Developers Refrain, Apartment And Office Construction Stalls Due To The Pandemic

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JAKARTA - Property consultant Colliers Indonesia stated that the COVID-19 pandemic has caused property developers, both offices and apartments, to no longer be aggressive in building in line with the disruption of economic activity.

"Developers refrain from being too aggressive in building," said Senior Associate Director Research Colliers International Indonesia Ferry Salanto in an online property presentation in Jakarta, quoted from Antara, Wednesday, July 8.

According to him, at this time, the condition tends to decrease the supply of property units, as well as the tendency to decline in demand for various types of properties.

In fact, he continued, ideally if the supply is reduced so that it is not too aggressive in adding it, then from the demand side there should be an increase.

He revealed that several office building construction activities will be delayed in their construction completion time, while the buildings that will start operating in the second quarter of 2021 are Trinity Tower (in the CBD area or Jakarta's central business district) and Wisma Barito Pacific 2 (outside the CBD).

"Supply growth is relatively limited in the next two to three years. Currently, it is quite difficult to predict when developers will start construction of new buildings," he said.

Ferry also revealed that for the first time the occupancy rate for offices in the CBD area was below 80 percent, which was partly due to the reduction in office area.

Based on data from Colliers, the average occupancy rate for office buildings in the Jakarta CBD area is around 80 percent in the Thamrin area, 79 percent in both Sudirman and Satrio, 81 percent in both Rasuna Said and Gatot Subroto, and 71 percent in Mega Kuningan.

Previously, Colliers Indonesia's Head of Capital Markets & Investment Services Steve Atherton said that the implementation of emergency community activity restrictions (PPKM) would make property sector investors more cautious.

"With the new emergency PPKM regulation on July 3-20, local investors will be very careful," he said.

According to him, with the new rules, the movement of the property sector business will be more localized.

In addition, he said, at this time the property market optimism is still restrained, so they will prefer the safest step.