THE Jakarta office market, especially in the central business district (CBD), shows a healthy recovery trend with premium building occupancy reaching 73% in the third quarter of 2024. This is data based on the JLL Indonesia report.
JLL Indonesia Head of Research Yunus Karim attributed this increase to strategy flight to quality.
Where tenants tend to choose higher quality buildings that offer better comfort, facilities and security, as well as competitive rental prices.
According to Yunus, this trend is an important factor in the efforts of many companies to reduce operational costs while looking for office locations that are more in line with modern workplace comfort and efficiency standards.
“Premium office buildings show stable occupancy growth, reflecting an increase in demand since early 2023,” said Yunus in Jakarta Property Market Review, not long ago.
This tendency for companies to switch to high-quality buildings opens up huge opportunities for premium building developers. Because demand continues to increase from tenants who are ready to invest in locations and facilities that can increase employee productivity and comfort.
Head of Office Leasing Advisory JLL Indonesia Angela Wibawa also underlined that there was a slight increase of 0.7% in rental prices for grade A office buildings, indicating momentum for rental recovery since 2015.
Apart from that, Jakarta’s non-CBD areas also felt the impact of the strategy flight to quality This, even though rental prices in non-CBD areas are relatively lower than in the CBD. A similar trend can be seen in the South Jakarta area, especially TB Simatupang, which is currently a favorite choice for tenants in the oil and gas sector and several other large companies.
With no new buildings entering the CBD market this year, as JLL Indonesia reports, buildings that offer premium facilities and quality are increasingly attracting the attention of tenants.
This condition creates a competitive environment for developers to continue to strengthen the selling value of premium buildings with various innovation strategies and quality improvements that support the needs of modern businesses in Jakarta. (Z-10)
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**Interview with Yunus Karim, Head of Research at JLL Indonesia**
**Editor**: Thank you for joining us today, Yunus. It’s great to have you here to discuss the latest findings on the Jakarta office market. Recently, the occupancy rate of premium buildings in Jakarta’s CBD hit 73%. What do you attribute this impressive recovery to?
**Yunus Karim**: Thank you for having me. The increase in occupancy can largely be attributed to the strategy known as “flight to quality.” This means that tenants are increasingly opting for higher quality buildings that provide better comfort, facilities, and security, all while being mindful of rental costs.
**Editor**: That’s interesting. Can you elaborate on why companies are choosing premium buildings over other options?
**Yunus Karim**: Certainly. In the wake of the pandemic, many companies are looking to optimize their operational costs. By choosing premium office spaces, they not only enhance employee satisfaction but also align with modern workplace trends that prioritize efficiency and comfort. This ultimately helps them maintain productivity while managing expenses.
**Editor**: So, has this trend been consistent since the beginning of the year?
**Yunus Karim**: Yes, we’ve actually witnessed stable occupancy growth since early 2023. The demand for premium office space has shown resilience, indicating that businesses are adapting to new standards and seeking environments that promote both employee well-being and operational efficiency.
**Editor**: Thank you for the insights, Yunus. This certainly paints a positive picture of the office market in Jakarta. As we look ahead, what trends do you foresee in the commercial real estate sector?
**Yunus Karim**: I believe we’ll see continued interest in premium properties, with a focus on sustainability and technological integration. Companies are increasingly recognizing the value of environmentally friendly and tech-savvy office spaces, which further enhances the appeal of these premium buildings.
**Editor**: Thank you, Yunus, for sharing your expertise with us today. It’s clear that the Jakarta office market is evolving in response to these changing dynamics.
**Yunus Karim**: Thank you for having me. I’m looking forward to seeing how this trend develops in the coming months.
