Optimism ahead: Jakarta 2022
Several rental apartment projects to enter Jakarta’s market in 2022.
2 minutes to read
The pandemic has negatively affected property growth in the last two years, including the delay of various development processes, followed by fewer visits from foreigners who usually occupy the rental apartments in Jakarta. The return of foreigners to the countries and their repatriation resulted in fluctuating performance of the rental apartment sector.
The total cumulative supply for both serviced and purpose-built rental apartments in the second half of 2021 decreased slightly by 0.7% (YoY).
The prolonged pandemic has continued to postpone several new projects which were initially expected to commence operations in 2021. However, ten new projects were in the pipeline, totalling 1,688 units that are expected to enter the market between 2022 and 2023. 70% of the total new supply will be located in the CBD area, and the remaining will be in the Prime Non-CBD area.
Most of the proposed serviced apartment projects managed by international operators are located within mixed-use developments.
With the Delta variant’s second wave hit between July and August 2021, the Jakarta Rental Apartment market has continued to face challenges with the border and local mobility restrictions (Emergency PPKM), causing disruptions in business activities and short-term holidays as well as a declining number of foreign expatriates.
However, demand inquiries from short-stay guests for the weekend “staycation” and Christmas-New Year holiday domestic travellers had picked up the pace during the last quarter of 2021 when the restrictions were eased. On the other hand, business demand coming from international corporates remained lagging.
Post-Covid demand recovery remains uncertain amid potential waves of new virus variants. Rental prices and occupancy rates are expected to continue under pressure given the possible looming third wave of the Omicron variant. Aggressive promotions in the form of attractive price discounts combined with complimentary services and facilities will remain to maintain stable occupancy levels.
Willson Kalip, Country Head Knight Frank Indonesia, states, “This year’s performance should be better than the previous year. New rental apartment projects ready to enter the market will be the continuous spirit to improve rental apartment performance”.
Accelerating the vaccination rollout to reach everyone, ensuring effective containment measures and maintaining strong monetary and fiscal support in the immediate term are essential to ensure business continuity and survival in the meantime.
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