Colliers has released its Quarterly Report for Q3 2022 regarding Jakarta’s office, apartment, retail, and hotel markets, as well as Bali’s hotel market.
More people have returned to living a mobile life around the capital. The Indonesian government is planning to declare the pandemic over as soon as several measurements are met, such as vaccination rates, amongst others.
There are companies still following a hybrid working system, meanwhile, several companies have fully returned to working from the office every weekday. Colliers finds that enquiries for office space are likely to improve despite a forecast of moderate growth.
“Vacant spaces left over due to downsizing activities have yet to be absorbed and still put great pressure on landlords who will need to adjust to flexible rental packages,” highlights Colliers.
As for the apartment sector, challenges in the property market remain despite a higher demand occurring in early 2022 due to more business activities taking place. It is suspected that apartment sales will remain at around the same level as in 2021.
“Several key factors are still impacting the market, these mainly being geopolitical instability, supply chain disruptions, and the threat of higher inflation impacting the cost of living,” continues Colliers.
Back to Jakarta’s residents being more mobile; this has impacted more activities and happenings in shopping centres, both by visitors and retailers. Exhibitions, entertainment, and events are some of the biggest contributors.
“However, this has yet to impact occupancy costs, particularly for malls that are still registering low occupancy. In addition to that, an unstable economic projection continues to put pressure on retail businesses,” writes Colliers.
Not to mention the surging fuel price. Colliers believes that this very likely will have a domino effect on increasing production and operational costs, thus impacting goods prices and will very likely decrease purchasing power.
Jakarta’s hotel market, however, is showing peak performance throughout 2022, reports Colliers. Relaxed domestic and international travel regulations, businesses taking off again, and offline activities resuming have pushed room occupancy upward, as well as driving a moderate increase in the use of meeting rooms.
“The fear of global inflation and recession might create uncertainties in the hospitality industry, probably within the next year, but this year, most stakeholders in the hospitality industry will push the hotel market to perform better than last,” notes Colliers.
Meanwhile, in Bali, the hotel market sees the trend of travellers leaning towards resort-type hotels as it is more sustainable compared to a business-type hotel. Colliers expects that “people will still spend money for holiday after being impeded by many restrictions, and Bali remains the main holiday destination.“
Bali’s hotel market recovery is pinpointed to the gradual increase in both domestic and foreign visitors, occupancy, and daily room rates.
“If the scenario of a global recession in 2023 proves to be right, pressure is set to mount on the hospitality industry, possibly in 2023; however, we still believe that Bali will explore its capacity to perform better and that travellers will still spend money on vacations, at least until the end of 2022,” added Colliers.