Demand: Limited Transactions as Impact of Related Government Policy
The impact of the related government policy (PPKM) remained during the review quarter and sales transactions remained limited. Demand may not recover as soon as it is expected as reflected by a – 38.6% decrease YoY, with total net absorption of 37.60 hectares.
This also reflected a QoQ demand change of -36.7%. Bekasi absorbed about 63.9% of demand during this quarter, followed by Karawang of about 25.79%, with the balance occurred in Serang. Bekasi and Karawang remained as the most sought-after areas by high-tech industries such as data center and automotive industries which are expected to continuously expand.
As of December 2021, the average occupancy rate of warehouse for lease in the Greater Jakarta area was recorded at 87.9%, an increase of 0.5% from in the previous quarter, with demand mainly from logistics related firms including e-commerce, and consumer goods.
Pricing: Land Prices Stood at the Same Level
The industrial land price remained relatively unchanged during the review quarter as impact of the pandemic on demand continued. As of December 2021, the average land price in the Greater Jakarta area was recorded at Rp 2,558,000 per sqm (-1.2% YoY), with change due mostly to the exchange rate. Meanwhile, the average asking rental rate of warehouses in the Greater Jakarta area was recorded at Rp.73,000 per sqm / month.
Hotel H2 2021
Supply: 3 Hotels Start Operating in the 2nd Semester of 2021
In the second semester of 2021, three major hotels of 4-star, 5-star and luxury hotels start operation in CBD and West Jakarta, adding 544 rooms to the supply. With the supply increase of 1.3% YoY, the total cumulative room supply in Jakarta stood at 41,724 hotel rooms. In line with the enactment of the Covid-19 Task Force regulation, travelers from abroad must undergo quarantine and to facilitate this, many 2-star to luxury hotels in Jakarta provide quarantine facilities which availability can be seen on the Quarantine Hotel Jakarta website. Future hotel supply will still be delayed pending the recovery of market conditions.
Demand: Average Occupancy Rates Experienced Annual Increase of 12% to 17%
After being sluggish since the declaration of national covid-19 pandemic in March 2020, the ease of PPKM (public activity restriction) level and decrease of total Covid-19 positive cases have improved the average monthly occupancy rate in December 2021 to 76%, far exceeded the average occupancy rate in the same month of 2019 of 61%.
In addition to the increasing meeting activities from both corporations and government, the increase in occupancy rate in the last few months of 2021 seems to have also been contributed by hotel rooms occupied for quarantine of travelers who have just arrived from overseas, even though the number of International and domestic travelers are still limited. The total passenger arrivals at Soekarno-Hatta International Airport during 2021 still experienced a decline of 65.4% and 7.6% from that in 2019 and 2020 respectively.
Average occupancy rates of 3-star, 4-star, 5-star and luxury segment experienced annual increase of 12% to 17% to 53.6%, 52.4%, 48.7% and 44.4% respectively in 2021.
ADR: Depressed Room Rates Continued
Despite the general improving performance of the market in 2021, hotel room rates continued to be under pressure. Average Daily Rate (ADR) of hotels in Jakarta is 1.7% lower than that in the previous year, YTD. The remained limited foreign business travelers made 4-star and 5-star hotels experience the most decline in ADR. Average Daily Rates in 2021: 3-star: Rp. 364,297 (3.0% YoY); 4-star: Rp. 550,121 (-5.3% YoY); 5-star: Rp. 990,170 (-5.4% YoY); and Luxury: Rp. 1,536,053 (2.7% YoY).
