Apartment Sector - Colliers International

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Colliers Quarterly 31102016

JAKARTA | APARTMENT

Apartment Sector Ferry Salanto Senior Associate Director | Research Positive sentiment over the outlook of Indonesia was highlighted by the stability in the exchange rate and improving macroeconomic environment, which could contribute to the modest increase in the average take-up rate. In addition, a limited number of newly launched projects also pushed the takeup rate upward, whilst at the same time, developers focus on selling the remaining stock. The asking price still showed a positive trend, following the improvement in the sales rate, as well as the resumption of projects that remain under construction. Furthermore, the government continues to issue favourable policy initiatives and programmes in an attempt to brisk property market up, such as loan-to-value (LTV) relaxation, tax amnesty programme and lowering PPh final (income tax) on the transfer of lands and buildings. However, we believe it would take some time for this to happen and translated into a significant and sustainable increase in the apartment demand.

Accelerating success.

Forecast at a glance Supply

The strata-title apartment stock increased by 3,317 units to a total of 171,014 units as of Q3 2016. In the remainder of 2016, we expect a total of 7,117 units to be handed over, which would bring the 2016 annual supply to 21,224 units lower than what was initially projected.

Demand

With the economic outlook likely to grow moderately this year, we expect the apartment market to remain steady in the coming quarter, although recent policies rolled out by the government have brightened the long-term outlook. Furthermore, we expect the average take-up rate to be at 86%-87% level at the end of 2016.

Rent

Asking rental rate of apartments for lease will remain stable throughout this year. Furthermore, most apartments, particularly serviced apartments, anticipate an increase in rent next year, in an adjustment to increase utility costs and inflation.

Price

Sluggish demand and head-to-head market competition left no room for prices to go up further. In 2016, developers chose to maintain their price to attract potential buyers. As such, we expect apartment price to grow slightly above inflation rate at 4% to 5% YoY for the entire 2016.

APARTMENT FOR STRATA-TITLE Supply The completion of six projects, contributing additional 3,317 units in Q3 2016, increased the total stock of strata-title apartments in Jakarta to 171,014 units, up by 2% QoQ or 12.2% YoY. All of the newly completed projects were extensions of existing projects. Of the abovementioned six projects, three are categorised as low segment projects, including The Green Pramuka

(Scarlet Tower), Sentra Timur Residence (Tosca Tower) and Teluk Intan (Saphire Tower). Meanwhile, the Bassura City (Cattleya Tower) and Woodland Park (Mahogany Tower) projects are classified as middle-lower segment projects. La Venue (North Tower), located in Pasar Minggu, South Jakarta, was the only middle-upper apartment project to be completed this quarter. Overall, until Q3 2016, as many as 14,107 units or 53.1% of the total projected 26,583 units will be completed and handed over this year. In the remainder of 2016, we expect a total of 7,117 units to be handed over, which would bring the 2016 annual supply to 21,224 units lower than what was initially projected.

List of Completed Apartment Projects During Q3 2016 Name of development

location

region

developer

units

The Green Pramuka (Tower Scarlet)

Jl. Jenderal Ahmad Yani

Central Jakarta

PT Duta Paramindo

1,000

Bassura City (Tower Cattleya)

Jl. Basuki Rahmat

East Jakarta

Synthesis Development

Sentra Timur Residence (Tower Tosca)

Pulo Gebang

East Jakarta

J.O. Perumnas and Bakrie Land

146

La Venue (North Tower)

Jl. Pasar Minggu

South Jakarta

PT Bintang Rajawali (Sinar Mas Group)

253

Woodland Park (Mahogany Tower)

Jl. Pahlawan Kalibata

South Jakarta

PT. Pardika Wisthi Sarana

Teluk Intan Apartment (Sapphire Tower)

Jl. Teluk Gong

North Jakarta

PT Trika Bumi Pertiwi

600

218 1,100 Total

3,317

Source: Colliers International Indonesia - Research

As of Q3 2016, a total of 1,799 apartment units from three projects were introduced, revealing a decrease of 25% in term of the number of projects compared to the previous quarter. South and West Jakarta continue to contribute more apartment supply over the next three years. South Jakarta will see middle-class projects from Permata Hijau Suites, consisting of 649 units from two towers, providing one-bedroom to three-bedroom types of unit, ranging from 40.9 sq m to 91.7 sq m in size. Although the site is not located in the main road and is relatively remote from Permata Hijau, the property is generating so much interest, most probably due to its price, location (within the South Jakarta area) and the fact that only a small number of units sit on this two-hectare land. In the pre-launching period, they claimed that 100 units had already been absorbed, most of the buyers of which are from their board of directors’ families.

Foreign developers from Japan and Singapore have extensively invested in real estate projects in Jakarta. Nowadays, foreign developers from China are quite bold in expanding to the country. A Chinese developer is planning to construct the first mixed-use project development in West Jakarta, named Daan Mogot City, consisting of residential, retail and commercial developments. The residential development will be quite massive, consisting of 30 apartment towers. The first stage starts with eight towers. The construction of the first three towers will start in the second half of 2016, whilst the remaining five towers will start construction in the following year. A middle-lower class apartment will offer studio to two-bedroom units, ranging from 21.9 sq m to 45.0 sq m. It is expected to be completed in the next three years. From the CBD area, Ciputra introduced the extension of Ciputra World 2, named The Newton, which consists of studio units, two-bedroom apartment units and others. Approximately 53% of the units are 25-sq m studio-type units, and will likely be offered at IDR1 billion.

Newly Introduced Projects During Q3 2016 Name of development Permata Hijau Suites (2 towers)

LOCATION Jl. Raya Kebayoran Lama No.55

region

Expected completion time

estimated price (idr/sq m)*

total Units

South Jakarta

Q4 2019

IDR 21 million

649

Daan Mogot City Apartment (phase I) Daan Mogot (3 towers)

West Jakarta

Q4 2019

IDR 15 - 18 million

700

The Newton at Ciputra World 2

CBD

2020

IDR 40 - 44 million

450

Jl. Karet Sawah

*) Price based on hard cash excludes VAT 10% Source: Colliers International Indonesia - Research

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Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Furthermore, with the addition of these three newly introduced projects, there are currently 77,128 units of future supply that are being offered to the market. West Jakarta and South Jakarta are still the most preferred areas to develop strata-title apartments, due to their interconnectedness to the Jakarta Outer Ring Road, which has increased accessibility to the area as well as the proximity to Soekarno-Hatta International Airport. On the other hand, South Jakarta is still attractive as apartment location due to its comprehensive facilities, good infrastructure and proximity to the business centre. The recent Government Regulation Number 34, 2016 seeks to boost the property sector by lowering the final income tax (PPh final) on the transfer tax on lands/buildings from 5% to 2.5%, which officially became effective in September. Developers will pay lower taxes, providing them a better margin and thus making properties more attractive. However, although tax is reduced, apartment price does not automatically follow.

Under-Construction Apartment Based on Area CBD 6%

Central Jakarta 12%

West Jakarta 28%

South Jakarta 23% East Jakarta 19%

North Jakarta 12%

Source: Colliers International Indonesia - Research

New Pipeline Apartment name

location

region

developer

#units

Status

2016 The Green Pramuka (Tower Orchid)

 Jl. Jenderal Ahmad Yani

Central Jakarta

PT Duta Paramindo

         1,000 Built

The Green Pramuka (Tower Penelope)

 Jl. Jenderal Ahmad Yani

Central Jakarta

PT Duta Paramindo

         1,000 Built

The Royal Springhill (Bouvardia Tower)

 Jl. Spring Hill Residence Kemayoran

Central Jakarta

Springhill Golf Group

            120 Built

The Royal Springhill (Bulgari Tower)

 Jl. Spring Hill Residence Kemayoran

Central Jakarta

Springhill Golf Group

            192 Built

Casablanca East Residence (Tower Dallas)

 Jl. Pahlawan Revolusi

East Jakarta

Binakarya Propertindo Group

            408 Built

Casablanca East Residence (Tower Casablanca)

 Jl. Pahlawan Revolusi

East Jakarta

Binakarya Propertindo Group

            719 Built

Bassura City (Tower Edelweiss)

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

         1,000 Built

Bassura City (Tower Dahlia)

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

         1,000 Built

Green Bay Pluit (Sea View)

 Jl. Pluit Karang Ayu

North Jakarta

Agung Podomoro Group

         2,072 Built

Kemang Village (The Bloomington)

 Jl. P Antasari

South Jakarta

Lippo Karawaci

            150 Built

Four Winds

 Jl. Permata Hijau Raya No.1

South Jakarta

PT. Tri Tirta Permata

            140 Built

Metro Park Residence

 Kebon Jeruk

West Jakarta

Agung Podomoro Group

         1,451

Madison Park

 Tanjung Duren

West Jakarta

Agung Podomoro Group

         1,200 Built

19 Avenue Apartment 9 (Tower A)

 Daan Mogot

West Jakarta

Margahayu Land

            338

The Green Pramuka (Tower Scarlet)

 Jl. Jenderal Ahmad Yani

Central Jakarta

PT Duta Paramindo

         1,000 Built

Bassura City (Tower Cattleya)

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

            600 Built

Sentra Timur Residence (Tower Tosca)

 Pulo Gebang

East Jakarta

Bakriland Development

            133 Built

Teluk Intan (Tower Saphire)

 Jl. Teluk Gong

North Jakarta

PT Trika Bumi Pertiwi

         1,100 Built

Built

Built

continued

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Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Apartment name

location

region

developer

#units

Status continuation

La Venue - North Tower

 Jl. Pasar Minggu

South Jakarta

PT Bintang Rajawali (Sinar Mas Group)

            253 Built

Woodland Park (Mahogany Tower)

 Jl. Pahlawan Kalibata

South Jakarta

PT. Pardika Wisthi Sarana

            218 Built

The Grove (Empyreal + Masterpiece)

 Jl. HR Rasuna Said

CBD

Bakriland Development

            438

Under-construction

The Residence (CWJ 2)

 Jl. Prov Dr Satrio Kav 6, Kuningan

CBD

Ciputra

            119

Under-construction

The Orchad Satrio (CWJ 2)

 Jl. Prov Dr Satrio Kav 6, Kuningan

CBD

Ciputra

            349

Under-construction

T - Plaza Residence (Tower A)

 Jl. Penjernihan I Kav.1 Pejompongan

Central Jakarta

PT. Prima Kencana

            321 Under-construction

Elpis Residence

 Gunung Sahari

Central Jakarta

Sioeng Group

            790 Under-construction

The H Residence Kemayoran (Amethyst)

 Jl. Rajawali Selatan

Central Jakarta

Hutama Karya Realtindo

            800 Under-construction

Bassura City (Tower Alamanda)

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

            600 Under-construction

East Park Apartment (Tower C)

 Jl. KRT Radjiman

East Jakarta

PT. Cakra Sarana Persada

            550 Under-construction

Pluit Seaview (Tower Belize)

 Pluit

North Jakarta

Binakarya Propertindo Group

            557 Under-construction

Senopati Suites 2

 Jl. Senopati

South Jakarta

Mahkota Asia Graha

              81 Under-construction

LA City Apartment (Tower A)

 Jl. Raya Lenteng Agung, Jagakarsa

South Jakarta

Pancanaka Samaktha

            980 Under-construction

Nine Residence

 Warung Buncit

South Jakarta

Lippo Karawaci

            246 Under-construction

Senopati Suites 3

 Jl. Senopati

South Jakarta

Mahkota Asia Graha

              54 Under-construction

1 Park Avenue (3 Towers)

 Jl. KHM Syafi'I Hadzami (terusan gandaria)

South Jakarta

Intiland

            279 Under-construction

Izzara Apartment (South and North Tower)

 TB. Simatupang

South Jakarta

Grage Group

            542 Under-construction

Apartment Pejaten Park Residence

 Jl. Warung Buncit Raya No.21

South Jakarta

Bahama Group

            560 Under-construction

Kebayoran Icon

 Jl. Ciledug Raya

South Jakarta

Tamara Land

            256 Under-construction

One Casablanca Residence

 Jl. Pal Batu

South Jakarta

Forza Land

            215 Under-construction

St Moritz (The New Ambassador Suite Tower)

 Jl. Puri Indah Kembangan 

West Jakarta

Lippo Karawaci

            200 Under-construction

St. Moritz (New Presidential Tower)

 Jl. Puri Indah

West Jakarta

Lippo Karawaci

            159

The Nest Apartment

 Jl. Raden Saleh Raya, Meruya Utara

West Jakarta

PT. Karya Cipta Sukses Selaras

         1,100 Under-construction

Green Park View (Tower Gardenia)

 Jl. Daan Mogot

West Jakarta

PT. Inten Cipta Sejati, Cempaka Group

         1,200 Under-construction

Under-construction

Belmont Residence (TowerAthena)

 Jl. Meruya Ilir

West Jakarta

Gapura Prima

            193 Under-construction

Puri Mansion Apartment (Tower Amethyst)

 Jl. Lingkar Luar Barat, Puri Kembangan

West Jakarta

Agung Sedayu Group

            900 Under-construction

Paradise Mansion (2 tower)

 Jl. Paradise Boulevard Selatan

West Jakarta

Palm Group

         1,000 Under-construction

Sudirman Suites

 Jl. Sudirman

CBD

Pikko Group

            380 Under-construction

Domaine

 Jl. Jend. Sudirman Kav 1

CBD

Lyman Group

            186

Verde Two (Tower East)

 Jl. Rasuna Said

CBD

Farpoint Realty

            182 Under-construction

2017 Under-construction

Anandamaya Residences (3 towers)

 Jl. Jend Sudirman

CBD

Hongkong Land

            500 Under-construction

Menteng Park

 Jl. Cikini Raya No.79

Central Jakarta

Agung Sedayu Group

            756 Under-construction

Holland Village

 Cempaka Putih

Central Jakarta

Lippo Karawaci

            400 Under-construction

Royal Suites

 Kemayoran

Central Jakarta

Springhill Golf Group

            450 Under-construction continued

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Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Apartment name

location

region

developer

#units

Status continuation

The Green Pramuka (Tower Nerine)

 Jl. Jenderal Ahmad Yani

Central Jakarta

PT Duta Paramindo

         1,000 Under-construction

Green Signature Apartment

 Jl. MT. Haryono

East Jakarta

KSO Fortuna Indonesia (Pikko)

            800 Under-construction

Podomoro Park

 Jl. I Gusti Ngurah Rai, Klender

East Jakarta

Agung Podomoro Group

Sentra Timur Residence (Tower Brown)

 Pulo Gebang

East Jakarta

Bakriland Development

            605 Under-construction

Bassura City (Tower Jasmine) 2 tower

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

         2,000 Under-construction

Bassura City (Tower Heliconia)

 Jl. Basuki Rahmat

East Jakarta

Synthesis Development

            700 Under-construction

Pluit Seaview (Tower Ibiza)

 Pluit

North Jakarta

Binakarya Propertindo Group

            500 Under-construction

Pluit Seaview (Tower Bahama)

 Pluit

North Jakarta

Binakarya Propertindo Group

            650 Under-construction

Regatta London Tower

 Jl. Pantai Mutiara

North Jakarta

Intiland

            186

Under-construction

Pakubuwono Terrace Grand Tower

 Kebayoran Lama

South Jakarta

PT. Selaras Mitra Sejati

            435

Under-construction

District 8 (Tower Eternity)

 Jl. Senopati

South Jakarta

Agung Sedayu

            400 Under-construction

         3,000 Under-construction

District 8 (Tower Infinity)

 Jl. Senopati

South Jakarta

Agung Sedayu

            280 Under-construction

Lexington Rersidence

 Pondok Pinang

South Jakarta

Cowwel Development

            275 Under-construction

The Aspen Peak at Admiralty (Tower C)

 Jl. Fatmawati

South Jakarta

PT. Harmas Jalasveva

            322 Under-construction

Sapphire Residence

 Lebak Bulus

South Jakarta

PT. Bangun Lintas Shafira

              37 Under-construction

La Terrasse

 Jl. Deplu Raya No.12

South Jakarta

Cowell Development

The Foresque

 Pasar Minggu, Ragunan

South Jakarta

PT Griya Karunia Sejahtera (Binakarya Propertindo Group)

            660 Under-construction

The Langham Residences

 Senopati

South Jakarta

Agung Sedayu Group

              57 Under-construction

Antasari Heights (One Otium Residence)

 Jl. Pangeran Antasari No.8

South Jakarta

PT Radinka Quatro Land

            360 Under-construction

The Batik @ Pejaten

 Jl. Siaga Raya

South Jakarta

Alam Kencana

            137 Under-construction

La Foret Vivante

 Jl. Limo, Permata Hijau

South Jakarta

PT. Mahkota Properti Indo Permata

            253 Under-construction

Selatan 8 (Tower Sultan)

 Kebayoran Lama

South Jakarta

Karya Cipta Group

            336 Under-construction

            111

Under-construction

The Hamilton

 Jl. KHM Syafi'I Hadzami

South Jakarta

Intiland

Puri Mansion Apartment (Tower Amethyst)

 Jl. Lingkar Luar Barat, Puri Kembangan

West Jakarta

Agung Sedayu Group

            112 Under-construction

Puri Orchad (3 Tower)

 Jl Raya Adicipta

West Jakarta

PT Adicipta Graha Kencana (Serenity Group)

         3,000 Under-construction

Maqna Residence

 Jl. Meruya Ilir No. 88

West Jakarta

PT. Graha Meruya

            312 Under-construction

Veranda

 Jl. Pesanggrahan Raya, Kembangan

West Jakarta

PT. Mutirara Puri Indah

            174 Under-construction

Vittoria Residence (3 tower)

 Jl. Daan Mogot

West Jakarta

PT. Duta Indah Kencana

         1,100 Under-construction

Wang Residence

 Jl. Panjang No 18

West Jakarta

PT. Citicon Propertindo

            250 Under-construction

            900 Under-construction

Taman Anggrek Residence (6 towers)

 Tanjung Duren

West Jakarta

Agung Sedayu

19 Avenue Apartment (Tower B)

 Daan Mogot

West Jakarta

Margahayu Land

         3,000 Under-construction             416

Sycamore Suite

 Puri Botanical, Joglo

West Jakarta

Jakarta Setiabudi International

            125 Under-planning

Under-construction

continued

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Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Apartment name

location

region

developer

#units

Status continuation

2018 Gayanti City (2 Towers)

 Jl. Gatot Subroto

CBD

PT Buana Pasifik International

            318

Under-construction

Verde Two (Tower West)

 Jl. Rasuna Said

CBD

Farpoint Realty

            152 Under-construction

Lavie

 Jl. Denpasar Raya

CBD

Wilsor Group

            302 Under-construction

South Hill

 Jl. Denpasar Raya

CBD

Tan Kian

            611

Le' Parc

 Jl. Thamrin

CBD

PT. Putragaya Wahana

            100 Under-construction

Regent Residences (tower 1)

 Semanggi

CBD

PT. Kencana Graha Global

            100 Under-construction

The Hundred Residence

 Mega Kuningan

CBD

PT. Farpoint Realty Indoneasia

            100 Under-construction

Under-construction

The Elements Epicentrum (2 Towers)

 Rasuna Said

CBD

Sinar Mas Land

            372 Under-construction

Capitol Suites

 Jl. Prapatan Raya

Central Jakarta

The Capitol Group

            327 Under-construction

Holland Village (Phase II)

 Cempaka Putih

Central Jakarta

Lippo Karawaci

            230 Under-construction

Signature Park Grande

 Jl. MT. Haryono

East Jakarta

KSO Fortuna Indonesia (Pikko)

         1,100 Under-construction

Sahid Garden Residence

 Ciracas

East Jakarta

Sahid Group

            476 Under-planning

Gold Coast Apartment (Atlantic Tower)

 Pantai Indah Kapuk

North Jakarta

Agung Sedayu

            568

Under-construction

Regatta Apartment (Tower New York)

 Pantai Mutiara

North Jakarta

Intiland

            186

Under-construction

Sedayu City (Tower Melbourne)

 Jl. Pegangsaan Dua Raya

North Jakarta

Agung Sedayu

            912 Under-planning

Sedayu City (Tower Darwin)

 Jl. Pegangsaan Dua Raya

North Jakarta

Agung Sedayu

            936

Under-planning

The Kensington Royal Suites (4 Tower)

 Kelapa Gading

North Jakarta

Summarecon

            790 Under-construction

Gold Coast Apartment (Bahama Tower)

 Pantai Indah Kapuk

North Jakarta

Agung Sedayu

            600 Under-construction

Gold Coast Apartment (Carribean Tower)

 Pantai Indah Kapuk

North Jakarta

Agung Sedayu

            600 Under-construction

Gold Coast Apartment (Honolulu Tower)

 Pantai Indah Kapuk

North Jakarta

Agung Sedayu

            600 Under-construction

Grand Marina Ancol

 Ancol

North Jakarta

PT. Bangun Setia Cipta (Jaya Ancol)

            672 Under-planning

Bellevue Place

 MT Haryono, Tebet

South Jakarta

Gapura Prima

            240 Under-construction

The Aspen Peak at Admiralty (Tower D)

 Jl. Fatmawati

South Jakarta

PT. Harmas Jalasveva

            322 Under-construction

Casa Grande Residence 2 (Tower Angelo)

 Jl. Casablanca

South Jakarta

Pakuwon Group

            350 Under-construction

Casa Grande Residence 2 (Tower Bella)

 Jl. Casablanca

South Jakarta

Pakuwon Group

            350 Under-construction

Casa Grande Residence 2 (Tower Chianti)

 Jl. Casablanca

South Jakarta

Pakuwon Group

            350 Under-construction

Pondok Indah Residences (3 Towers)

 Pondok Indah

South Jakarta

Metro Pondok Indah

            880 Under-construction

Selatan 8 (Tower Prabu)

 Jl. Raya Ulujami

South Jakarta

Karya Cipta Group

            344

45 Antasari (2 Tower)

 Antasari

South Jakarta

Cowell Development

         1,924 Under-construction

Arzuria Apartment

 Jl. Tendean

South Jakarta

Tolaram Group

            210 Under-construction

Pakubuwono Spring (2 towers)

 Jl. Teuku Nyak Arief No.9

South Jakarta

PT. Simprug Mahkota Indah (Agung Podomoro Group)

            545

Under-construction

Branz Simatupang (2 tower)

 TB. Simatupang

South Jakarta

Tokyuland

            381

Under-construction

Synthesis Residence Kemang (3 towers)

 Jl. Ampera Raya No.17

South Jakarta

PT. Synthesis Development

         1,100 Under-construction

The Ease Brawijaya

 Jl. Taman Brawijaya III Kebayoran Baru

South Jakarta

PT. Bhakti Usaha Dinamika

              54 Under-planning

Gianetti Apartment

 Jl. Kebon Jeruk Raya, Kemanggisan

West Jakarta

Bangun Investa Graha

            500 Under-construction

Under-construction

Gallery West

 Jl. Panjang No 5

West Jakarta

AKR

            280 Under-construction

Ciputra International Puri Indah (Tower Amsterdam)

 Jl. Lingkar Luar Barat

West Jakarta

Ciputra

            412 Under-construction continued

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Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Apartment name

location

region

developer

#units

Status

 Tanjung Duren

West Jakarta

Agung Podomoro Group

            300 Under-construction

Citra Lake Suites (Tower Rosewood)

 Jl. Raya Kresek

West Jakarta

Ciputra Group

            104 Under-construction

Citra Lake Suites (Tower Greenwood)

 Jl. Raya Kresek

West Jakarta

Ciputra Group

            126 Under-construction

continuation Grand Madison Park

Citra Lake Suites (Tower Oakwood)

 Jl. Raya Kresek

West Jakarta

Ciputra Group

            117 Under-construction

Citra Lake Suites (Tower Sherwood)

 Jl. Raya Kresek

West Jakarta

Ciputra Group

            122 Under-construction

Aerium Taman Permata Buana (2 towers)

 Taman Permata Buana

West Jakarta

Sinar Mas Land and Itochu

            491

Under-planning

Ciputra International Puri Indah (Tower Barcelona)

 Jl. Lingkar Luar Barat

West Jakarta

Ciputra

            335

Under-construction

Puri Mansion Apartment (Tower Crystal)

 Jl. Lingkar Luar Barat, Puri Kembangan

West Jakarta

Agung Sedayu Group

            700 Under-construction

West Vista (2 towers)

 Jl. Lingkar Luar Barat No.8, Duri Kosambi

West Jakarta

PT. Harapan Global Niaga

Citra Living Apartment (Somerset Tower)

 Jl. Citra 7, Kalideres

West Jakarta

Citra Mitra Graha KSO

            312 Under-construction

Citra Living Apartment (Orchad Tower)

 Jl. Citra 7, Kalideres

West Jakarta

Citra Mitra Graha KSO

            312 Under-construction

Citra Living Apartment (Newton Tower)

 Jl. Citra 7, Kalideres

West Jakarta

Citra Mitra Graha KSO

            312 Under-construction

The Suite (W Hotel Tower)

 Jl. Prof. Dr. Satrio

CBD

Ciputra

            200 Under-planning

The Residences at The St. Regis Jakarta

 Jl. H.R Rasuna Said

CBD

Rajawali Property Group

            164

Arandra Residence (was Sentosa Residence)

 Jl. Cempaka Putih Raya No.1

Central Jakarta

Gamaland

            687 Under-construction

         2,840 Under-construction

2019 Under-construction

Menara Jakarta (Tower Equinox)

 Kemayoran

Central Jakarta

Agung Sedayu

            396 Under-construction

Menara Jakarta (Tower Azure)

 Kemayoran

Central Jakarta

Agung Sedayu

            860 Under-construction

The Linq Kemayoran (2 towers)

 Kemayoran

Central Jakarta

KG Global

         1,020 Under-planning

Menteng 37

 Jl. Menteng 37

Central Jakarta

Pikko Group & Wijaya Wisesa (JV)

The H Residence Kemayoran (Lotus)

 Jl. Rajawali Selatan

Central Jakarta

PT Hutama Karya Realtindo

            252 Under-planning

Jaya Ancol Seafront - Oceana Tower

 Pademangan, Ancol

North Jakarta

Jaya Ancol

            524 Under-construction

Orient Residence

 Jl. Yos Sudarso, No 76

North Jakarta

PT Tri Raton Mega

            225 Under-planning

Fatmawati City Center - Corona Park Suite Tower

 Fatmawati

South Jakarta

Agung Sedayu

            620 Under-planning             630 Under-planning

              99 Under-planning

Royal Park at Kebayoran (Arlington Tower)

 Jl. Cileduk Raya 18, Cipulir

South Jakarta

PT. Trixindo Selaras

Ratu Prabu 3 Residences

 TB. Simatupang

South Jakarta

PT Ratu Prabu Tiga

Samara Suites (was The Residence Gatot Subroto)

 Jl. Gatot Subroto

South Jakarta

Synthesis Development

            300 Under-planning

Lavish Kemang Residence

 Jl. Kemang Raya No.3, Bangka

South Jakarta

PT Kemang Karya Utama

            474 Under-planning

Green Sedayu Apartment (Tower Pasadena)

 Jl. Kamal Raya, Cengkareng

West Jakarta

Agung Sedayu

            644

Under-planning

Permata Hijau Suites (2 towers)

Jl. Raya Kebayoran Lama No.55

South Jakarta

PT Palmerindo Properti

649

Under-planning

Daan Mogot City Apartment (phase I) (3 towers)

Daan Mogot

West Jakarta

PT China Harbour Jakarta Real Estate Development

700 Under-planning

Source: Colliers International Indonesia - Research

7

Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

              61 Under-construction

Demand Indonesia’s GDP grew at 5.18% YoY in Q2 2016, above the market expectation of 5% and the actual 4.91% GDP in Q1 2016. This positive economic outlook resulted to a modest increase in the average take-up rate of apartments in Jakarta. With limited amount in the newly launched projects, developers will focus more on selling the remaining stocks of projects under construction. As a result, sales activities within the reviewed period mainly occurred in these projects, which in turn increased the average take-up rate very modestly to 86.9% from 86.7% in the previous period.

Take-up Comparison between Existing and UnderConstruction Projects Q3 2015

Q2 2016

Q3 2016

QoQ

YoY

Existing Projects

96.0%

96.2%

96.3%

0.1%

0.3%

Under-Construction projects

68.4%

68.1%

68.5%

0.4%

0.1%

Average (all projects)

85.7%

86.7%

86.9%

0.2%

1.2%

Source: Colliers International Indonesia - Research

Several marketing appetisers continued to be offered and remained the same as in the previous period. These include a flexible payment term, discounts, direct prizes and longer instalment terms without interest (provided by developers). The takeup rate performance did not change, as the CBD continues to gain the highest figure of 94.4%. A moderate decline trend occurred because some projects that have been previously introduced are now available in the market, but performing below the average rate. Meanwhile, South Jakarta and other non-prime areas recorded an upward trend, both quarterly and yearly, driven by a continued absorption in particular projects that are still under construction. Amid the current sluggish market, it is crucial for developers to commit to a timely handover.

Take-up Rate Changes in Different Locations in Jakarta Q3 2015

Q2 2016

Q3 2016

QoQ

YoY

CBD

96.8%

94.5%

94.4%

-0.1%

-2.4%

South Jakarta

86.1%

85.9%

86.1%

0.2%

0.0%

Non-Prime area

83.9%

85.9%

86.1%

0.2%

2.2%

Source: Colliers International Indonesia - Research

After all, despite the favourable policies rolled out by the government, the city’s residential sales activity has not shown any significant impact. The Central Bank has issued several policies in an attempt to jack up credit demands that include cutting the interest rate three times since early 2016 and replacing the benchmark interest rate. Currently, the new benchmark follows the seven-day reverse repurchase (repo) rate at 5% and no longer uses the 12-month BI rate, which is standing at 6.50%. The adoption of the new rate was meant to improve the transmission mechanism of policy rate cuts to actually impact lending rates, which in turn stimulate the local economy.

8

On the other hand, approaching the end of September, undergoing the tax amnesty programme has allowed the collection of redemption payments amounting to IDR79.4 trillion, almost half of the target amount. At the same time, IDR3.18 quadrillion worth of assets had been declared (almost 80% of the target). The repatriated funds would be required to be invested in government bonds for a three-year period. The Ministry of Finance released a regulation (Finance Minister Regulation [PMK] No. 122 Year 2016) stating that repatriated funds may be invested in realty-related sectors, such as real estate (land and building). In view of this, the apartment market, especially the middle-upper to upper class projects might benefit from the regulation, as these are likely to be the preferred property type for investment. We expect to see an increasing interest in the middle to upper class projects, as a result of the programme. Some developers plan to release several apartment projects starting next quarter, such as Intiland in Kebon Melati, Senopati 2 by Senopati Aryani Prima and Southgate by Sinar Mas Land in Tanjung Barat, South Jakarta. Middle to lower segment apartment projects may take advantage of the new LTV regulation. Bank Indonesia issued the new regulation, No.18/16/PBI/2016, replacing the previous regulation, No.17/10/PBI/2015, which would improve the capability of first home buyers to purchase a property as the down payment at a lower rate, from 20% to 15%.

Comparison of Central Bank Regulation on LTV (2015 vs 2016) Type of Property

Previous*

Revised**

1st 2nd 3rd 1st 2nd 3rd Purchase Purchase Purchase Purchase Purchase Purchase

Apartment > 70 sq m

80%

70%

60%

85%

80%

75%

Landed House > 70 sq m

80%

70%

60%

85%

80%

75%

Apartment 22 - 70 sq m

90%

80%

70%

90%

85%

80%

Landed House 22 - 70 sq m

-

80%

70%

-

85%

80%

Apartment < 21 sq m

-

80%

70%

-

85%

80%

Landed House < 21 sq m

-

-

-

-

-

-

Notes: *) No.17/10/PBI/2015; **) No.18/16/PBI/2016 Source: Bank Indonesia

All in all, the abovementioned policy initiatives and programmes should provide a bright long-term outlook for the apartment market. A relaxed LTV, lower mortgage rates and a tax amnesty programme to take effect at the end of 2016 to 2017 will significantly impact the property market. At the very least, we believe any reforms would take some time to be implemented and translated into a significant and sustainable increase in the apartment demand.

Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Asking Price In Jakarta, a little improvement in the take-up rate was considered to be a driving factor for the increase in apartment prices during the reviewed period. In addition, several projects that showed commitment in the construction progress confidently increased their asking price. Overall, the asking apartment price in Jakarta moved gently by 0.8% QoQ and 4.6% YoY to IDR31.25 million/sq m. The CBD area and South Jakarta posted a similar increment level of 1.5% and 1.4%, respectively. With the relatively lack of new supply pipeline, the price of apartment in the CBD should go up further. Compared to the other areas in Jakarta, the CBD’s expensive land price is the most significant factor to the overall apartment price rate. Apartments in this location are particularly targeted to a limited market, like high-net-worthindividuals (HNWI). South Jakarta has a wide range of target markets, from middle-lower to luxury class apartments. Some parts of the area are considered as premium locations, whilst some parts are not. South Jakarta has always been attractive as a residential location, due to the city’s infrastructure and

supporting facilities (hospital, international school, international stores and associations), which make the area favourable for both investors and end users. As such, in the last three years, South Jakarta always showed the highest YoY increment amongst other areas. Meanwhile, other non-prime areas experienced the slowest price increment, by less than 1% QoQ and 4.6% YoY, due to the current sluggish market, coupled with the pressure in the supply side that eventually affects the overall price.

Apartment Price Changes in Jakarta Based on Area (in IDR/sq m) Q3 2015

Q2 2016

Q3 2016

46,322,208

48,246,435

48,949,148

1.5%

5.7%

South Jakarta

34,699,316

36,421,523

36,923,783

1.4%

6.4%

Non-prime Areas

22,429,188

23,300,386

23,454,168

0.7%

4.6%

Average

29,877,691

31,008,439

31,252,369

0.8%

4.6%

CBD

QoQ

YoY

Source: Colliers International Indonesia - Research

APARTMENT FOR LEASE Supply For the last two consecutive quarters, Jakarta has not seen any new serviced and non-serviced apartment projects. Thus, as of the end of September 2016, the cumulative supply of apartments for lease stood at 8,780 units, consisting of 59% serviced apartment and 41% non-serviced apartment. For several years, the CBD and South Jakarta are irreplaceable as homes for expatriate communities due to their proximity to business districts and international schools.

Furthermore, there are no new projects either for serviced or non-serviced apartment in Jakarta during the reviewed period. Having said that, the apartment-for-lease market is expecting to receive a total of more than 890 units from six projects until 2019. Global brands, such as Oakwood, The Ascott Limited and Frasers Hospitality, will operate most of those projects. Fraser Residence Serenia Hills and Fraser Suites Kebon Melati projects, both to be developed by Intiland, are still in the planning stage.

Apartment for Lease Projects Pipeline Name of Development

Beginning Year of Operation

Location

Area

#unit

Fraser Suites at Ciputra World 2

2017

Jl. Prof. Dr. Satrio

CBD

200

Oakwood Premiere Jakarta at District 8 Senopati

2017

Senopati

South Jakarta

378

Ascott Menteng Jakarta

2019

Menteng

Central Jakarta

150

Fraser Residence Serenia Hills

2019

Cilandak, Lebak Bulus

South Jakarta

TBA

Fraser Suites Kebon Melati

2019

Kebon Melati, Tanah Abang

South Jakarta

TBA

Serviced Apartment at Lavish Kemang Residence

2020

Jl. Kemang Raya No.78 A

South Jakarta

162

Source: Colliers International Indonesia - Research

9

Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

Occupancy

Rental Rate

The average occupancy rate of apartment for lease in Jakarta during Q3 2016 rose slightly from 71.5% to 73.0%, mainly generated by new contracts of short-term lease in serviced apartments. Demand from short-term tenants generally were for business or leisure purposes, with rental period from daily to three months rents. Such transactions helped increase the occupancy for serviced apartment from 62.8% to 68.0% this quarter. Corporate clients may come from telecommunication sector, embassy staffs, non-government organization (NGOs) and expatriates who work on project-basis such as infrastructure works. Such clients generate demand for apartment and push the increase in occupancy during this period. Further, some serviced apartments, particularly which are located in the CBD, reported that they started to see growing number of inquiries from Chinese expatriates.

The rupiah strengthening against the US dollar created an illusion of a lower rental rate during the reviewed quarter. Also, a few non-serviced apartments in South Jakarta have lowered their rental rates by 17% in order to attract potential tenants. This has resulted to a modest decline in the average rental rate. Furthermore, as of Q3 2016 the average rental apartmentfor-lease rates in the CBD was recorded at IDR371,322/sq m/ month, whilst in South Jakarta, including non-prime areas, it was recorded at IDR223,747/sq m/month.

In contrast with serviced apartment, occupancy of non-serviced apartment fell slightly by 0.5% to 75.7% in the reviewed quarter. Besides of the most reported reason of some existing lease contracts expiration, some apartments reported that most of new tenants are currently expatriates without family who do not require such big unit like 3-BR of which most of old nonserviced apartments offer. This has resulted in some tenants turning to strata-title leases (individually owned apartment).

Average Occupancy Rates in Different Regions Q3 2015

Q2 2016

Q3 2016

QoQ

YoY

CBD

79.5%

76.1%

77.6%

1.5%

-2.0%

South Jakarta

73.1%

70.4%

72.8%

2.4%

-0.3%

70.0%

68.0%

69.0%

0.9%

-1.1%

Non-Prime area

Average Rental Rates of Apartment for Lease in Different Locations (in IDR/sq m/month) Q2 2016

Q3 2016

QoQ

CBD

374,061

371,321

-0.7%

South Jakarta (including non-prime areas)

224,178

221,950

-1.0%

Source: Colliers International Indonesia - Research

Amidst tight competition from the new and individually owned apartment units as well as limited number of expatriate arrivals, the growth in the rental rate is expected to be moderate compared to the previous years. Quarterly rental growth was relatively stable, as apartments for lease increased their rental rates on a yearly basis. Typically, the increment of rental rates for serviced apartments are higher and more periodic compared to non-serviced apartments, with 5% to 8% increment per annum, even amid the current sluggish market. Meanwhile, non-serviced apartments generally review new rental rates in a two or three-year period with lower percentage.

Source: Colliers International Indonesia - Research

Concluding Thought Average Occupancy Rates at Different Type of Apartments Q3 2015

Q2 2016

Q3 2016

QoQ

YoY

Leased

77.7%

76.2%

75.7%

-0.5%

-2.0%

Serviced

67.1%

62.8%

68.0%

5.2%

0.9%

Source: Colliers International Indonesia - Research

We anticipate the number of long-stay tenants in apartment for lease will gradually decrease. The tight competition with newly operating and individually owned apartments will hamper the increase of the overall occupancy rates of apartment for lease. The individually owned apartment units are the most viable option for employees who have limited housing allowance because the individually owned apartments offer a more flexible payment and affordable rates amid the gloomy condition particularly due to cost cutting measures implemented by a number of multi-national companies.

Overall, the economy will likely to grow moderately this year. Bank Indonesia expects weaker government spending in the second semester of 2016, which will further put downward pressure on the outlook as they lowered the growth forecast to 4.9%-5.3%, slightly down from the previous projection of 5.0%5.4% YoY. Therefore, we expect the market to remain quiet in the coming quarter. However, recent policy initiatives including interest rate cuts, economic stimulus packages and loosened LTV ratio will brighten the long-term outlook. Furthermore, if the ban on indent mortgage over unfurnished properties remains in place, although the down payment requirement has been relaxed, this is likely to continue to keep the lid on demand.

10 Colliers Quarterly | 31102016 | Jakarta | Apartment | Colliers International

For more information:

Contributors:

Ferry Salanto Senior Asociate Director | Research +62 21 3043 6888 [email protected]

Hern Rizal Gobi Assistant Manager | Research

Copyright © 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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