Office Occupancy in Jakarta’s CBD Experiences a Slight Decline in Q1 2023

Sudirman Central Business District or SCBD, South Jakarta, Indonesia

The occupancy rate of offices, particularly in the central business district (CBD), has experienced a slight decline in the first quarter of 2023. This was reported by Colliers International Indonesia.

The Senior Associate Director of Colliers International Indonesia, Ferry Salanto, stated that the decline in office occupancy in the CBD area was 3% quarterly, reaching 72%, while outside the CBD, the average occupancy rate in the first quarter of 2023 was recorded at 71.9% or tended to be stable compared to the previous quarter.

Salanto said during Colliers Virtual Media Briefing Q1 2023 on Wednesday (5/4/2023), “Additional supply has caused the occupancy rate to decrease by almost 3% compared to the fourth quarter of 2022.”

Moreover, the occupancy rate is expected to continue to decline until the end of 2023 as the amount of vacant space increases. The vacancy space is predicted to rise to 3.3 million square meters (m²), or around 7% increase. This increase is mainly due to new supply entering the market.

Salanto explained that this was partly triggered by supply factors. In 2023, the number of new office building supplies is quite significant, reaching above 300,000 m², so the total supply of office space in the CBD will reach 7.4 million m² by the end of the year.

For areas outside the CBD, it is estimated that there will be an additional 120,000 m² of office space, so the total space outside the CBD will reach 4 million m² at the end of 2023.

Salanto said, “This year’s growth could be high because the schedule has been delayed, but since construction is underway, there is no turning back. They must be completed this year, making the total supply appear significant.”

In response to the situation, office space managers have made slight adjustments to rental rates. The current rental rate for office space in the CBD is Rp246,030, while outside the CBD, it is Rp174,759.

The operation of several new premium-class buildings has caused rental rate calculations to grow by around 3% compared to the previous quarter for the CBD area, while for outside the CBD, it is still relatively stable.

Salanto concluded, “But basically, this price is still flat. If we look at the increase, it is not because the market is improving, but more because of the calculation and coincidence of premium buildings so that the price is above the market average.”