This office building was the only one to be completed in Jakarta in Q1

It is a 90,000sqm office building in the Sudirman corridor.

A JLL report recently revealed that one office building, Jakarta Mori Tower, was added as a new completion in Jakarta in 1Q23. It has a total area of around 90,000 sqm and is located in the Sudirman corridor.

The only expected new supply for the remaining quarters of 2023 is Thamrin Nine 2 – Luminary Tower at around 40,000 sqm, located in the same office complex as Thamrin Nine 1 – Autograph Tower.

Here’s more from JLL:

Vacancy rate increases due to limited demand and a new completion

Positive net demand was recorded at around 10,000 sqm, by the opening quarter of 2023. One consulting company made the highest contribution (19%) to the positive demand when it partially relocated from an older Grade A building in the same corridor.

Companies in the technology and energy sectors were recorded as the main contributors to 1Q23 demand, with each sector contributing around 15%. In the quarter, one flex-space operator entered a Grade A building, taking up around 1,600 sqm in a joint operation with the landlord.

Rents continue to decline at the beginning of 2023

Rents continued to decline in 1Q23 and were recorded at -2.3% q-o-q and at -8.5% y-o-y due to limited demand and a low absorption rate for the newly-completed supply.

Despite the removal of social restrictions and with most economic activities gradually returning to their pre-pandemic levels, landlords of office buildings with lower occupancy are still expected to offer competitive rents.

Outlook: Market pressures and downsizing trends likely to remain

Enquiries are anticipated to remain healthy, but the demand is for smaller sizes, and decision-making is taking longer. However, vacancy rates are likely to continue rising, and falling rents are expected in the remaining three quarters of the year.

Various sectors and industry lines will likely remain cautious due to global economic headwinds. Hence, cost-saving is expected to remain the theme, with flight-to-quality as another continuing trend.

Note: Jakarta Office refers to Jakarta's CBD Grade A office market.