Demand for high-end property to drive Jakarta’s condominium sector

Five high-end condominium projects are scheduled for completion in Jakarta this year.

2013 is expected to register positive growth in Jakarta’s property market according to a recent report by real estate management firm Jones Lang LaSalle.

Jones Lang LaSalle expects a gradual increase in market occupancy in 2013, which should be followed by steady rental growth in the range of 14-15 percent year on year.

Growing demand for luxury urban living and a low interest rate environment should also drive Jakarta’s condominium market, according to research. Sales will be supported by quality projects attached to international high-end hotel brands.

Growth in expatriate arrivals and corporate leasing is expected to propel demand in the luxury rental apartment sector in 2013, according to the report.

Capital values are expected to improve as more people perceive residential properties as attractive investment opportunities offering good rental income.

Five high-end condominium projects are scheduled for completion in 2013, and will add approximately 895 units to the sector.

In Q42012, existing stock in Jakarta’s leasing market increased to 2,327 units according to the report. In the same quarter, the completion of the Plaza Senayan Tower C & D added approximately 220 units to Jakarta’s luxury rental sector.

No condominium projects were completed in Q42012 and supply remained at 6,591 units in total.

Net effective rents rose by approximately 3.4 percent quarter-on-quarter to US$205 per sqm per year as a result of strong demand in the rental market. Rents rose by 17.8 percent year-on-year.

Capital values grew by 27.5 percent year-on-year and yields compressed to 9.5 percent by the end of 2012.

 



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