such properties available is increasingly limited - in particular those that meet expat standards regarding size, location, quality, furniture and facilities available in one house. Such conditions have led to a landlord market where home owners have a strong bargaining position. Searching for aquality home that meets a required budget is very challenging, particularly in high-demand locations like Pondok Indah, Kebayoran Baru (certain areas which are close to the CBD) and Kuningan.
RETAIl SECTOR
Asking base rent for non-anchor, non-ground floor tenants in sizeable shopping malls increased 18.5% during 2012, and was recorded at an average IDR461,399/sq m/month. We anticipate further growth in rental rates given the very limited amount of new retail space and the fact that pre-committed occupancy for underconstruction projects is high.
INduSTRIAl ESTATE SECTOR

Industrial land prices in Greater Jakarta increased significantly by 44% in Karawang to an average of US$155.80/sq m. Meanwhile, a 37% YoY increase was also seen in Bekasi with the average price at US$206.20/sq m and in Serang with a 32% increase (average price at US$114.60/sq m). On the sales front, the total industrial sales in 2012 only amounted to 51% (636.4 hectares) of the total sales in 2011, not because of slow demand but mainly because of a lack of industrial land stock.
www.colliers.com
jakarta | 4Q 2012 | OFFICE
Office Sector
Supply
JAKARTA
New office space supply in Jakarta (CBD and the outside CBD area) showed a significant increase during 2012. By the end of 2012, there was 547,070 sq m of additional office space (supplied by 16 office buildings) which is the largest annual supply since the economy crisis in 1998. Meanwhile, three office buildings located in the CBD stopped operating due to refurbishment, they area Wisma Putra Kalimantan, Bina Mulia I and Bina Mulia II removing around 27,175 sq m of the total office stock. The dynamic events in the office supply during the year brought the cumulative supply to 6.75 million sq m. JAKARTA OFFICE CUMULATIVE SUPPLY
10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2000 2002 2011 2012F 2014F 2016F 2004 2006 2008 2001 2005 2009 2003 2007 2010 2013F 2015F
The office supply in Jakarta is projected to continue growing. Though it will be far less in 2013, the annual supply is projected to increase rapidly from 2014 to 2016. During that time, it is projected that the annual supply will be 40 60% more than in 2012. Based on marketing scheme, the Jakarta office market is still dominated by offices for lease. Currently, 81.2% of the 6.75 million sq m of Jakarta office space is offered as office for lease.
sq m
Existing Supply
Annual Supply
Colliers International Indonesia - Research
CBd
During 2012, total new office space in the CBD totalled 289,514 sq m, representing a jump jump by twice compared the total annual supply in 2011. In the middle of 2012, three high-rise buildings, i.e. AXA Tower, Multivision, Office 8 and two mid-rise buildings, i.e. Indosurya Plaza and 18 Office Park Tower D were in operation bringing a total of 144,073 sq m of new office space to the CBD. In the following quarter, there was the addition of around 57,000 sq m from the operation of the World Trade Center II. Subsequent to that, a total of 88,441 sq m was contributed from the operation of Tower One at The City Center and Tower C at 18 Office Park. Meanwhile, two buildings are being refurbished this quarter, namely Bina Mulia I and II with the building faades being renovated. Bina Mulia II will be renamed Tempo Pavilliun I and will begin operations around April 2013, while Bina Mulia I will begin operations in August 2013. A reduction of supply will also take place in Jalan Jendral Gatot Subroto where the Wisma Putra Kalimantan buildings are to be demolished and replaced with a brand new building . Total office space in the CBD as of 4Q 2012 is 4.62 million sq m, representing an increase of 6% over that at the end of 2011. Since 3Q 2012, we had forecast that Menara Palma 2 would be the only supply for 2013, but then two office buildings, which had previously been planned for operations in 2012, rescheduled their completions to early 2013. This includes an office building in Setiabudi, South Jakarta, which, at the end of 2012, was still completing the faade work. Another building is DBS Tower, which decided to reschedule operations to early 2013 and three mid-rise office towers of 18 Office Park project. Thus, from the previously projected 40,000 sq m of office space at Menara Palma 2, there will be a total of 145,332 sq m of new office space in the CBD by 2013.
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| COllIERS INTERNATIONAl
In the CBD, 81% of the existing 4.62 million sq m registered in 2012 is marketed for lease. The supply of offices for lease should continue to grow at least until 2014. Of 531,755 sq m of new supply that will be operational in 2013 2014, 317,717 sq m or 61% will be marketed for lease.
In addition, there are 21 new office developments that have been announced will be built in the CBD during 2013 - 2015 in the CBD, 18 of which started construction in 2012. Meanwhile, some new names have also been introduced like Satrio Tower 2, Bahana Office Tower, World Capital Tower, World Trade Center III, Sequis Life Tower 2 and Gatot Subroto Office Tower.
COMPOSITION OF CBd OFFICE SuPPly BASEd ON gRAdE

Grade C, 1,012,052 sq m Premium, 335,918 sq m
Grade A, 1,759,864 sq m
Grade B, 1,513,140 sq m
ANNuAl CBd OFFICE SuPPly BASEd ON AREA

Satrio Gatot Subroto Mega Kuningan Rasuna Said Sudirman Thamrin 0 100,000 2009 200,000 2010 2011 300,000 2012 400,000 2013F
500,000
sq m
OuTSIdE CBd
The year 2010 was the momentum of office market in the outside the CBD area showed rapid growth. In 2010 and 2011, the total office supply reached over 100,000 sq m annually. In 2012, the annual supply in the outside the CBD area has grown to twice that of the previous year. During 2012, eight new office buildings contributed 257,556 sq m, bringing the cumulative supply to 2.13 million sq m in the outside the CBD area. Four office buildings that began operating in early 2012 were Menara Satu, Wisma Pondok Indah 3, Grand Slipi Tower and Sovereign Plaza. Another four were PHE Tower, Eighty8, Trihamas and Menara Merdeka.
COllIERS INTERNATIONAl |
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The supply projection for 2013 will be lower than 2012. Supply is projected from the completion of eight office buildings including Blue Green Office Boutique, Oleos 2, Alamanda Tower, The CEO and Prudential Centre (part of Kota Kasablanka commercial compound). These buildings are finishing the construction work and are expected to be in operation in early 2013. Two other buildings scheduled for 2013 are Gedung Aneka Tambang Tower 2 and Talavera Suites. Up to the end of 2012, both were able to complete 50% of their construction and the owners are confident that the buildings will be finished in 2013. South Jakarta is the area most populated with office development, contributing 45.2% of the
total office supply in the outside the CBD. In 2012 alone, five of the eight new office buildings are located in South Jakarta and contributed 142,786 sq m or 55% of the total annual supply in the outside the CBD area during 2012. Central and West Jakarta follow South Jakarta as large contributors with 26 and 17%, relatively, of the cumulative supply in the outside the CBD area. Projecting supply for 2013, South Jakarta again will be the main generator of office supply. Five office buildings located in Simatupang and Kasablanka will contribute 106,376 sq m in the outside the CBD area. Another active area in 2013 will be West Jakarta where two office buildings located in Meruya and Slipi, will add 39,600 sq m of new supply.
COMPOSITION OF OuTSIdE CBd OFFICE SuPPly BASEd ON gRAdE

Grade A, 120,599 sq m Grade B, 645,799 sq m
Grade C, 1,363,278 sq m
ANNuAl OuTSIdE CBd OFFICE SuPPly BASEd ON AREA

West Jakarta East Jakarta North Jakarta South Jakarta Central Jakarta 0 100,000 2009 200,000 2010 2011 300,000 2012 400,000 2013F 500,000
sq m
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TB SIMATuPANg
During 2012, four new office buildings with a total space of 86,286 sq m are in operation, bringing the cumulative supply in TB Simatupang to 428,830 sq m. The total annual supply in 2012 grew to three times that in the previous year. However, total supply projections will be CBd OFFICE SUPPLY duRINg 1995 - 2015
500,000 400,000 300,000 200,000 100,000 0 2001 2005 2009 2003 2007 2010 2000 2012 2011 2013F 2014F 2014F 2015F 2015F 2002 2004 2006 2008 1996 1998 1995 1999 1997
slightly lower for 2013. The five office buildings that are anticipated to enter the market in 2013 are Alamanda Tower, Talavera Suite, Gedung Aneka Tambang Tower 2, The CEO and Oleos 2 with a total of 75,376 sq m.
For Lease
For Sale
In Planning
OuTSIdE CBd OFFICE SUPPLY duRINg 1995 - 2015

500,000 400,000 300,000 200,000 100,000 0 2001 2005 2009 2003 2007 2010 2000 2012 2011 2013F 2002 2004 2006 2008 1996 1998 1995 1999 1997
For Lease
For Sale
In Planning
Similar to the CBD, of 2.1 million sq m of existing cumulative supply in the outside the CBD area, 82% is marketed for lease. However, unlike in the CBD, of the 529,246 sq m new office space available during 2013 - 2014 period in the outside the CBD area, 340,952 sq m or 64% will be marketed as strata-title offices for sale.
For the next three years, from 2013 - 2015, there will be 30 new office buildings to be built. The largest number will be available during 2014 with 13 new office buildings which started construction in 2012. The second largest number of supply will be in 2015 with nine new office buildings. South and West Jakarta appear as the main contributor areas for new office supply in 2015.
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NEW SuPPly PIPElINE
PROJECTEd COMPlETION TIME
BuIldINg NAME
lOCATION
SGA (SQ M)
MARKETINg SCHEME
dEvElOPMENT STATuS*
CBD AREA
2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 DBS Tower (Ciputra World Jakarta 1) Menara Prima 2 Perkantoran Setiabudi 18 PARK Tower A 18 PARK Tower B 18 PARK Tower E Tempo Pavilliun I Tempo Pavilliun II Chase Tower Gran Rubina Tower 1 Life Tower Satrio Square Sahid Sudirman Center The Noble House Office Tower Wisma Mulia 2 Bahana Office Tower Ciputra World Jakarta 2 International Financial Center 2 Mangkuluhur Tower B Menara Selaras Office Tower @St Regis Rasuna Tower Tower Two at The City Center District 8 Tower 2 District 8 Tower 3 Graha Surya Internusa Graha Surya Internusa 2 Gran Rubina Tower 2 Gatot Subroto Office Tower Satrio Project Sequis Life Tower 2 World Trade Center III World Capital Tower Satrio Mega Kuningan Rasuna Said Sudirman Sudirman Sudirman Rasuna Said Rasuna Said Sudirman Rasuna Said Rasuna Said Satrio Sudirman Mega Kuningan Gatot Subroto Mega Kuningan Satrio Sudirman Gatot Subroto Sudirman Gatot Subroto Rasuna Said KH Mas Mansyur Sudirman Sudirman Rasuna Said Rasuna Said Rasuna Said Gatot Subroto Satrio Sudirman Sudirman Mega Kuningan 64,000 40,000 11,000 4,814 4,570 4,233 7,075 9,640 75,000 31,438 30,500 24,600 126,600 45,000 70,000 50,000 70,000 50,000 39,356 36,596 90,000 80,000 39,204 71,545 139,000 45,000 45,000 70,000 100,000 100,000 80,000 70,000 90,000 For Lease and For Strata-title For Lease For Strata-title For Lease For Lease For Lease For Lease For Lease For Lease For Strata-title For Lease For Lease and For Strata-title For Strata-title For Lease and For Strata-title For Lease For Lease For Lease and For Strata-title For Lease For Strata-title For Lease For Strata-title For Lease For Lease For Strata-title For Strata-title For Lease For Strata-title For Strata-title For Strata-title For Lease For Lease For Lease For Strata-title Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Conctruction Under Planning Under Planning Under Conctruction Under Conctruction Under Planning Under Planning Under Construction Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning Under Planning
OUTSIDE CBD AREA (exclude TB SIMATUPANG)

2013 2013 2013 2014 2014 2014 2014 2014 2014 Blue Green Office Boutique DIPO Business Park Prudential Centre GP Plaza Menara Sentraya The Suites Wisma 77 Tower 2 Kirana Two Sky 18 Tower Meruya Slipi Casablanca Slipi Blok M Pantai Indah Kapuk Slipi Sunter Kalibata 20,000 19,600 31,000 12,204 52,072 13,200 24,200 17,563 27,500 For Lease For Strata-title For Lease For Strata-title For Lease and For Strata-title For Strata-title For Strata-title For Lease and For Strata-title For Strata-title Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction
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PROJECTEd COMPlETION TIME

2015 2015 2015 2015
BuIldINg NAME
St. Moritz Office Tower Puri Financial Tower Gallery West LVenue
lOCATION
Puri Indah Puri Indah Kebon Jeruk Pasar Minggu
SGA (SQ M)
19,500 38,500 29,000 41,597
MARKETINg SCHEME
For Strata-title For Strata-title For Strata-title For Strata-title
dEvElOPMENT STATuS*
Under Construction Under Construction Under Planning Under Planning
TB SIMATUPANG
2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015 Alamanda Tower Gedung Aneka Tambang Tower 2 Oleos 2 Talavera Suite The CEO Beltway Office Park Tower 3 Graha Kirana Megah (GKM) Tower Metropolitan Tower Plaza Oleos South Quarter Tower 1 The Manhattan Square 18 Office Park (Cityland Tower) AD Premier Naras Tower South Quarter Tower 2 South Quarter Tower 3 33,000 16,000 4,181 17,172 5,023 9,600 23,000 44,000 39,778 40,778 39,375 40,000 18,900 19,000 40,778 40,778 For Lease and For Strata-title For Lease For Lease For Lease For Lease and For Strata-title For Lease For Strata-title For Lease and For Strata-title For Lease and For Strata-title For Strata-title For Lease and For Strata-title For Strata-title For Lease For Lease For Lease For Lease Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Construction Under Planning Under Construction Under Planning Under Planning
*) Under Construction: where construction activity is in progress, including either foundation or superstructure. Under Planning: no contruction activities on site but all permits have been approved by the Government.
Base Rental
CBD
The increase in rental rates still continued to climb during 4Q 2012. The average base rental rates for office buildings charging in rupiah (which represent 68.5% of the total buildings in the CBD) was IDR169,859/sq m/month in 4Q 2012 which is 13% higher QoQ or 33% YoY. A similar trend occurred at the office buildings charging in US dollars. The QoQ change may be lower than at rupiah buildings, i.e. 7% increase, but the YoY change recorded a jump of 48% in one year. As of December 2012, the average asking rental rates for all classes of buildings was US$31.30/sq m/month. The most significant increase occurred at the Premium Grade buildings charging US dollar rent. Last quarter, the average base rent was US$35.74/ sq m/month and it jumped to US$44.06/sq m/ month. Significantly, increasing rent in the CBD was also triggered by several buildings raising their rents twice during the year. During 2012, there were some office buildings which increased rents in the middle and at the end of the year. These buildings that adjusted the rents in the middle and end of the year have similarities like prime location, easy access and offer sophisticated technology (choice of building materials and IT system). In general, all grades of US dollar denominated buildings underwent rent adjustments during the year.
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The average rent for both US dollar and rupiah rent (combined) for all grades of buildings showed that Thamrin and Sudirman submarkets had the highest rent. Average rental rates in Thamrin and Sudirman were IDR286,805 (US$29.87) and IDR256,568 (US$26.73) per sq m per month, respectively. Meanwhile Satrio and Mega Kuningan were at IDR194,125 (US$20.22) and IDR174,979 (US$18.23) per sq m per month. Gatot Subroto and Rasuna Said placed the lowest at IDR166,894 (US$17.38) and IDR133,528 (US$13.91), respectively, per sq m per month. The average rent in the Rasuna Said submarket was somewhat low because some small
and old office buildings populated this area; however, given increasingly higher land prices and higher site coverage, newer and future buildings are built with Grade A quality. In general, office buildings in operation between 2009 and 2012 experienced the highest increase in average asking rental rates achieving IDR175,455 for rupiah denominated buildings and US$36.10 / sq m / month for US dollar. To date, most large new office buildings operating in the CBD area are of Grade A quality and they somewhat raised the overall average rental rates for the last two years.
AvERAgE ASKINg RENTAl RATES IN THE CBd duRINg 1995 - 2012

IDR 336,000 IDR 288,000 IDR 240,000 IDR 192,000 IDR 144,000 IDR 96,000 IDR 48,000 IDR 0 2000 2002 2004 2006 2008 2001 2005 2009 2003 2007 1995 1999 2010 1997 2011 2012 1996 1998 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00
IDR
US$
OUTSIDE CBD
Average rental rates in the outside the CBD area moved upward significantly during the quarter recording an increase of 23% QoQ at an average of IDR123.312/sq m/month. Comparing YoY figures, this reflected an increase by 33%. Such a substantial increase during the quarter was mainly fuelled by the operation of three new office buildings: PHE Tower, Trihamas and Eighty8 at Kota Kasablanka. Similarly, the overall asking rental rates in US dollars also rose this quarter by 12% to US$15.50 / sq m / month, primarily triggered by the adjustment of one office park located in the TB Simatupang area and the new operation of Merdeka Tower. During the first three quarters, rental rates in US dollar denominated buildings are quite marginal and therefore the YoY increase was recorded at 16%. In popular office areas like Slipi (West Jakarta) and MT Haryono (East Jakarta), rental rates were recorded at IDR96,818/sq m/month and IDR97,500/sq m/month, respectively. Meanwhile, at preferred commercial locations in South Jakarta like in Kasablanka, Kebayoran Baru, Kemang, Permata Hijau and Gandaria, the average rental rates were registered at IDR101,455/sq m/month. In the growing commercial areas like TB Simatupang and Pondok Indah, an increase in the US dollar rates was generated particularly because Arcadia Office Park raised their rent by as much as 20% QoQ following Menara Talavera which initiated the adjustment in the early part of 2012. Average rental rates in US dollar denominated buildings in TB Simatupang were US$15.45/sq m/month which represents an increase of 12% over the previous quarter. The average rental tariff in rupiah was IDR117,183/sq m/month.
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AvERAgE ASKINg RENTAl RATES IN THE OuTSIdE CBd duRINg 2005 - 2012
IDR 153,600 IDR 134,400 IDR 115,200 IDR 96,000 IDR 76,800 IDR 57,600 IDR 38,400 IDR 19,200 IDR 0 2005 2006 2007 2008 Rp 2009 US$
$16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2010 2011 2012
Strata-Title Offices
CBD
A total of 805,829 sq m of strata-titled office space is recorded in the CBD as of 4Q 2012. The latest strata-titled office building entering the market is Tower One at The City Center with total semi-gross area of around 84,000 sq m. During 2012 there were four strata-title buildings completed and in operation including, Multivision Tower, AXA Tower, Office 8 and The City Center. New strata-titled office space of 214,995 sq m during 2012 was the highest annual supply since 1990 but 2013 will only see a very limited supply of 11,000 sq m from one building which was previously projected to be completed in 2012 but which postponed operations until 2013. On the contrary, around six strata-titled office buildings are predicted to flood the market in 2014 - 2015 with around 400,000 sq m of strata-titled office space. Two of these buildings, Gran Rubina and Sahid Sudirman Center are currently under construction, while others, like Ciputra World Jakarta 2, The Noble House and Office at St. Regis have confirmed that they will start construction soon. The sales performance of strata-titled office has been quite astonishing with the current take-up rate of 98.9% (leaving only 1% space unsold or less than 10,000 sq m). This is likely to continue in 2013 since 66% of the projected supply for that year has been pre-committed. Such conditions will lead prices to see further adjustment next year. Currently, the average selling price of stratatitled office space in the CBD is IDR27.8 million/ sq m and US$3,313/sq m for office buildings charging in US dollars. This indicates that asking prices for office buildings in rupiah have experienced an escalation by 5.4% compared to the previous quarter and in one year prices have climbed by 23.3%. Meanwhile, the price discrepancy QoQ in US dollars was somewhat higher, i.e. up by 12.9% or 31.3% YoY. Given the vibrant market, the current asking price ranging from IDR30 to 45 million/sq m will strongly move ahead in 2013.
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AvERAgE ASKINg RENTAl RATES IN THE OuTSIdE CBd duRINg 2005 - 2012
IDR 35,000,000 IDR 30,000,000 IDR 25,000,000 IDR 20,000,000 IDR 15,000,000 IDR 10,000,000 IDR 5,000,000 IDR 0 2001 2005 2009 2003 2007 2010 2000 2002 2004 2006 2008 2012 Rp33,000,000 1996 1998 1995 1999 1997 2011 $3,646 $3,125 $2,604 $2,083 $1,562 $1,042 $521 $0
CBD (IDR)
Outside (IDR)
CBD (USD)
OuTSIdE CBd
Strata-titled offices are becoming more popular, not only in the downtown area but also in the outside the CBD area where 92% of the total 404,243 sq m was sold out. During 2012, there was a total of 132,980 sq m of new strata-titled space available but this did not reduce the takeup level because pre-commitment absorption was high. Furthermore, the pre-committed take-up level for future office buildings projected to begin operations in 2013 - 2014 has reached 28% as of 4Q 2012. This situation has stimulated asking prices to edge higher. Currently, the asking price for office space in rupiah increased by 2.6% QoQ while the YoY change shows a substantial figure of 24.6%. Furthermore, the rapid increase also triggered the future strata-titled offices to adjust their prices. The chart below presents the price difference between the average asking price in early 2012 and the average current price at the end of 2012 which demonstrates an increase of 15 to 20% in one year. The average price shown in the chart is the combination of the average price of new and future strata-titled buildings being marketed in 2012.
THE gAP BETWEEN INITIAl ANd CuRRENTS AvERAgE PRICE duRINg 2012 OF NEW ANd FuTuRE OFFICE BuIldINg
Outside CBD
CBD
Rp17,000,000
Rp27,000,000
Rp23,000,000
Rp25,000,000
South and West Jakarta are two areas that currently have quite a few strata-titled office buildings both existing and under construction. The average asking price for office buildings in West Jakarta was IDR23.4 million / sq m. Strata-title office buildings located in Slipi, West
Jakarta are currently offered at between IDR18.0 and 26.0 million / sq m. Besides that, Puri Indah and Kebun Jeruk, also in West Jakarta, appear to be a more popular area for strata-titled offices where asking prices range from IDR24.0 to 25.0 million/sq m.
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Rp29,000,000
Rp35,000,000
Rp15,000,000
Rp19,000,000
Rp21,000,000
Rp31,000,000
Meanwhile, the TB Simatupang area is still the main supplier for strata-titled office buildings in South Jakarta. There are currently six stratatitle office buildings being built in this corridor with the average asking price of IDR22.4 million/sq m. In addition to TB Simatupang,
there are also two under construction stratatitled office buildings located in Kebayoran and Kasablanka, South Jakarta. Prices in this area were at IDR30 - 35 million/sq m due to their proximity to the main commercial area.
SERvICE CHARgES
While base rental rates trended upward during the year, services charges were relatively stable. Thus far, there has not been any trigger to stimulate tariff increases. But the market is anticipating a different story for next year, given some adjustment plans which will take effect toward operational cost. In the CBD, the overall service charges initially started at IDR55,086/sq m/month early in 2012 before reaching IDR56,938/sq m/month in 4Q 2012. On the US dollar front, service charges were up from US$6.31/sq m/month a year ago to US$6.37/sq m/month in 4Q 2012. Nothing changed much in the Premium and Grade A office buildings. Service charges were only adjusted modestly by 6% YoY to US$6.68/ sq m/month. Meanwhile, in the US dollar, Grade A office buildings, service charges were on average IDR60,745/sq m/month in 4Q 2012 which indicate an increase of 9% over the year. In the same pattern, the average service charge in the outside CBD was relatively stable both in rupiah and US dollars. In 4Q 2012, service charges stood at IDR42,405/sq m/ month and US$5.25 / sq m / month which represent a YoY change of 5 and 7%.
THE OCCuPANCy CBd

The occupancy level in 2011 was one of the highest in office market history. In 2012 where the combination of limited supply and continued demand happened, occupancy level as at the end of the year rose to 97.3%. Total annual office space during 2012 alone has been 95% absorbed and thus total annual office absorption in the CBD reached around 422,000 sq m. Since 2009, total annual absorption of office space has went up gradually following the increasing business expansion. The year 2013 will be quite challenging for office market because total new office stock is only 45% of the total supply in 2012. On the other hand such situation will maintain the occupancy level at high level because currently the total projected supply for 2013 has been 40% absorbed. Based on area, all corridors in the CBD have very high occupancy rates particularly in Mega Kuningan, Gatot Subroto and Thamrin where occupancy rates have reached over 98%. Other sub market also showed good occupancy performance for example, Sudirman with high quality office building reached 97.1%, Rasuna Said where new high quality buildings will be located with 95.7% occupancy and Satrio with 93.3%. Going forward, the population of new office buildings will be concentrated in Satrio and Mega Kungingan sub markets where 31% of the total future offices supply will be located. Meanwhile only 10% of future office stock will be located in Sudirman and Rasuna Said. It would be a challenge for Mega Kuningan and Satrio to maintain occupancy level should all of these projects be completed. High occupancy cost in the Premium and Grade A buildings do not preclude tenants from expanding office space in these buildings and in fact, it is very hard to find large spaces. Of all new office buildings completed in 2012, only two buildings have an occupancy level below 90%. Brisk performance of Premium and Grade A office buildings brought the average occupancy rates to 97.6% for this office segment in 2012. While the lower class, several office buildings still had occupancy rates below 70%.
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ANNUAL OFFICE SPACE ABSORPTION IN THE CBD

450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
SPACE AvAIlABlE ANd SPACE COMMITTEd IN THE CBD (2013 - 2015)

Space Absorbed 2013F Annual Supply
2014F
2015F
100,000
200,000
300,000
400,000
500,000
sq m
OuTSIdE CBd
However, the inflow of new office supply edged down the occupancy rates slightly to 92.8% in 4Q 2012. Based on area, office buildings located in North and East Jakarta recorded the highest average occupancy rates. But in fact, this is mostly as a consequence of the limited supply of office buildings in both of these areas. On the contrary, despite a lower occupancy rate, West and South Jakarta were the most active areas to contribute new office supply in the last two years. In West Jakarta, slow absorption experienced by large buildings located in this area maintained an average occupancy rate of only around 90%. Meanwhile in South Jakarta, the average occupancy rate was 93.4%. In active sub-markets like TB Simatupang, finding ample office space is tough, evidenced by the current occupancy rate of 97.5%. During the year, new transactions were dominated by deals in new buildings and will only affect the overall occupancy when the buildings go into operation. Pre-commitment levels for buildings scheduled to be in operation in 2013 in TB Simatupang area have reached 55%, signalling that the market will remain vibrant in 2013.
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ANNUAL OFFICE SPACE ABSORPTION IN THE OuTSIdE CBD

300,000 250,000 200,000 150,000 100,000 50,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
SPACE AvAIlABlE ANd SPACE COMMITTEd IN THE OuTSIdE CBD (2013 - 2015)
Space Absorbed 2013F Annual Supply
2014F
2015F
100,000
200,000
300,000
400,000
500,000
sq m
Outlook
Given auspicious economic projections, business activity is projected to carry on in 2013. Further, an independent report issued by PWC and the Urban Land Institute called Emerging Trends in Real Estate Asia Pacific 2013 placed Jakarta as the number one investment and development destination. Investors positive perception will help the real estate market to perform. Corporations with local market oriented products like finance, banking, insurance, FMCG and automotive enjoy their growing period and will likely expand their business operations. On the other hand, new office stock will be limited in 2013. Combining this limited supply and demand (continued inquiries for office space) would be an unavoidable factor for rental rates to move forward. After all, the occupancy cost (base rental rates and service charge) would soar given the government plan to increase the electricity tariff, parking tariff, minimum regional wages and fuel price. On the other hand, the heightening occupancy cost must have been a torment for exportoriented businesses amid the shadow of the European economic slowdown. We have heard that some tenants have opted to be costefficient in anticipation of the rising rental cost by reconfiguring office space (putting more hot desktops for mobile employees) or relocating to lower cost premises. The rising rental rates have been a blessing for the strata-titled market particularly, in the CBD area. With the current rental rates, having a strata-title should be feasible for either investment or owner-occupation. The monthly cost of renting office space is now somewhat equal to paying monthly instalments (principal at the currently low lending rate) when buying strata-titled office space using a bank loan. Another advantage is that the premises will become the owners asset at the end. We have started seeing either tenants shift their leasing plans to owning a strata-titled asset while occupying it or investors buying strata-titled space for leasing it out.
P. 13 | COllIERS INTERNATIONAl
jakarta | 4Q 2012 | APARTMENT
Apartment Sector
Apartments For Strata-title Sale
Supply
During 4Q 2012, there were eight strata-title apartment projects entering the market, consisting of almost 6,000 units. These new projects are scattered in several areas of each sub-market like the CBD, and West Jakarta, while there is one project in South Jakarta and one in North Jakarta. Three projects in the CBD are located in Jl. Rasuna Said, including Verde Apartment and The Wave (Sand Tower), and another one is in Jl. Gatot Subroto i.e., Tamansari Semanggi (Tower A) previously known as Hollywood Residence. In West Jakarta there are two apartment towers at The Presidential Suites and The Ambassador Suites in the St Moritz superblock located in the Puri Indah area, providing a total of 264 units and one stand-alone project located in Tanjung Duren, i.e., Westmark Apartment. The rest are LIST OF COMPlETEd PROJECT IN 4Q 2012 two projects developed by Agung Podomoro comprising Green Palace Apartment (Tower P) in South Jakarta and Green Bay Pluit (Coast View) in North Jkaarta. The Green Palace Apartment is part of Green Palace Apartment block and part of a huge integrated apartment compound called Kalibata City. The first block called Kalibata Residence is also part of Kalibata City catering to the middle- to low-class segment while Green Palace aims at upper segmentation. A massive apartment development, Green Bay Pluit, with a total of 3,200 units is provided by the operation of the first four apartment towers called Coast View Apartment which are part of a huge apartment compound called Green Bay Pluit. Both are Agung Podomoros development.
APARTMENT NAME Green Palace Apartment (Tower P) Westmark Apartment The Wave (Sand Tower) St. Moritz (The Presidential Suite Tower) St. Moritz (The Ambassador Suite Tower) Green Bay Pluit (Coast View) Tamansari Semanggi (Tower A) Verde Apartment (2 Towers)
lOCATION Kalibata Raya Tanjung Duren Rasuna Said Puri Indah Puri Indah Pluit Karang Ayu Gatot Subroto Rasuna Said
REgION South Jakarta West Jakarta South Jakarta West Jakarta West Jakarta North Jakarta South Jakarta South Jakarta
#uNITS 630 550 334 124 140 3,200 620 317
The Jakarta apartment market remained upbeat in alignment with the robust national economy and healthy business environment. The supply of apartment units in Jakarta witnessed an increasing annual growth of 20.2% from 2011 to 2012, higher than that in 2010 - 2011 which was 18.97%. Throughout 2012, the total annual
supply of strata-title apartments was 19,706 units, bringing the cumulative supply to a total of 117,276 at the end of the year. For the last five years, since the onset of the global financial crisis in 2008, the total annual supply during 2012 is the highest.
P. 14
lIST OF NEW STRATA-TITlE APARTMENT SuPPly IN 2012
APARTMENT NAME Denpasar Residence (Tower Kintamani) Denpasar Residence (Tower Ubud) Tamansari Semanggi (Tower A) Thamrin Executive Residence The Wave (Coral Tower) The Wave (Sand Tower) Verde Apartment (2 Tower) Menteng Square (3 Towers) Cervino Village (2 Towers) Green Palace Apartment (6 Towers) One Park Residence (3 Towers) Residence 8 at Senopati (2 Towers) Senopati Suites Gading Nias Residence (Grand Emerald) Green Bay Pluit (Coast View) 4 Towers Regatta (Tower Rio De Janeiro) East Park Apartment (Tower B) Belmont Residence (Tower Everest) Central Park Residence (Tower Adeline) City Garden Residence Puri Park View (2 Towers) Season City (Tower C) St. Moritz (The Ambassador Suite Tower) St. Moritz (The Presidential Suite Tower) St. Moritz (The Royal Suite Tower) Westmark Apartment Satrio Satrio
lOCATION CBD CBD CBD CBD CBD CBD CBD
REgION
dEvElOPER Agung Podomoro Group Agung Podomoro Group Wika Realty Agung Podomoro Group Bakrieland Develoopment Bakrieland Develoopment Far Point Bahama Development Pakkodian Agung Podomoro Group Intiland Agung Sedayu Group Mahkota Asia Graha Agung Podomoro Group Agung Podomoro Group Intiland Cakra Sarana Persada Gapura Prima Agung Podomoro Group Agung Abadi Group KSO PT Pelaksana Jaya Mulia & PT Alam Jaya Perkasa Agung Podomoro Group Lippo Karawaci Lippo Karawaci Lippo Karawaci Cowell Development
#uNIT 550 550 620 400 324 334 317 1,600 518 3,780 379 650 103 747 3,200 110 550 553 350 600 1,723 714 140 124 220 550
Gatot Subroto Kebon Kacang Rasuna Said Rasuna Said Rasuna Said Proklamasi Casablanca Kalibata Gandaria Senopati Senopati Pegangsaan Dua Pluit Karang Ayu Pantai Mutiara KRT Radjiman Meruya Ilir S. Parman Cengkareng Pesanggrahan Grogol Puri Indah Puri Indah Puri Indah S. Parman
Central Jakarta South Jakarta South Jakarta South Jakarta South Jakarta South Jakarta North Jakarta North Jakarta North Jakarta East Jakarta West Jakarta West Jakarta West Jakarta West Jakarta West Jakarta West Jakarta West Jakarta West Jakarta West Jakarta
STRATA-TITlE APARTMENT CuMulATIvE SuPPly

140,000 120,000 100,000
Units
80,000 60,000 40,000 20,000 0 2005 2006 2007 2008 2009 2010 2011 2012
P. 15
NEW SUPPLY PIPELINE
APARTMENT NAME
lOCATION
REgION
#uNIT
DEvElOPMENT STATuS
2013
Ambassade Residence (Tower A) Belmont Residence (Tower Montblanc) Luxurious Raffles Residence dGreen Pramuka (Tower Faggio & Tower Pino) East Park Apartment (Tower A) GP Plaza Green Central (Tower Cerberra) Green lake Sunter (2 Towers) Green Palace Apartment (Tower S) Green Palace Apartment (Tower V) Kebagusan City Tower B Kemang Village (The Infinity) Kemang Village (The Tiffany) MyHome Apartment Pakubuwono Terrace (Tower I) Pancoran Riverside (Tanjung Kalibata) Pasar Baru Mansion (2 Towers) Rusunami Delta Cakung (Tower 1) Sentra Timur Residence (Stage 2) St. Moritz (New Royal Suite Tower) Sunter Icon (2 Towers) The East at Essence The Grove Suite The H Tower The Residences at Dharmawangsa 2 The Royal Springhill (Tower Magnolia) The Royal Springhill (Tower Marygold) The Windsor (2 Towers) Titanium Square Verde Apartment (Tower East) Puri Denpasar Meruya Ilir Satrio Jend. A. Yani KRT Radjiman Gatot Subroto Gajah Mada Sunter Kalibata Kalibata Kebagusan Pangeran Antasari Pangeran Antasari Satrio Ciledug Pengadegan Timur Pasar Baru Cakung Pulogebang Puri Indah Sunter Dharmawangsa HR Rasuna Said HR Rasuna Said Dharmawangsa Kemayoran Kemayoran Puri Indah Pasar Rebo HR Rasuna Said CBD West Jakarta CBD Central Jakarta East Jakarta CBD West Jakarta North Jakarta South Jakarta South Jakarta South Jakarta South Jakarta South Jakarta CBD South Jakarta South Jakarta Central Jakarta East Jakarta East Jakarta West Jakarta North Jakarta South Jakarta CBD CBD South Jakarta Central Jakarta Central Jakarta West Jakarta East Jakarta CBD 234 Under Construction 350 Under Construction 88 Under Construction 2,900 Under Construction 550 Under Construction 320 Under Construction 420 Under Construction 2,400 Under Construction 630 Under Construction 630 Under Construction 548 Under Construction 175 Under Construction 240 Under Construction 136 Under Construction 750 Under Construction 1,900 Under Construction 520 Under Construction 1,700 Under Construction 1,000 Under Construction 150 Under Construction 600 Under Construction 244 Under Construction 151 Under Construction 9 Under Construction 89 Under Construction 256 Under Construction 128 Under Construction 340 Under Construction 725 Under Construction 114 Under Construction
2014
Botanica Apartment (3 Towers) Casa Grande Residence (Montana Tower) Casa Grande Residence (Montreal Tower) Casablanca East Residence Dukuh Golf Residence (Aurora Tower) Dukuh Golf Residence (Bellavista Tower) Gading Greenhill Green Bay Pluit (Bay View) Kemang Village (The Intercontinental) Kemang Village (The Metropolitan) LA City Apartment (Tower A) Simprug Casablanca Casablanca Pahlawan Revolusi Kemayoran Kemayoran Pegangsaan Dua Pluit Karang Ayu Pangeran Antasari Pangeran Antasari Lenteng Agung South Jakarta CBD CBD East Jakarta Central Jakarta Central Jakarta North Jakarta North Jakarta South Jakarta South Jakarta South Jakarta 626 Under Construction 284 Under Construction 313 Under Construction 1,500 Under Construction 522 Under Construction 612 Under Construction 700 Under Construction 3,096 Under Construction 400 Under Construction 150 Under Construction 980 Under Construction continued
P. 16 | COllIERS INTERNATIONAl
APARTMENT NAME La Maison Barito La Venue - South Tower Metro Park Residence Northern Ancol Residence Pakubuwono Terrace (Tower II) Pluit Seaview (Tower Maldives) Setiabudi Sky Garden (Tower 1) Sherwood Apartment (3 Towers) Signature Park Grande Sky Terrace Lagoon St. Moritz (The New Ambassador Suite Tower) St. Moritz (The New Presidential Suite Tower) St. Moritz (The New Royal Suite Tower) Sudirman Suites The Aspen The Bellevue The Grove The H Residence The Hive @Tamansari The Pakubuwono Signature Senopati Penthouse Capitol Park Apartment Elpis Residence St. Regis (Previously The Icon) Teluk Intan (Tower Saphire) Barito
lOCATION
REgION South Jakarta South Jakarta West Jakarta North Jakarta South Jakarta North Jakarta CBD North Jakarta East Jakarta West Jakarta West Jakarta West Jakarta West Jakarta CBD South Jakarta South Jakarta CBD East Jakarta East Jakarta South Jakarta South Jakarta Central Jakarta Central Jakarta CBD North Jakarta
#uNIT
DEvElOPMENT STATuS continuation
80 Under Construction 341 Under Construction 1,200 Under Construction 800 Under Construction 720 Under Construction 940 Under Construction 426 Under Construction 320 Under Construction 1,100 Under Construction 525 Under Construction 200 Under Construction 200 Under Construction 196 Under Construction 380 Under Construction 860 Under Construction 60 Under Construction 438 Under Construction 383 Under Construction 422 Under Construction 188 Under Construction 63 Under Construction 400 Under Planning 791 Under Planning 284 Under Planning 350 Under Planning
Pasar Minggu Kebon Jeruk Ancol Ciledug Pluit Setiabudi Kelapa Gading MT Haryono Kalideres Puri Indah Puri Indah Puri Indah Sudirman Fatmawati Pondok Indah HR Rasuna Said MT Haryono DI Panjaitan Pakubuwono Senopati Salemba Gunung Sahari Gatot Subroto Teluk Gong
DISTRIBUTION OF APARTMENTS SuPPly IN 2012 BASED ON LOCATION

West Jakarta 23.26% East Jakarta 2.33% CBD 18.60% Central Jakarta 6.98%
North Jakarta 13.95% South Jakarta 34.88%

P. 17
All of 19,706 apartment units during 2012 are provided by 22 apartment projects comprising of 42 new apartment towers. Quite a few of these developments were targeted at the middle class segment offering a price per sq m of between IDR 11 million/sq m and IDR 18 million/ sq m . The composition of apartment projects
during 2012 was mainly located at South Jakarta area, dominated by middle-low class apartment with price ranging from IDR 7.5 million/sq m to IDR 8.2 million/sq m. Meanwhile, only one apartment project being built in East Jakarta and this apartment intends for lower segment of market.
SUPPLY APARTMENT IN JAKARTA BASED ON AREA (#UNITS) 2006 2012
West Jakarta East 21.35% Jakarta 0.35%
CBD 28.39%
East Jakarta 5.10%
West Jakarta 25.28%
CBD 19.08%
North Jakarta 19.07%
South Jakarta 10.91%
Central Jakarta 19.92%
dISTRIBuTION OF APARTMENT BASEd ON lOCATION duRINg 2006 - 2014F

100% 80% 60% 40% 20% 0% 2006 CBD 2007 Central Jakarta 2008 2009 2010 2011 2012 East Jakarta 2013F 2014F
South Jakarta
North Jakarta
West Jakarta
The location of new apartment development has been shifting to the outside of the CBD area for the last five years. As seen in the chart above, since 2007, the number of apartment units in the CBD (including the areas like Sudirman, Mega Kuningan, Rasuna Said, SCBD, and Thamrin) has dwindled. Prior to 2007, the CBD had been flooded by upper-class apartment development due to its proximity to the main business locations and premium shopping malls. As vacant land is becoming scarce in the CBD area, land prices have accordingly jumped significantly over the last two years. Therefore, looking at supply composition over the next two years, less and less apartment developments will be built in the CBD.
COllIERS INTERNATIONAl | P. 18
In South Jakarta, apartment development started mushrooming in 2008 with the influx of four apartment projects. In 2010, South Jakarta provided around 13% of the total units in Jakarta with favourite apartment locations like Kemang, Terogong and Permata Hijau, dominated by middle- to upper-class apartments. In 2011, the area became more populated with the completion of massive projects like Kalibata City and the area will continue to grow into 2015 with a concentration in the Pancoran, Kemang and Senopati areas.
The East Jakarta area started seeing a robust market in 2009 with the operation of Menara Cawang. Since then, three projects entered the market, particularly within the Jalan MT Haryono Cawang corridor including Signature Park, MT Haryono Square and MT Haryono Residence. In 2013, the upcoming projects will mainly be located in the Cakung and Pulo Gebang areas, while in 2014, the MT Haryono Cawang corridor will see three middle-class projects such as The H Residence, Signature Park Grande and The Hive @ Tamansari. Other areas, like Cipinang will have projects lke Casablanca East Residence. Apartment development in areas like South Jakarta and West Jakarta is becoming more active over the last two years with more new projects. In South Jakarta, huge projects with
massive units include Kalibata Residence and Green Palace Apartment, while Seasons City, Royal Mediterania Garden Residence and Central Park Apartment have been dominating West Jakartas apartment supply for the last two years. During 2012, the Agung Podomoro Group continues to be the most active development group in building a number of apartment projects like Green Palace Apartment, Green Bay Pluit, and Denpasar Residence which are scattered around different areas. Intiland Development ranked second with four apartment towers, i.e. three from One Park Residences, located in Gandaria, South Jakarta and one from Regatta (Rio de Janeiro), located in Pantai Mutiara, North Jakarta.
MOST ACTIvE dEvElOPERS duRINg 2012 (BASEd ON NuMBER OF PROJECTS)

Agung Abadi Mahkota Asia Graha Farpoint Realty Group Wika Realty 2% Gapura Prima 5% 3% Cowell Development Agung Sedayu Group Pakkodian 2% 2% 2% 5% 5% Bakrieland 5% Other 7% Bahama Development 7% Lippo Karawaci 7% Agung Podomoro Group 38%
Intiland 10%
APARTMENT MARKET IN 2013 - 2014

Based on our database, we anticipate further supply growth up to 2014 with an additional 39,147 units scheduled to be on the market. As mentioned earlier, the new apartments will be concentrated in the area outside of the CBD. In East Jakarta, growing areas like MT. Haryono Cawang corridor will have an additional 7,784 units of strata-title apartments. Since 2010, East Jakarta has been consistently growing as an apartment location compared to the other five municipalities in Jakarta. Along the MT. Haryono Cawang corridor, there are three apartment projects including The H Residence, The Hive and Signature Park Grande, which will be targeted at the middle- to upper-class segments while other areas in East Jakarta (further east), like Cakung and Jatinegara, have Rusunami Delta Cakung and East Park Apartment which are targeted at the low-class segment.
P. 19
dISTRIBuTION OF FuTuRE APARTMENT uNITS IN JAKARTA uNTIl 2014

West Jakarta 21.14% East Jakarta 8.76% CBD 16.63%

Demand
The Jakarta apartment market performed somewhat well in 2012 on the back of solid domestic demand. In line with the growth of supply, the absorption rate of strata-title apartments this year showed an upward trend. Overall, at the end of 2012, take-up rates of strata-title apartments reached 82.2%, increasing by 6% compared to 2011. The takeup rates in 2012 is the best ever in apartment history. The under-construction apartment projects recorded good sales compared to last quarter, increasing by 3.4%. Based on area, the CBD has the highest absorption rate of 87.7%, AvERAgE TAKE-uP COMPARISON y-O-y
REGION CBD South Jakarta Outside CBD 4Q 2011 86.4% 75.2% 73.9% 4Q 2012 87.7% 86.1% 79.6% QoQ 1.2% 11.1% 5.7%
followed by South Jakarta and non-CBD (outside of the CBD and South Jakarta areas) with 86.1 and 79.6%, respectively. South Jakarta showed a significant year-on-year (YoY) increase, representing a rise of 11.2% over last years figure. This significant YoY increase was dominated by the pre-sales performance of under-construction apartment projects. Senopati, Permata Hijau, Pakubuwono, Simprug and Gandaria continue to be the most preferable locations in the South Jakarta area. Overall, around 67% of the total approximately 39,000 units proposed for completion between 2013 and 2014 have been reported as sold, leaving about 13,000 units available for sale.
P. 20
Among other factors that stimulate apartment buying is a growing economy is the growing middle class who are now thinking of buying an apartment either as a full-time residence, occasional living, leasing or for investment. The growing economy also creates traffic, particularly in the business area. This promotes apartment living in town that reduces time travelling to the work place. On the other hand, the increasing land prices in Jakarta, especially in prime areas, also provides the foundation for apartment price appreciation. Meanwhile, the corporate activities remained vigorous for the last two years which potentially leads to the creation of more leasing demand. This will potentially become a pulling factor for investors to buy apartments, especially in premium areas, such as Sudirman, SCBD, Gatot Subroto,
Thamrin, Rasuna Said and Kuningan. Colliers International Indonesia noted a yield for apartments in Jakarta ranging from 5 to 9%. The increasing demand for apartments is also fuelled by several promotional programmes offering various incentives such as three years cash instalments without interest, direct prizes and buyer get buyer bonuses whereby buyers referring another buyer will get a discounted price. Further ahead, the strata-title apartment market will receive a total 39,147 units during 2013 and 2014. The competition for the next two years seems to be intense, however, with precommitment sales so far reaching 67%, the remaining sales work will be a lot easier.
SAlES RATE IN 2012 ANd PRE-COMMITMENT SAlES RATE FOR SuPPly IN 2013 - 2014 PERIOd
Supply 2012 Absorbed 19,706 17,979 18,297 14,497 20,850 11,629 0 5,000 10,000 15,000 20,000 25,000
2013
2014
Units
AvERAgE TAKE-uP COMPARISON q-O-q OF uNdER CONSTRuCTION APARTMENT PROJECTS

REGION CBD South Jakarta Outside CBD 3Q 2012 73.6% 65.7% 64.9% 4Q 2012 77.9% 76.2% 66.2% QoQ 4.38% 10.40% 1.27%
P. 21
The above graph shows pre-sales effort made before the apartment is ready to occupy. Thus far, of the total approximately 18,297 apartments which will be completed in 2013, 79.2% have been absorbed. The middle- to upper-class projects such as MyHome Apartment, located in the CBD; The Residence at Dharmawangsa 2, in South Jakarta; Springhill Residence and St.Moritz (New Royal Suite Tower) located in the outside area are some successful projects which will be in operation in 2013. On the other hand, of the available units projected to be in operation in 2014, 56% have been absorbed. Some projects which have good absorption rates are from upper- and middle-to upper class developments. The upper class projects
such Setiabudi Sky Garden, located in CBD, and Botanica Apartment, located in Simprug, South Jakarta area, recorded 75 - 78% pre-committed take-up rates, while in the outside the CBD area, Sherwood Apartment of a middle- to upper-class project, which is located in Kelapa Gading, North Jakarta, has reported selling around 85% of the total units. Overall, the South Jakarta area saw better sales performance than the CBD and non-CBD areas, increasing by 10.4% compared to the previous quarter. Meanwhile, the CBD still maintains the highest take-up rate, with 78% having been sold.
Price
Average asking prices of strata-title apartments in Jakarta have continued to demonstrate growth over last years figures. By the end of fourth quarter, on a YoY comparison, the average asking price in the CBD, South Jakarta and outside the CBD areas showed an upward trend increasing by an average of 25%, 21%, and 6%, respectively. By location, South Jakarta showed the most significant increase since 4Q 2011, about 17% higher compared to a 4Q 2011 to 4Q 2012 YoY change, followed by the CBD about 14% higher than the 4Q 2011 to 4Q 2012 YoY change. South Jakarta registered a substantial increase in price since the end of 2011 because many new projects launched with their initial asking prices higher than the average price, particularly the projects located in premium areas (Senopati, Simprug, and Pakubuwono) which offer better building quality, different concepts and a more green environment. Some projects which recorded remarkable sales have also motivated developers to introduce new higher prices.
AvERAgE ASKINg PRICE BASEd ON SuB MARKETS

35,000,000 30,000,000 R p/ s q m 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 4Q 2010 1Q 2011 CBD 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 South Jakarta Non CBD Average
P. 22
AvERAgE ASKINg PRICE IN dIFFERENT SuB MARKETS

AREA CBD South Jakarta Outside CBD Average 4Q 2010 Rp 21,443,924 Rp 16,556,357 Rp 14,385,630 Rp 16,479,008 4Q 2011 Rp 23,828,588 Rp 17,189,527 Rp 14,812,173 Rp 17,493,209 4Q 2012 Rp 29,817,588 Rp 20,717,032 Rp 15,656,812 Rp 19,572,483 2010 vS 2011 11.12% 3.82% 2.97% 6.15% 2011 vS 2012 25.1% 20.5% 5.7% 11.9%
Overall, three circumstances have led to the increasing prices. Among them are high absorption of strata-title apartments in Jakarta; the climbing land values, particularly in the CBD and South Jakarta (due to the scarcity of land in those areas); and rising construction costs. In general, the overall price climb during 2012 was mainly due to the influx of new apartments with prices above the average market price and the under-construction apartment projects with high prices. As explained in the demand section above, South Jakarta became the most preferable location during 2012 with new projects catering to the upper segment. The positive perception toward residential property products which led to a continued increase in sales inspired developers to adjust apartment price. Among projects in South Jakarta that introduced increased asking prices are Pakubuwono Signature, Senopati Suites 2,
Kentjana Residence, The Residence at Dharmawangsa 2, Botanica Apartment, Providence Park and 1 Park Avenue. On the other front, with a limited number of units available, the CBD managed to maintain the highest average asking price up to the end of 2012. In the outside the CBD area, where quite a few developments offered a massive number of units, leaving many available units, has made the average asking price relatively stable. Cash instalments is the most common payment method opted for by apartment buyers, after hard cash payment and bank loan (Indonesian term for Kredit Pemilikan Apartemen or KPA). Cash instalments was chosen because people have cash and for privacy reasons, they do not want to go through convoluted procedures when borrowing using a bank mortgage. Meanwhile, hard cash is preferred by buyers to benefit from big discounts.
PREFERREd PAyMENT METHOd FOR APARTMENT BuyER
KPA (Mortgage) 19%
Cash Instalment During Construction 57%
Hard Cash 24%
P. 23
By our assessment, the average price of apartment units in 2013 will increase by 11%. The most significant increment is anticipated for apartment projects in the CBD followed by South Jakarta, due to high demand from endusers and investors, especially since those areas have a very strong expatriate rental market. As for the CBD, we expect to see further growth in apartment prices of around 22% over 2013. The increase will be triggered by projects which are still under construction
AvERAgE APARTMENT PRICE
25,000,000 20,000,000 P r ice/sq m 15,000,000 10,000,000 5,000,000 0 2010
and some projects which are approaching their scheduled hand-over dates, such as Raffles Residence and MyHome apartment form Ciputra World Jakarta. Meanwhile, with quite a few projects offering large numbers of units in the outside the CBD area, prices will likely remain relatively stable. However, the overall price in the outside the CBD area will increase moderately with the influx of upper-class apartment projects such as St Moritz and The Windsor in Puri Indah, West Jakarta.
2011
2012
2013F
HISTORICAl APARTMENT PRICE By SuB MARKETS

AREA CBD South Jakarta Outside CBD Average 2010 Rp 21,443,924 Rp 16,556,357 Rp 14,385,008 Rp 16,479,008 2011 Rp 23,828,588 Rp 17,189,527 Rp 14,812,173 Rp 17,493,209 2012 Rp 29,817,081 Rp 20,717,032 Rp 15,656,812 Rp 19,572,483 2013F Rp 36,362,582 Rp 25,167,739 Rp 16,920,083 Rp 21,725,457
P. 24
Apartment For Lease (Serviced and Non-serviced)
Supply
Only one new development of apartments for lease (non-serviced) in Jakarta entered the market during the last quarter of 2012, i.e. Apartemen Plaza Senayan (Towers C and D) which is the extension of Apartemen Plaza Senayan (Towers A and B), comprising 217 leased apartment units and offering a range of one-, two-, three-bedroom and penthouse units. With the influx, the cumulative supply of non-serviced apartments is 3,565 units. Overall, the total units of apartment for lease (both serviced and non-serviced) in Jakarta was 8,246, of which around 57% are operated as serviced apartments. Overall, the development of apartments for lease in Jakarta has been limited for the past few years. Since 2010, a total of four apartment for lease projects comprising 348 units (nonserviced) were taken out from our database of apartment for lease as they underwent major refurbishment and some of them have been converted to strata-title apartments.
LIST OF REFuRBISHEd APARTMENTS FOR lEASE PROJECTS (2010 - 2012)
APARTMENT NAME Menara Budi Ratu Plaza Pasadena Pulomas Puri Apartment
lOCATION Rasuna Said Sudirman Pulomas Puri Indah
REgION CBD CBD East Jakarta West Jakarta
CATEgORy Non-Serviced Non-Serviced Non-Serviced Non-Serviced
#uNITS 157 46 50 95
The number of future projects of apartments for lease is quite limited compared to apartments for sale. Only a few potential projects are in the planning stages. Meanwhile, there are three apartment for lease projects in the pipeline which are estimated to enter the rental apartment market in the next two years. Ascott Kuningan and Fraser Residence Menteng are
predicted to open in 2013, while Frasers Suites Jakarta, part of the Ciputra World 2 commercial compound, will be open in 2014. Other than the influx of future apartment units, Kempinski Serviced Apartment is planning to close 40 serviced apartment units, from January to March 2013, due to renovation works.
LIST OF FuTuRE APARTMENTS FOR lEASE PROJECTS
APARTMENT NAME Ascott Kuningan Fraser Residence Menteng Fraser Suites Jakarta
lOCATION Satrio Menteng Satrio
REgION CBD Central Jakarta CBD
CATEgORy Serviced Serviced Serviced
#uNITS 186 TBA 200
P. 25
Occupancy
Apartments for lease commonly target the corporate leasing market, which particularly demand their hospitality services and flexibility in leasing term. In general, occupancy levels of apartments for lease experienced a minor decrease at the end of 2012 to an average of 78.3%, down from the previous quarter at 79.1%. This situation occurred mainly because of the additional supply of 217 units of nonserviced apartments which affected the overall OCCuPANCy FOR SERvICEd APARTMENT
REGION CBD South Jakarta Outside CBD 3Q 2012 84.07% 83.93% 60.24% 4Q 2012 84.55% 87.10% 61.36%
calculations. In the non-serviced apartment market, the occupancy level dropped quite a bit to 80.6% from the previous 88%, mainly due to the operation of Apartment Plaza Senayan mentioned above. Meanwhile, serviced apartments performed well at the end of 2012. Demand for serviced apartments was largely from new expatriates from newly established companies in Jakarta and or from expanding companies.
OCCuPANCy FOR NON-SERvICEd APARTMENT

REGION CBD South Jakarta Outside CBD 3Q 2012 88.03% 79.23% 76.02% 4Q 2012 86.65% 79.72% 75.96%
The overall occupancy rate in South Jakarta commenced as the highest in both market i.e. non-serviced and serviced apartment. Inquiries during the reviewed quarter were largely from manufacturing companies, followed by contractors and consultant groups from Japan. All in all, with the expectation of a rosy economy in 2013, inquires for leased apartments is anticipated to ameliorate along with greater corporate activity and an improving number of
expatriates and business travellers to Jakarta. Nevertheless, such a situation would be difficult to be applicable for apartments for lease located in the non-CBD areas since the majority of the developments are old projects and lack the amenities which newer developments offer. On the contrary, demand will be concentrated on selected quality projects, such as serviced apartments managed by international hotel operators and located in preferred areas like the CBD and South Jakarta.
P. 26
Rental Rates
Nothing changed during the quarter and the average rental rates of apartments for lease remained stable. However, since the majority of apartments for lease are offered in US dollars while the remainder are offered in local currency, the average rental rates in US dollars dropped somewhat due to the strengthening US dollar against the rupiah during this quarter. This is because all rupiah rates have to be converted to US dollars to get the overall average asking rental rates. Furthermore, the average asking rental rates of apartments for lease (both serviced and non-serviced) have a RENTAl RATE/Sq M/MONTH
REGION CBD Outside CBD 3Q 2012 $23.72 $14.75 4Q 2012 $23.70 $14.75
depreciation rate of less than 0.1% compared to the previous quarter. All in all, by location, serviced apartments in the CBD maintained average asking rental rates at USD27.52/sq m/month, while the non-CBD area, including South Jakarta, stood at USD21.16/sq m/month. For non-serviced apartments, those in the CBD and non-CBD areas including South Jakarta have average asking rental rates of USD17.02 and 12.25/sq m/month, respectively.
AvERAgE RENTAl RATES FOR SERvICEd APARTMENT

$26.00 R ental Rate/sq m/month $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 CBD Non CBD
AvERAgE RENTAl RATES FOR NON-SERvICEd APARTMENT

$26.00 R ental Rate/sq m/month $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 CBD Non CBD
P. 27
However, over the next year, quite a few serviced apartments, particularly those located in the CBD and operated by international hotel operators, are planning to increase asking rental rates. Optimistic about their high demand, they confidently raised their asking prices by 8 10% per unit, or USD50 - 500. On the other hand, several apartments for lease in South
Jakarta increased their asking rental rates dominated by upgrades to the indoor and outdoor facilities and room furnishings, such as sofa, television and bed. Meanwhile, most landlords of older developments chose to maintain their current rates and were reluctant to increase them for fear that they could lose their current tenants.
Outlook
On the back of a growing economic performance, the apartment market foresees a promising outlook in 2013. The apartment market was very much fuelled by the vigorous domestic market where such property products are perceived to have better returns than other banking products. On the other hand, supply will be adequate in the future, providing a liberty for buyers to opt for different kinds of developments. Despite there being a substantial number of units in the next two years, the market should be in a healthy situation because pre-commitment levels at upcoming developments are quite high. Furthermore, the increasing middle-class urban population will help maintain the apartment market at least at the current level. Besides Jakarta, buyers are potentially coming from wealthy people in other cities in Indonesia like Medan, Surabaya, Kalimantan and Makassar. In the leasing market, demand will still be underpinned by requested from corporations, in particular large-scale overseas companies. The challenge remains for existing apartment for lease projects (both serviced and non-serviced) in Jakarta that such developments are getting older, there is limited stock and most of them are lacking amenities that are offered by newer strata-title developments. Thus, in the leasing market, apartments for lease directly compete with strata-title apartments offered for lease. This opportunity has been grabbed by developers to build strata-title apartments which meet expatriate standards like building specifications, large units, advanced security systems and more facilities.
P. 28
jakarta | 4Q 2012 | RESIDENTIAL EXPAT HOUSING
Residential Expatriate Housing Sector

Expatriate Housing
Supply and Rental Rates

With strong underlying fundamentals and business confidence in Indonesia in line with the growing national economy, the number of multinational companies operating in this country is increasing. This is generally marked by an increasing number of expatriates hired by those companies mainly from western and Asian countries. It has been a common pattern in the expatriate housing market that sales activity slows down in the last three months of the year, particularly because expatriates shift their focus to the year-end long vacation. Nevertheless, home searching activities were surprisingly quite solid in terms of numbers during that period of time. Some expats were actively searching for landed houses and apartments as preparation for starting work in January March 2013. Generally, the expats have to secure their home before they get a work permit. Rental rates of selected expatriate-standard houses and apartments showed an upward trend during second semester (2H) of 2012. Rentals were up mainly due to strong and abundant inquiries for expatriate living accommodation but on the other hand the number of such properties is becoming limited, in particular those that meet expat standards like size, location, quality, furniture and facilities available in one house. Such conditions have led to landlord markets where home owners have a strong bargaining position. Searching for a quality home that meets a required budget is very challenging, particularly in high-demand locations like Pondok Indah, Kebayoran Baru (certain areas which are close to the CBD) and Kuningan. These areas are favourite locations for top management executives with budgets higher than US$4,500/month. For a big house within those areas, the rental per month could reach as high as US$15,000/unit/house. Meanwhile those with budgets ranging from US$3,500 to US$5,000/month have the option of locations like Kemang, Cipete, Cilandak or even Pejaten. During our review in the last six months of 2012, the rental tariff generally climbed in the range of US$500 to the highest of US$3,000/unit house/month. Menteng would be an interesting option for embassy-related expatriates as it provides proximity to the business area; however the stock of good quality houses is limited and hard to find. However, most expatriates working in Jakarta would opt for South Jakarta because it is within the catchment of many international schools, international clubs, international hospital, entertainment centres, shopping spots, offices and other points of interest for expatriates. Having proximity to an international school is one of the utmost considerations when choosing home locations for expatriates with a family. The table below gives a brief description of average land price for residential use in some preferred expatriate locations:
AvERAgE lANd PRICES IN SEvERAl RESIdENTIAl lOCATIONS

lOCATIONS Kuningan Kebayoran Baru Menteng Pondok Indah Permata Hijau Kemang Cipete Pejaten Cilandak AvERAgE lANd PRICE/Sq M IN IdR 21.4 million 19.3 million 19.1 million 17.6 million 15.7 million 8.4 million 7.4 million 7.3 million 6.5 million IN uS$ (EquIvAlENT) 2,490 2,240 2,220 2,050 1,830 980 860 850 760
Colliers International Indonesia - Residential Tenant Representation Services
P. 29
ExPATRIATE HOuSINg RENTAl RATES

lOCATIONS Kuningan 4 - 5 Bedroom House Kebayoran Baru 4 - 5 Bedroom House 3 - 4 Bedroom Townhouse/complex Menteng 4 - 5 Bedroom House Pondok Indah 4 - 5 Bedroom House Permata Hijau, Simpruk 4 - 5 Bedroom House 3 - 4 Bedroom Townhouse/complex Kemang 4 Bedroom Townhouse/complex 3 Bedroom House 4 - 5 Bedroom House Cipete 3 Bedroom Townhouse/complex 4 Bedroom Townhouse/complex 3 Bedroom House 4 - 5 Bedroom House Pejaten 3 Bedroom Townhouse/complex 4 Bedroom House Cilandak 4 Bedroom Townhouse/complex 3 + 1 Bedroom House 4 - 5 Bedroom House 300 - 700 300 - 600 450 - 750 3,500 - 6,500 3,000 - 5,500 3,500 - 7,000 400 - 600 500 - 900 3,500 - 7,000 3,000 - 7,000 200 - 300 400 - 700 300 - 500 400 - 800 2,500 - 3,500 3,500 - 6,000 2,500 - 3,500 3,500 - 7,000 400 - 700 400 - 750 550 - 1,000 3,500 - 5,500 3,000 - 5,000 3,500 - 7,000 400 - 1,500 220 - 240 3,500 - 12,000 2,750 - 4,500 550 - 1,000 4,500 - 15,000 500 - 1,200 4,000 - 15,000 600 - 1,500 250 - 700 4,500 - 15,000 3,500 - 8,000 500 - 900 3,500 - 11,500 SIZE (Sq M) RENTAl RATES (IN uS$/uNIT)
Colliers International Indonesia - Residential Tenant Representation Services
Demand
On the demand side, there were no changes in the types of industries that were looking for expatriate-standard housing. Several lines of businesses such as oil and gas, consultancy (finance and management consultants), and contractors (mostly from Japan) were actively looking during the second half of 2012. In term of area preferences, locations adjacent to international schools are most attractive for expatriates with family and thus residential areas like Pondok Indah are in high demand.
P. 30
Apartments
Supply and Rental Rates

During the second half of 2012, the average rental tariff for selected expatriate apartments experienced minor increases. Overall, rental tariffs are relatively flat for some periods, except for high-demand apartments like Pakubuwono Residence, Pakubuwono View and Dharmawangsa Residence which introduced an increase of US$250 US$750/ month/unit. Demand for selected apartments for expatriates is in line with demand for landed houses as some new companies established their presence in Jakarta. Meanwhile, some existing multinational companies have also expanded, resulting in an increased number of expatriate workers being hired. Some companies would prefer to look for compound houses or apartments for their expats rather than individual landed houses in order to maintain their budget amid the climbing rental costs. Opting for apartments for expatriate accommodation would also be beneficial for a company in event of payment term. An apartment landlord would still welcome a minimum one-year payment in advance while none of the landed house landlords would consider one-year payments; instead they only accept cash in advance for a two to three years contract period.
RENTAl RATES OF SElECTEd APARTMENT PROJECTS IN THE ExPATRIATES lOCATION

lOCATIONS Sudirman 2 Bedroom Apartment 3 Bedroom Apartment 4 - 5 Bedroom Apartment Kuningan 2 Bedroom Apartment 3 Bedroom Apartment Kebayoran Baru 2 - 3 Bedroom Apartment 4 - 5 Bedroom Apartment Menteng 2 Bedroom Apartment 3 Bedroom Apartment Pondok Indah 2 + 1 Bedroom Apartment 3 Bedroom Apartment 4 - 5 Bedroom Apartment Permata Hijau, Simpruk 3 - 4 Bedroom Apartment Kemang 3 Bedroom Apartment Cipete 3 - 4 Bedroom Apartment Cilandak 3 Bedroom Apartment 262 - 300 3,450 - 3,950 220 - 295 3,500 - 5,000 165 - 200 2,500 - 3,500 225 - 300 3,000 2,700 - 4,000 83 - 190 190 - 300 285 - 500 2,700 - 3,100 3,400 - 4,500 5,250 - 5 750 2,000 - 2,500 2,800 - 3,500 3,500 - 4,000 112 - 142 147 - 213 2,000 2,200 - 3,500 120 - 350 400 - 500 1,750 - 4,000 5,500 - 7,000 95 - 145 96 - 323 2,750 - 4,250 3,200 - 4,400 2,000 -2,500 2,500 - 4,000 119 - 121 156 - 238 236 - 513 3,800 - 5,500 4,400 - 6,300 2,500 - 4,000 3,500 - 6,000 4,000 - 8,000 SIZE (Sq M) RENTAl RATES (uS$/uNIT) SERvICEd NON-SERvICEd
P. 31
Occupancy
Upper class apartments generally maintain high occupancy rates of between 81% and 99%. Demand for selected apartments for expatriates is relatively stronger compared to that achieved in the previous semester. The areas most preferred are still in the CBD or areas close by, rather than North, West, and East Jakarta, such as Marriott Executive Residence and ShangriLa Residence. Overall, the occupancy rate for this type of apartment was registered at 88%.
AvERAgE OCCuPANCy RATE OF SElECTEd APARTMENTS PREFERREd By ExPATRIATES

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% A
Notes:
average
A: Dharmawangsa, Shangri-La Serviced Apartment, Marriott Executive Apartment, Pakubuwono Residence, Pakubuwono View B: The Residence, Plaza Senayan, The Plaza Residence, Airlangga, Syailendra C: Setiabudi Apartment, Golf Pondok Indah, Somerset Grand Citra, Ascott, Menteng Executive D: Aston Rasuna, batavia, Somerset Berlian, Puri Casablanca, Casablanca E: Taman Rasuna, Palm Court Apartment, Puri Imperium
P. 32
jakarta | 4Q 2012 | RETAIL
Retail Sector
Supply
JAKARTA
Two retail centres officially opened and two others stopped operating are two contradicting situations for supply in the Jakarta retail market during 2012. Kota Kasablanka and Lippo Mall Kemang are retail centres that began operations in 3Q 2012. Despite being far apart, these two retail centres are both in South Jakarta. Jatinegara Trade Centre and Tendean Plaza are two retail centres which officially stopped operations during 2012. Tendean Plaza will be knocked down and replaced with a new
JAKARTA RETAIl SuPPly
5,000,000 4,000,000 sq m 3,000,000 2,000,000 1,000,000 0 2000 2002 2004 2006 2011 2014F 2008 2001 2005 2009 2003 2007 2010 2012 2013F 2015F
apartment development. With no additional retail centres operating in 4Q 2012, the annual supply in 2012 should be 164,981 sq m. However, due to a reduction of 49,995 sq m from the closure of the abovementioned shopping centre, the cumulative supply of retail space in Jakarta is registered at 4.15 million sq m at the end of 2012.
Existing Supply
Annual Supply
The two new malls operating in 2012 are categorised as big malls and therefore the total new supply in 2012 is higher than in 2011. Despite having five new shopping centres, the total annual supply in 2011 was only 81,663 sq m since the shopping centres opening in 2011 were relatively small. Kota Kasablanka is a retail centre in Jakarta which has leasable area of more than 100,000 sq m in addition to Mall of Indonesia, Grand Indonesia and Central Park Mall.
Looking at the retail composition in Jakarta, middle-class retail centres still dominate with a 43.6% market share, followed by middle- to low-class with 27.8%. Meanwhile, the middleto upper-class retail centres composed 29.5% of the total supply. Middle- to upper-class shopping centres are largely found in South Jakarta with total space of 599,218 sq m followed Central and West Jakarta with 309,481 sq m and 217,937 sq m, respectively.
JAKARTA RETAIl SuPPly COMPOSITION BASEd ON gRAdE

Middle Low 27% Middle Upper 29%
Middle 44%
P. 33
Shopping centres of the middle-class category are also found mostly in South Jakarta (28%) and North Jakarta (27%) supplying around 1.8 million sq m of retail space. Shopping centres categorised as middle- to low-class are largely found in the area between North and Central Jakarta (composing 65% of the total 1.12 million sq m middle- to low-class retail space) where most of the shopping centres are old and less
maintained. Based on region, most of retail spaces area concentrated in North and South Jakarta. The North Jakarta area has 922,210 sq m of retail space while South Jakarta was the second largest area with 861,423 sq m. The CBD as the centre of commercial activities has only 743,932 sq m.
JAKARTA RETAIl SuPPly BASEd ON SuB MARKETS

1,000,000 900,000 800,000 sq m 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 CBD Central Jakarta South Jakarta North Jakarta East Jakarta West Jakarta
JAKARTA RETAIl ANNuAl SuPPly

600,000 500,000 sq m 400,000 300,000 200,000 100,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
At least six new retail centres are anticipated to open in 2013. Three mall areas pursuing their completion include Cipinang Indah, Pondok Indah Street and Lotte Shopping Avenue; together with The Baywalk and Pulomas they will contribute to the future supply in 2013. In
West Jakarta, St Moritz, a mall which is part of a huge mixed-use development, will contribute at least 120,000 sq m of new supply to the Jakarta retail market. In total, all of these shopping centres will deliver 313,500 sq m of new retail space in Jakarta.
P. 34
LIST OF FuTuRE SHOPPINg CENTRES IN JAKARTA
SHOPPINg CENTRES NAME 2013 Lotte Shopping Avenue Pondok Indah Mall Street Gallery Cipinang Indah Mall Puliomas XVenture The Baywalk @Green Bay Pluit St. Moritz 2014 Sentra Timur Walk 2015 Podomoro City Expansion Shopping Mall at Pancoran PIK Mall Satrio
lOCATION
REgION
NlA (Sq M)
STATuS
CBD South Jakarta East Jakarta East Jakarta North Jakarta West Jakarta
78,000 Under Construction 9,100 20,000 25,200 52,000 129,200 Under Construction Under Construction Under Construction Under Construction Under Construction
Pondok Indah Cipinang Pulomas Pluit Puri Indah
Sentra Timur
East Jakarta
19,000
Under Planning
S. Parman Pancoran Pantai Indah Kapuk
West Jakarta South Jakarta North Jakarta
40,000 15,000 30,000
Under Planning Under Planning Under Planning

BIg dEvElOPERS FOR RETAIl CENTRES IN JAKARTA
Agung Podomoro 10% Others 69% Duta Pertiwi 8% Lippo 7% Pakuwon 2% Summarecon Djarum 2% 2%
At least six new retail centres are anticipated to open in 2013. Three mall areas pursuing their completion include Cipinang Indah, Pondok Indah Street and Lotte Shopping Avenue; together with The Baywalk and Pulomas they will contribute to the future supply in 2013. In
West Jakarta, St Moritz, a mall which is part of a huge mixed-use development, will contribute at least 120,000 sq m of new supply to the Jakarta retail market. In total, all of these shopping centres will deliver 313,500 sq m of new retail space in Jakarta.
P. 35
BOdETABEK
In the greater Jakarta area, three new retail centres opened during 2012. The openings started with Cimanggis Square in Depok in early 2012, followed by Mall Balekota in Tangerang. At the end of 2012, Shopping Mall at Alam Sutera became the latest mall. On the
BOdETABEK RETAIl SuPPly
2,500,000 2,000,000 sq m 1,500,000 1,000,000 500,000 0 2000 2002 2004 2011 2014F 2006 2008 2001 2005 2009 2003 2007 2010 2012 2013F 2015F
contrary, Citra Grand Mall in Bekasi closed for expansion and renovation. All in all, total new retail space during 2012 was 108,000 sq m, bringing the total supply in the greater Jakarta to 1.83 million sq m as of 4Q 2012.
Existing Supply
Annual Supply
Based on regional distribution, Tangerang continues to have the most retail space because five of seven retail centres that began operations from 2011 to 2012 brought an additional supply of 253,000 sq m in Tangerang.
BOdETABEK RETAIl SuPPly BASEd ON REgION
800,000 700,000 600,000 sq m 500,000 400,000 300,000 200,000 100,000 0 Depok
In 2013, Bekasi will see the most retail space since four of five shopping centres will be located in Bekasi, while one retail project will be located in Depok.
Bogor
Tangerang
Bekasi
P. 36
BOdETABEK RETAIl ANNuAl SuPPly

600,000 500,000 sq m 400,000 300,000 200,000 100,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
LIST OF FuTuRE SHOPPINg CENTRES IN BOdETABEK
SHOPPINg CENTRES NAME 2013 Grand Galaxy Mall Bekasi Junction Grand Metropolitan Mall Mall Ciputra Citra Gran Plaza Cibubur extension 2014 Bintaro Xchange Lippo Cikarang Citywalk (phase 2) Summarecon Bekasi Cinere Bellevue Suite The Breeze Sinar Mas Land Cibinong City Mall 2015 Bekasi Trade Center 2 Mal Harapan Indah Bekasi Bekasi Bintaro Cikarang Bekasi Cinere Serpong Cibinong Bekasi Bekasi
lOCATION
REgION
NlA (Sq M)
STATuS
Bekasi Bekasi Bekasi Bekasi Depok
23,000 Under Construction 42,000 Under Construction 47,285 Under Construction 26,000 Under Construction 2,000 Under Construction
Kalimalang Cibubur Cibubur
Tangerang Bekasi Bekasi Depok Tangerang Bogor
45,000 Under Construction 10,000 Under Planning 35,000 Under Construction 28,000 Under Construction 24,300 Under Construction 40,000 Under Construction
Bekasi Bekasi
30,000 44,420
Under Planning Under Planning

P. 37
Demand
JAKARTA
Compared to the previous quarter, the occupancy rates only rose moderately to 88.6% in 4Q 2012, thanks to the middle- to upperclass retail centres which maintain healthy occupancy in Jakarta. Occupancy of middle- to upper-class shopping centres was 94.2%. Like Kuningan City, which has been in operation since 2011, retail centres which opened in 2012 continue to demonstrate an increasing level of physical occupancy. Overall, there is around 20% vacant space including the space which has been reserved but not opened yet. Food and beverage retailers remain as active retailers looking for space. One notable leasing transaction was seen in a mall in the Senayan area. Also, one international fast food restaurant opened in Plaza Festival and Plaza Atrium. Other than active retailers like F&B and fashion, are retailers associated with hobby products such as bicycles, air softguns and video games. Other retailers, including computer and telecommunication gadgets, were also active during the reviewed quarter as seen in two malls located in Blok M and the Lebak Bulus area.
PRE-COMMITMENT lEvEl IN JAKARTA RETAIl
2012 2013F 2014F 2015F 20,000 40,000 60,000 80,000 120,000 140,000 160,000 180,000 0 200,000 220,000 240,000 sq m
Absorbed
100,000
Supply
LIST OF NEW SIgNIFICANT TENANTS IN ExISTINg SHOPPINg CENTERS
RETAIlERS Toys Kingdom Informa Bike Center H&M
KINd OF BuSINESS Entertainment Home Furnishing Hobbies Fashion and Accesories
SIZE (Sq M)
SHOPPINg CENTRES NAME
REgION South Jakarta West Jakarta South Jakarta CBD 2012 2012 2012 2014
WHEN
500 Pasaraya Grande 2,000 Central Park 2,500 Pasaraya Grande 3,900 Grand Indonesia
lIST OF COMMITTEd TENANTS IN THE NEW ANd FuTuRE RETAIl CENTRES IN JAKARTA
SHOPPINg CENTRES NAME Kuningan City Kota Kasablanka
lOCATION Satrio Casablanca
yEAR OF COMPlETION 2011 2012
COMMITTEd MAJOR TENANTS Lotte Mart, Gramedia, Best Denki, Cinema XXI, Electronic Superstore, Flame Karaoke, Lollipop Playland, Amazing Zone, Ace Hardware, Jatomo Fitness, Metrox Sogo Department Store, Ace Hardware, Cinema XXI, Electronic Solution, Kem Chick, Carrefour, Informa, Toys Kingdom, Muji Store, Marks & Spencer, Family Karaoke continued
P. 38
SHOPPINg CENTRES NAME
lOCATION
yEAR OF COMPlETION 2012 2013 2013 2013 2013
COMMITTEd MAJOR TENANTS continuation
Lippo Mall Lotte Shopping Avenue St. Moritz Cipinang Indah Mall The Baywalk@ Green Bay Pluit
Kemang Satrio Puri Indah Cipinang Pluit
Debenhams, Zara, Next Boutique, Marks & Spencer, Hypermart, Ace Hardware, Fitness First Platinum, Cinema XXI, Chipmunks Playland and Cafe, Best Denki Lotte Department Store, Ranch Market, Golds Gym, Cinema XXI, Hero Supermarket Debenhams, Matahari, Hypermart, Electronic City, Cinema XXI, Ranch Market, Sea World Indonesia, Parkson Carrefour Ace Hardware, Cinema XXI, Farmers Market, Electronic Solution, Informa, Time Zone, Toys Kingdom, Home Solution, Golds Gym
BOdETABEK
The occupancy rate in greater Jakarta is 84.8% this quarter, modest growth compared to the YoY figure; however, this number is lower QoQ as the occupancy rate recorded last quarter was 86.3%. Two factors influenced the occupancy performance including some existing shopping centres with more vacant space and
OCCuPANCy RATES BASEd ON REgION
100% 80% 60% 40% 20% 0% 2006 2007 Bogor 2008 Depok 2009 2010 2011 Bekasi
committed tenants which have not started opening their stores. Throughout 2012, some new malls have secured high pre-commitment rates. However, like the case of the two malls in Tangerang, despite having secured a number of tenants, the physical occupancy only reached 50%.
2012
Tangerang
PRE-COMMITMENT lEvEl IN BOdETABEK RETAIl
2012 2013F 2014F 2015F 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 0 200,000 sq m
Absorbed
Supply
P. 39
lIST OF COMMITTEd TENANTS IN THE NEW ANd FuTuRE RETAIl CENTRES IN BODETABEK
SHOPPINg CENTRES NAME Living World Alam Sutera Summarecon Mall Serpong 2 Shopping Mall @Alam Sutera Mall Balekota Grand Metropolitan Mall Ciputra CitraGran Grand Galaxy Bintaro Xchange Bekasi Junction Cibinong City Center The Breeze
lOCATION Alam Sutera Serpong Alam Sutera Tangerang Kalimalang Cibubur Bekasi Bintaro Bekasi Cibinong Serpong
yEAR OF COMPlETION Hero Supermarket 2011 2012 2012 2013 2013 2013 2014 2013 2014 2014
COMMITTEd MAJOR TENANTS
2011 Informa, Ace Hardware, Toys Kingdom, Cinema XXI, Gramedia, Electronic Solution, Eat and Eat, Centro Department Store, Best Denki, Do It Best Pongs Home Center Sogo Department Store, The Food Hall, Funworld, Gramedia, Cinema XXI, Chipmunks Playland & Cafe, Electronic Solution, Home Solution, Giant Hypermart, Electronic Solution, Ace Hardware, Gramedia, Informa, XXI, Matahari, Toys Kingdom, Amazone Centro, Farmers Market, Toys Kingdom, Funworld Matahari, Hypermart, Gramedia, Farmers Market Blitz Megaplex, Farmers Market Farmers Market, Best Denki, RockStar Gym, Frigo Ice Skating Lotte Mart, 21 Cineplex Carrefour, Funworld Golds Gym
Rental Rates and Service Charge

RENTAl RATES
Basically, there was no principal adjustment made by shopping centres during the quarter, however the upward trend occurring during the quarter was mainly due to the termination of the two shopping centres mentioned in the supply section above (with rental rates below the average market) and the influx of two new shopping centres (with high rental rates). In
RENTAl RATES IN JAKARTA
IDR 800,000 IDR 700,000 IDR 600,000 IDR 500,000 IDR 400,000 IDR 300,000 IDR 200,000 IDR 100,000 IDR 0 2005 2006 2007 Middle 2008 2009 Middle Low 2010 2011 average
this quarter, average asking rental rates for typical and available retail space in Jakarta was IDR461,394/sq m/month, suggesting a 2.5% increase compared to the previous quarter. This number significantly increased by 18.5% YoY, largely fueled by the rent increase at middle- to upper-class shopping centres.
2012
Middle Up
P. 40
In the greater Jakarta area, which includes Bogor, Depok, Tangerang and Bekasi (BoDeTaBek), average asking rental rates moved up a bit by 4% during the quarter to IDR261,975/sq m/month. On average, rental
tariffs in the Tangerang area were IDR317,896/ sq m/month, higher than all other regions. Average rental rates in other areas like Depok, Bogor and Bekasi were between IDR220,000 and 260,000/sq m/month.
SERvICE CHARgE
Nothing changed much in the service charges during the quarter, with operational costs in Jakarta at IDR81,607/sq m/month at the end of 2012. This figure reflects a moderate change of 7% over the year owing to the operation of the new shopping centres opened in 2012. These two shopping centres charge in the range of IDR90,000 to 100,000/sq m/month. In the greater Jakarta area, service charges stabilised at IDR62,073/sq m/month during the quarter. The average service charge in Tangerang was the highest compared to other areas, i.e IDR66,309/sq m/month, followed by Bekasi with IDR59,393/sq m/month. Maintenance costs in Depok and Bogor were IDR56,260 and 51,273/sq m/month, respectively.
Outlook
The new governor of Jakarta will likely continue with the shopping centre moratorium issued by his predecessor. Thus far, our supply projections for the next three years have not changed; only upcoming projects with development permits granted before the moratorium was issued will be built. The limited supply in the future will give an advantage to shopping centre owners as retail space in the future will not be easy to find. With many local and overseas retailers eyeing this growing market, supported by an increasing middle market segment, landlords will have the luxury of adjusting rental tariffs as well as changing and remixing their tenant compositions. Such measures have been taken during the year by several shopping centres in order to improve their performances. This limited retail supply give opportunity for, combined with retailers expansion, will create a landlord market condition over the next couple of years. Such a situation will shopping centres outside of Jakarta to perform better, particularly in the cities having potential markets. Even now, some big retailers find it difficult to find retail locations in the growing cities outside of Java. In the meantime, the landlord market situation will trigger an increase in rental rates. Furthermore, the overall occupancy cost will increase because shopping centres are now preparing for a service charge increase due to the hike in the electricity tariff.
P. 41
jakarta | 4Q 2012 | INDUSTRIAL ESTATE
Industrial Estate Sector
Supply
This quarter saw the opening of 20 hectares of land in Delta Silicon in the Bekasi region as part of their expansion plan. We have revised our supply information during 2Q since the land will only ready by the middle of 2013. Except Delta Silicon, the overall greater Jakarta industrial market did not see any new industrial land. Thus, the total serviceable industrial land in the six regions (Serang, Tangerang, Jakarta, Bekasi, Karawang and Bogor) became 8,686.3 ha. The major issues in the industrial supply during 2012 are strong demand for industrial land and the limited stock of land on offer. This land issue has been a paramount problem since 2011 when significant absorption of industrial land started to occur. During the quarter, a similar situation was reported in which buyers looking for industrial land have to search around several estates and most frequently cannot decide because land is not available. This situation has put industrial landlords into a better bargaining position in offering adjusted prices and choosing the tenants they want. In some cases, some developers, particularly in the Bekasi or Karawang regions, are able to sell raw land at the price of ready-to-use land (even though the land is not ready for sale). This will be beneficial for both parties when landlords will receive some of the cash in advance while buyers get the current price in anticipation of further increases when land is in a ready-touse condition. The limited land situation should be perceived as an opportunity for providing more land amid mounting inquiries. Several industrial estates are speeding up their expansion plans to be able to deliver land on schedule in 2013. For example, two prominent industrial estates in Bekasi are preparing land for their land bank in 2013. One estate is rushing the progress to develop a gross area of 150 ha, while the other is focusing on delivering a gross area of 50 ha by the end of 2013. Thus, in total, from these two industrial estates alone, it is anticipated that there will be around 140 ha of saleable industrial land (from 200 ha gross). Further west but still in the Bekasi region, one industrial estate is rushing to deliver land because they sold a significant amount of land in 2012 and are obliged to make it ready in 2013. In Karawang, two industrial estates have committed to delivering land that they have transacted during 2012. We estimate that there will be around 90 ha of saleable industrial land provided by these two estates in 2013. Other existing industrial estates are also planning to develop their raw land. For example, one parcel of industrial land in Karawang is planning to develop their land bank of around 386 ha in 2013 and 2014 period (in staging). Potential supply will also come from a new industrial estate in Karawang area but planning cannot be confirmed. One new industrial estate indicates that it will open a total of 662 ha of land and another is planning to develop a total of 342 ha but so far there is no further confirmation of this plan. One big industrial developer in Bekasi that holds and controls big parcels of land in Cilegon and Kendal, Semarang (out of this market report coverage) is planning to open industrial land in those areas. In conclusion, available and ready-to-build land may be limited this year but the industrial market holds a big parcel of land to be developed as an industrial location.
dISTRIBuTION OF INduSTRIAl lANd IN SIX REgIONS
Serang 21%
Jakarta 10%
Bogor 2% Bekasi 26%
Karawang 36%
Tangerang 5%
P. 42
Demand
Total industrial land being transacted during 2012 reached 636.4 ha or only 51% of the total transactions recorded in 2011. The main reason is not because of demand reduction because demand remains strong. Limited land stock availability is the major issue which will lessen total sales during all of 2012. Limited stock also changes the overall composition of land being transacted where 238.2 ha or 37% of total sales in 2012 are pre-commitment sales or sales done this year but to be delivered sometime in 2013. According to our records, such transactions were completed in two industrial estates in Karawang and three in different locations in Bekasi. In the last quarter of 2012, the biggest transaction occurred in the Serang area, with both industrial estates recording significant land transactions of 65.28 ha. The Bekasi region, which recorded the highest amount of land sales last quarter, is in second position with a total of 60.4 ha. Meanwhile, despite being lower than the two regions, total sales in Karawang in this quarter were higher QoQ, i.e. 19.5 ha. With no update in sales for the other regions, total land being transacted during 4Q 2012 in the greater Jakarta area is 145.12 ha higher than the figure in 3Q 2012. During 2012, Kota Bukit Indah, operated by Indotaisei, ranks first in terms of amount of land being sold. The latest transaction to Astra Honda Motor of around 84 ha made up all of the sales for this estate, even though the land will only be ready by March 2013. Suryacipta is ranked number two, selling around 90.6 ha during 2012 with the most transactions occurring in the first semester of 2012.
ANNuAl INduSTRIAl lANd SAlES

1400 1200 1000 hectares 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
lANd ABSORPTION duRINg 4Q 2012

The largest land transaction during the quarter was recorded in Krakatau Industrial Estate Cilegon (KIEC). The countrys largest steel maker, PT. Krakatau Steel set up a new factory with Nippon Steel and Sumitomo Metal Corporation to produce what is called coldrolled-coil. This transaction was officially announced at the end of December, involving a land acquisition of around 40 ha. Apart from that, another 5 ha were sold to local steel related companies, bringing total sales during the quarter to 45 ha. Still in Serang, Modern Cikande confirmed their sales to three buyers, including to a building materials company of around 14.7 ha, to the chemical industry of 5 ha and smaller parcel of half a hectare to the fabrication industry, totalling around 20.3 ha.
P. 43
The total land being transacted in Bekasi was registered at 60.4 ha with all operating industrial estates contributing to the sales. Greenland at Kota Deltamas reported a total sales of 24 ha in five transactions mostly done by the automotive industry and a small portion by a logistics company. This transaction is recorded as precommitment sales because the land will only be ready from March to September 2013. Greenland has been consistently recording around 20 ha every quarter, and most transactions during 2012 were concluded by the automotive industry. Other significant precommitment sales were also monitored in Bekasi Fajar where 16 ha of land were released to an automotive company and 2 ha were absorbed by the food industry. During the year, Bekasi Fajar has successfully sold around 61 ha, mostly to the automotive industry. All 61 ha of land being sold will also be delivered in 2013. Likewise, the MM2100 which is located side by side with Bekasi Fajar, recorded pre-committed sales during 4Q 2012 by existing tenants of around 7 ha. And in Jababeka, a total of less than one hectare was actually from seven companies (chemicals, warehouses, automotive, manufacturers, trading and machinery). Delta Silicon witnessed three transactions totalling 11
ha comprising 4 ha by the beverages industry, 6 ha by a warehouse company and 1 ha by a company for workshop purposes. In Karawang, all industrial estates only sold less than 7 ha in total during the quarter. Suryacipta sold the most in this region. A total of 6.4 ha was sold to two automotive companies (5.3 ha) with the remainder sold to the casting industry. Thus far, this quarters transactions were the lowest but overall, Suryacipta was recorded as one of the industrial estates selling the most land for the full year of 2012. After recording the biggest transaction during 2012, Kota Bukit Indah Indotaisei had no transactions recorded this quarter. Their counterpart, Kota Bukit Indah, operated by Besland Pertiwi, sold around 5.2 ha to their existing tenants (they only sell land to their loyal existing tenants because they typically offer land for lease). Again this transaction is pre-committed sales because the land sold is still under construction. Leasing activity in Kota Bukit Indah (Besland Pertiwi) was concluded by an automotive company which leased land and buildings of 600 sq m. Meanwhile, two transactions were completed by automotive parts and construction machinery industries, totalling 7.2 ha in KIIC.
lANd SAlES RECORdEd duRINg 2012 IN EACH INduSTRIAl ESTATE

Kota Bukit Indah (Indotaisei) Delta Silicon Suryacipta Greenland (Kota Delta Mas) Krakatau Industrial Estate Cilegon Bekasi Fajar Modern Cikande KIIC Jababeka KI Mitrakarawang MM2100 Industrial Town Kota Bukit Indah 0 10 20 30 40 50 60 70 80 90 100
hectares
P. 44
CuMulATIvE SuPPly, dEMANd ANd TAKE-uP RATES

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Supply (ha) Cumulative Demand (ha) Take-up Rate (%)
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
With more than 55% of the overall sales during 2012, automotive and related industries remained the key drivers for industrial land sales. Up to 4Q 2012, transactions concluded by automotive industries accounted for a total of almost 360 ha. The majority of land transactions by automotive and related
TyPES OF ACTIvE INduSTRIES IN 2012
industries occurred in either the Bekasi or the Karawang area. Other active industries during 2012 were steel-related industries in the Serang area, followed by logistics, F&B, building materials, SFB developers, oil and gas, consumer goods, and manufacturing industries.
Pharmaceutical 0.7% Plastics 0.9%
Chemicals Electronics 1.0% 0.1% Steel-Related 9.5%
Manufacturing 2.6%
Packaging 0.1%
Oil & Gas 3.5%
Logistics/ Warehouse 4.8%
Metal Machinery 0.6% Textiles 0.3% 1.4% Building Material 4.9% Developer Others 4.4% 3.9%
Consumer Goods Food & 2.3% Beverage 4.2%
Automotive 54.8%
Industrial Land Prices

Having experienced land scarcity coupled with continued inquiries for industrial land, average land prices in the greater Jakarta area rocketed by an average 27% YoY (December 2011 December 2012). By region, Karawang recorded the highest jump of 44% YoY while Bekasi registered a 37% increase YoY and Serang, 38%. Albeit lower, an increase in price was also monitored in Bogor where prices were up by 18% YoY. The determinant factors (supply and demand performance) have led industrial land prices to keep moving upward.
P. 45
During the quarter, three industrial estates in Karawang introduced new prices. Over the quarter, prices climbed by 17% which was the highest increase for a region during 4Q 2012. In Bekasi, prices edged up by 10% QoQ as a result of new prices introduced by five industrial estates in this region. Still in Bekasi, we witnessed one industrial estate introducing a significant jump in industrial land prices during the reviewed quarter, achieving IDR3 million / sq m (equivalent to US$312 / sq m). And in the Serang area, one industrial estate, with limited land to offer, introduced new prices which caused the average price for this region to move up by 7%.
gREATER JAKARTA INduSTRIAl lANd PRICES
$240 $210 $180
US $/sq m
Industrial tenants were generally astonished with the increasing prices but their expansion plans cannot wait amid the competitive market. In particular, for highly invested industries where a land component only takes a small part of the overall investment cost, this condition would not be a great concern. We anticipate that the continued increase in land prices will still take place in 2013. At least one industrial estate in Bekasi has indicated a price rise of 20% in 2013. Another industrial estate in Bekasi also signalled a price increase in 2013 although less than the increase in 2012.
$150 $120 $90 $60 $30 $0 2006 Bogor 2007 2008 Tangerang 2009 Karawang 2010 Bekasi 2011 Serang 2012
INduSTRIAl MAINTENANCE COST
No industrial estates have reported an increase in service charges during the reviewed quarter. Overall, service charges are fairly flat in all regions. Service charges will potentially
increase in 2013 given the plans to increase electricity tariffs and fuel prices which will affect operational costs.
gREATER JAKARTA INduSTRIAl MAINTENANCE COST

$0.10 $0.08
US $/sq m/month
$0.06 $0.04 $0.02 $0.00 2006 Bogor 2007 2008 2009 Karawang 2010 Bekasi 2011 Serang 2012
Tangerang
P. 46
INDUSTRIAL LAND PRICES AND MAINTENANCE COSTS*
Region Lowest Bogor Tangerang Karawang Bekasi Serang

*1US$ = Rp 9,600
Land Price (sq m) Highest US$ 156.30 US$ 156.30 US$ 190.00 US$ 312.50 US$ 125.00 Average US$ 128.10 US$ 115.00 US$ 155.80 US$ 206.20 US$ 114.60
Maintenance Costs (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 US$ 0.03 Highest US$ 0.08 US$ 0.11 US$ 0.06 US$ 0.07 US$ 0.05 Average US$ 0.07 US$ 0.06 US$ 0.06 US$ 0.06 US$ 0.04
512 offices in 61 countries on 6 continents

United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
$1.5 979
US$ 100.00 US$ 83.3 US$ 150.00 US$ 156.30 US$ 104.20
billion in annual revenue billion square feet under management 12,500 professionals
Over
Outlook
Notwithstanding the surge in land prices, greater Jakarta locations are irreplaceable. The number of industries relocating from this location to other areas like Semarang (Central Java province) or Surabaya (East Java province) is negligible. When the issue like whether there will be relocations to other area outside greater Jakarta arises, only a very few companies will, amid the fear of increasing land cost. In particular for the existing operating industries, when they expand, moving to the surrounding locations is the most feasible option. One of the considerations is whether the upstreamdownstream process has been established in the surroundings. For example, an automotive related industry would be comfortably located in the area where they can see the vendor, the logistics, the raw material and other supporting industries. If they are an auto parts industry, their best location is within the catchment of their anchor industry. Besides, as the region (greater Jakarta) is highly populated with auto-related industries, moving to another location would not be an option because for a highly invested industry like automotive, the change in land price would not entirely affect the whole investment plan. In short, the greater Jakarta market has transformed into an established place for some industries given its good infrastructure and its huge market share. The population in the Jakarta metropolitan area (including sister cities in the surroundings) has reached 28 million which is a tempting market for any industry. In fact, even though land prices have been moving upward for the last three years, the absorption keep proliferating. With the expectation that the momentum of economic progress will be maintained in 2013, industrial land sales next year should be robust because the combination of the influx of new industrial land will be well counterbalanced by continued inquiries from growing companies. Automotive and related industries will continue to dominate the transactions. Now, with the fear of land shortages, several industrial estates are thinking about earning recurring income from the leasing market. Some estates have started allocating the remaining land to create a commercial compound where they are building SFBs for rent. This will help maintain periodic income (not only from selling water, etc.) when the land sales activity slows down.
COLLIERS INTERNATIONAL INDONESIA: World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia
TEl 62 21 521 1400 FAX 62 21 521 1411
Michael Broomell Managing Director World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia TEl 62 21 521 1400 ext 131 FAX 62 21 521 1411 Ferry Salanto Associate Director, Research World Trade Centre 10th & 14th floor Jalan Jenderal Sudirman Kav. 29 - 31 Jakarta 12920 Indonesia
TEl 62 21 521 1400 ext 134 FAX 62 21 521 1411
Email: Ferry.Salanto@colliers.com
Copyright 2012 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee 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.
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Jakarta Market Report 4 Q 2012

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Jakarta Market Report 4 Q 2012

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Property Sector Overview

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INduSTRIAl ESTATE SECTOR

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East Jakarta 5.10%

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North Jakarta 20.89%