Another operating building within the quarter was Graha kramat in Central jakarta, offering 4,680 sqm. these two buildings slightly increased the total cumulatively supply to 1.76 million sqm.
With a total of 145,218 office spaces in 2011, strata title offices will be dominant, at around 60%, not only from specially built strata-title offices but also from buildings like Central park office and Menara Satu, which also offer spaces partially for lease. on the contrary, from nine buildings under construction and under planning in 2012-2013, only one building is specifically offered as strata-title building: Sovereign plaza and half of the Alamanda Tower. this represents only 13% of the total space projected to come in 2012-2013.
Relocation and expansion activity continues to boost occupancy level. Further, with no new buildings being completed in this quarter, room for higher occupancy is wide open. this brought the overall occupancy for the quarter up to 91.6%, higher by 2.5% than what was achieved in the previous quarter. the occupancy level this quarter is also underpinned by four new office buildings completed in 2010.
Our records show that two strata-title buildings, Equity Tower and Bakrie Tower, have reached almost 100% commitment and therefore post a high occupancy level. meanwhile, two office buildings for lease (Menara Bidakara 2 and Sentral Senayan 3), completed in 2010, have also posted good performance, with an average occupancy of around 90%. the combined factor of higher occupancy of buildings completed before 2010 and the above-mentioned, completed in 2010, have accelerated the whole office performance in the CBD.
Indonesia moved closer to attaining an investment grade rating, after Fitch ratings raised Indonesia’s outlook on sovereign debt to positive from stable. this is expected to have a positive impact on the investment climate and on the property market in Indonesia. The number of new businesses that will come in through acquisition, expansion or relocation will provide a better climate for the office market to further grow.
Last year’s good year for the office market should strongly persist this year, underlined by increasing averages of asking rental rates. We still expect landlords to be more confident in introducing new rates, particularly given continued inquiries for office space, and the fact that total office space projected for 2011 will be less than in 2010.
Prices of strata-title offices for sale are expected to edge up further, following the increasing steel price, which is in line with the sound performance of strata-title offices. To date, the take-up rate for strata-title offices has reached more than 90%, with large numbers of new buildings reporting less vacancy. We will still witness some future office buildings opening either for sale or for lease. Such schemes introduced several years back are applicable for developers, particularly when they want to control the majority of the space.
2012 should be a strong tenants’ market for offices located in the CBD, given the significant supply. Tenants will have more options for new office buildings during the year. and, despite abundant supply over the next couple of years, the overall performance of office market is predicted to stabilize.