Senin, 02/05/2011

Land Demand Growth in Jakarta’s Industrial Estates the World’s Highest

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Land Demand Growth in Jakarta’s Industrial Estates the World’s Highest
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INDUSTRIAL ESTATE DEMAND in Jakarta is now the highest in the world, resulting from the recovery of the Indonesian economy and the strengthening of the rupiah against the US dollar. A report issued by Cushman & Wakefield entitled “Industrial Space Across The World 2011” said that industrial real estates for lease in Jakarta have grown by 21.76% annually.

They are followed by industrial estates in Beijing (17.55%), Frankfurt (15.83%), Singapore (14.97%) and Shanghai (14.54%). The Cushman & Wakefield report also revealed lease tariffs and total lease costs in industrial estates in 53 countries. Of the 53 countries, Jakarta, Beijing and Singapore achieved the highest lease prices in 2010, the report said.

 

In terms of lease tariffs, Singapore’s industrial estates are the world’s highest. Surprisingly, they were in fourth position last year and ranked 19th in 2009. Still, the island state still could not replace London Heathrow as the most expensive industrial estates in the world in the past 10 years, with their current tariffs reaching 235 pounds per square meter per year. “Tokyo remained in the second place with 183 pounds per sqm per year while Geneva, with 164 pounds per sqm per year, rose to the third place from the fourth position in 2009,” the Cushman & Wakefield report said.

Barrie David from Cushman Wakefield Research Group said that this data indicates that the leasing market of industrial estates in Asia is still stable and will remain at the top of the ranking. According to him, property leasing tariffs in Asian industrial estates rose by more than 5% last year. This was in striking contrast with industrial estates in other continents which experienced a decline in their occupancy rates.

Meanwhile, Wira Agus, Associate Director of Cushman Wakefield Indonesia, said that the combination of rising demand from foreign investors, limited quality and ready-for-use industrial estates, and the strengthening of the rupiah against the US dollar has caused a drastic rise in industrial estate lease prices in 2010. This was the best condition in the past three years.

Data at Colliers International shows that the sales of industrial estates in 2010 rose by up to 2.5 times from the previous year. Industrial estate sales totaled 543 hectares. “Rising economic growth, controlled inflation, the strengthening of the rupiah and the relatively stable reference rates pushed demand in the property sector,” said Ferry Salanto, Research Division Manager of Colliers International.

Last year, Ferry said, industrial estates in Bekasi and Karawang were most in demand. Of them, 122 hectares were largely taken up by automotive industries and supporting enterprises. He said that one factor behind this situation was rising demand, which was 2.5 times higher than the previous year’s, due to many industries expanding their operations.

Price Hikes

Demand for industrial estates has increased since early 2011. As high demand has not been supported with adequate supplies, land prices have increased by up to 20%. A research conducted by Cushman & Wakefield showed that in Q1-2011 land demand reached 320 hectares, which was seven times higher than the same period of last year. At the moment, averaged sale prices of land in industrial estates are Rp 800,000 per square meters, or about US$ 91.8 per sqm.

Wira said that at the moment land demand from automotive and food industrial sectors is continuing to rise. These sectors will materialize their expansion plans namely the building of new factories in Karawang, Bekasi and Purwakarta. According to him, the three are most favored areas and that they accounted for 98% of total industrial estate sales in Q1-2011. The remaining 12% was spread in Serang and Tangerang. (JR)