Despite the Easing of the Pandemic, Jakarta Office Occupancy Rates Fell in 2022

In 2022, the wave of Covid-19 transmission in Indonesia began to subside. The public could move freely in public spaces, and companies were allowed to resume work in the office or implement work from office (WFO).

However, occupancy in office buildings in Jakarta in 2022 actually decreased, even lower than at the beginning of the pandemic, as shown in the graph.

According to Colliers data, the occupancy decline occurred both in central business districts (CBDs) such as Sudirman, Thamrin, Mega Kuningan, and Gatot Subroto, and outside the CBDs.

At the end of 2022, the office building occupancy rate in the Jakarta CBD reached 74.7%, down from 83.6% in 2020.

Meanwhile, office occupancy outside the Jakarta CBD was only 70.8% at the end of 2022, also down from 80.6% in 2020.

"One factor hindering the absorption of office space is the still uncertain economic conditions, which haven't fully recovered," said Ferry Salanto, Senior Associate Director of Colliers Indonesia, in a virtual press conference earlier this year (January 4, 2023).

"There are indications that demand for office space is decreasing because several companies are holding back on relocation or expansion, primarily waiting for more stable economic conditions," he continued.

Ferry also predicted that the occupancy trend will remain sluggish this year due to a large supply of new buildings.

According to Colliers data, there are 5 office building construction projects in the Jakarta CBD projected to be completed in 2023: the T Tower (Gatot Subroto), Rajawali Place-St Regis Office Tower (Rasuna Said), Autograph Tower (Thamrin), Luminary Tower (Thamrin), and Jakarta Mori Tower (Sudirman).

"The influx of new buildings is quite high, so in 2023 we predict that occupancy will still be on a downward trend. Occupancy might improve in 2024 because there will be no new supply entering the market," said Ferry.