Performance of Rental Apartments Early Years Still Slow
Bisnis.com, JAKARTA – The property market in the apartment rental sector in Jakarta in the first quarter of 2019 has not shown improvement from the previous quarter, because the number of buyers and tenants currently comes from end-users.
Facing increasingly fierce competition, developers generally will highlight the advantages of access through the distance of the project with ongoing infrastructure as one of its sales strategies.
Based on data from Colliers International Indonesia, for apartments in general, both rents and strata, there will be an additional supply of around 36,124 units in Jakarta until 2021 with absorption rates estimated at 87 percent by the end of 2019 and 89 percent by 2021.
Of this total, the total supply of leased apartments reached 9,052 units, with a 61 percent share of serviced apartments and the remaining 39 percent were non-service apartments.
Meanwhile, in the next three years, Jakarta is also predicted to get an additional supply of 641 units of rental apartments from several new projects such as Oakwood in District 8 Senopati, Somerset Kencana Jakarta, Somereset Residence Jakarta, and Ascott Menteng Jakarta.
“Even though the supply is limited, the rental apartment market still has to face intense competition with other apartment sectors such as strata title apartments, which are usually more friendly and more attractive,” Ferry Salanto, Senior Associate Director of Colliers International Indonesia said recently.
Then, for the occupancy rate, in the first quarter historically it was a quiet period for the rental apartment market because in general tenants, especially those from out of town or abroad, have returned to their original places, thus hampering the level of transactions.
This caused a decrease in the occupancy rate of rental apartments from 71.6 percent in quarter IV / 2018 to 70.4 percent in quarter I / 2019. However, despite slowing down, many service apartments have relatively high transaction activity.
Generally, transaction activity comes from tenants whose tenure in old apartments has expired or tenants looking for apartments with higher specifications or getting better locations.