July 23, 2012

Drive for legacy fuels skyscraper rush

Raras Cahyafitri, The Jakarta Post, Jakarta | Headlines | Mon, July 23 2012, 8:31 AM
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Based on property projects currently under development, the total number of skyscrapers in Jakarta will more than double, reaching 150 by 2015, due to the booming economy and the desire of rich individuals and companies to etch their signature in the skies.

“Now we have 70. Considering several planned projects, the number will be 75 by the year end, and 150 by 2015,” Jones Lang LaSalle Indonesia head of research Anton Sitorus said last week.

By the end of 2020, he said, the figure could reach 250 in total.


“Land prices have become increasingly expensive in Jakarta. Therefore, developers want to maximize the use of their land. Besides, they also want to make an iconic building on which they can put their names,” he said.

Among the notable skyscraper projects under construction include the Tower Ciputra World, named after entrepreneurship guru Ciputra, the founder of Indonesia’s largest publicly listed property company, PT Ciputra Property. The project development is nearing completion with some office space already available for rent.

Another property project bears not the name of a person, but the city itself, Menara Jakarta. The project was the brainchild of former president Soeharto, who dreamed of building the tallest building in Asia to raise Jakarta’s stature among global cities it would have had a summit soaring 558 meters.

Unfortunate events that followed the 1997-1998 financial crisis buried the former president’s ambition. Recently, however a consortium of property developers, PT Persada Japa Pamudja, said the project had won funding and would soon begin construction, aiming for completion in 2015.

Menara Jakarta construction will coincide another ambitious project. PT Danayasa Arthatama, a subsidiary of the Artha Graha Network, announced last month that it was raising funds to construct a much higher skyscraper, the Signature Tower.

With a height of 638 meters, the tower will be Indonesia’s tallest and the world’s fifth-tallest building. The project is expected to cost about $2 billion and be competed in 2020.

“Jakarta will continue to evolve and become a megalopolis, just like other big cities in the world, with skyscrapers coloring the city’s skyline. In the past we talked about buildings with 30 to 40 floors, now it has become 80 to 100 floors,” said LaSalle chairman Lucy Rumantir.

A growing economy, increasing purchasing power and corporate expansion have triggered higher demand for commercial properties, she said.

Based on LaSalle data, net take up of office space in the Sudirman Central Business District reached 86,000 square meters in the second quarter of the year, increasing by about 18 percent from the previous quarter. Rent prices also rose 5 to 8 percent in the second quarter compared to the previous quarter.

Supply for office spaces in central business districts are only 617,000 square meters up to 2014. The figure is relatively small, according to Anton, as last year’s net take up reached 400,000.

Net take up of office spaces of non-central business district areas increased 23 percent in the second quarter compared to the previous quarter. Supply of office space for non-business districts is estimated to be only about 384,000 square meters up to 2014.

“Over the next five years, Jakarta is expected to receive a massive amount of supply in commercial office sectors. The first wave of supply influx is expected no earlier than 2015,” Anton said.





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