Research &
Forecast Report
Jakarta | Industrial
1Q 2015
“There were no significant change in the industrial market, but 82.18
hectares of land which were transacted this quarter has already
equaled 26% of last year’s total sales. This suggests that the industrial
market has been on track to follow sales trends of 2013 and 2014. As
it was seen in the last period of 2014, the overall sales during the
quarter were dominated by transactions with consumer goods and
logistics companies. Several industrial estates with limited land still
continue to introduce new higher prices, but prices in general are flat.“
Ferry Salanto | Associate Director - Research
Accelerating success.
Industrial Estate
Sector
Supply
Commencing in 2015, around 50 ha of new industrial land were
introduced by Bekasi Fajar Industrial Estate. This new industrial
land stock is ready for sale. Sizeable industrial land remains
limited and thus far, many plans for expansion have yet to be
concluded.
In 2015, the industrial market will receive quite sizeable
new industrial land from the expansion of several industrial
estates. Apart from the 50 ha available above, around 5.4 ha is
also available from Suryacipta. Another expansion of 25 ha of
commercial area will also be contributed by Bekasi Fajar, This
parcel will be offered at a different price from the industrial lots.
Thus far, only around 80 ha were recognised as this quarter’s
supply.
One industrial estate located in Bekasi is accelerating the
conclusion of land acquisition and permitting as part of the
expansion plans for around 600 ha. This industrial estate has
yet to confirm that the 600 ha extension plan on which they are
now working will be ready at a specified time. Likewise, two
industrial estates in Serang are also working on expanding the
industrial land with a total area of more than 400 ha.
Apart from operating industrial estates that are actively
expanding their zone are several upcoming industrial estates
located mainly in Karawang that are part of a big consortium
called Trans Hexa Karawang.
Several industrial estates will focus on delivering industrial
land that they have sold to industrial tenants. At the same time,
expansion is still needed for developers to maintain sales. Land
acquisition is one issue that takes most of the time even when
the land has been part of the whole master plan.
While some expansion projects are still underway, the
transaction activity continues. However, we only recognise
The Bekasi region concluded 30.78 ha of transactions mainly
contributed by Delta Silicon and GIIC. Other than that, two
industrial estates having smaller transactions were MM2100 and
Jababeka. Delta Silicon reported a total of 17.28 ha mainly from
warehouse companies and a small amount from workshops.
A total of 9 ha of land transactions were concluded by heavy
equipment and diaper companies this quarter in GIIC. The
2
1,400
1,200
1,000
800
600
400
200
Jakarta
Bogor
Bekasi
Tangerang
Karawang
2015YTD
2014
2013
2012
2011
0
2010
Total sales in Serang during 1Q 2015 jumped quite substantially
compared to last quarter due to sales at two major industrial
estates in this area, from 17.15 ha to 42.05 ha this quarter.
KIEC reported about 9 ha of land sales (from the total planned
transaction of 18 ha). This piece of land was sold to coal
storage company, which is related to the cement industry.
Modern Cikande, on the other hand, consistently records sales
transactions and has been always be the main driver of the
overall transactions in the greater Jakarta area. Thus far, 33 ha
of land transactions in Modern Cikande were concluded by
five companies from the chemical, probiotic, lubrication, baby
diapers and F&B industries. All of these transactions were by
new companies.
Annual Industrial Land Sales
2009
Overall, sales of industrial land were sluggish in this early period
of the year. Sales activity within operating industrial estates was
relatively low. The good thing is that the total sales during 1Q
2015 was much underpinned by the sales at two industrial estates
in Serang involving around 42 ha of land. Land absorption is
definitely weakening compared to the same quarter last year.
However, we still see that the industrial market is strong with
potential buyers continuing to ask for industrial land, although
the inquiries are still sporadic.
Similar to Tangerang, the Bogor region only concluded leasing
transactions at CCIE with a total of 1.1 ha from two workshoprelated companies.
2008
Total sales during 1Q 2015 was much underpinned by the sales
in the Serang area. In general, sales activity during the quarter
was quiet compared to the previous quarter. In Tangerang,
Millennium was the only active industrial estate.
Again, Millennium industrial estate consistently recorded sales,
albeit a small one of 1.82 ha and this was the only transaction
during 1Q 2015 in Tangerang.
2007
Demand
With limited land to offer, total land transactions in Karawang
are still about the same as last quarter. Contributed only by
Suryacipta and KIIC, this quarter’s sales are only 6.4 ha, not very
different from last quarter’s 8.5 ha. A new chemical industry took
5.4 ha in Suryacipta, which helped Suryacipta’s performance
after recording no transactions last quarter. This is the biggest
land transaction in Karawang for this quarter because KIIC
only recorded land sales of around 1.1 ha to a new auto-parts
company from Taiwan. In Karawang, two industrial estates
under the brand of Kota Bukit Indah did not record sales or
leasing transactions.
2006
The general issue in the industrial market remains the same, i.e.
the limited ready-to-build industrial land. Continued inquiries
for industrial land versus the limited stock of land on offer will
still characterise the overall industrial market although the
expectation of future industrial land is high. Since 2011, land
scarcity has been a major problem for most industrial estates,
and the substantial surge in land demand is at the crux of this
problem. In certain industrial estate locations like in Bekasi,
quite a few potential buyers seeking industrial land come to the
estate frequently there was less transaction recorded because
the land is limited. When the landlords have more bargaining
power, some of them that are located in highly demanded areas
like Bekasi or Karawang continue to sell raw land at the price of
ready-to-use land. Buyers are taking the position of acquiring
raw land at the current price to anticipate a further increase
when land is offered in a ready-to-use condition. Buying raw
land (at the ready-to-use price) is something common.
auto-related industry acquired 3 ha of land in MM2100 while
smaller land parcels totalling 1.5 ha in Jababeka were sold to
various companies like auto-related industries, warehouses,
logistics and general commercial buildings.
Hectares
new supply when land is ready for occupation with ready
infrastructure.
Serang
Source: Colliers International Indonesia - Research
Total land sales transactions during 1Q 2015 were 82.18 ha,
lower than last quarter (representing around 80% of total sales
in 4Q 2014). Despite being lower than last quarter, the total land
transactions recorded during 1Q 2015 has already equalled 26%
of last year’s total sales. This suggests that the industrial market
has been on the right track to follow the sales trend of 2013 and
2014.
Research & Forecast Report | 1Q 2015 | Industrial Estate | Colliers International
Land Sales Recorded During 1Q 2015 in Each
Industrial Estate
Types of Activities Industries During 1Q 2015
Modern Cikande
Delta Silicon
Logistics/
Warehousing
21.64%
Krakatau Industrial Estate Cilegon
Greenland International Industrial …
Heavy
Equipment
Machinery
7.30%
1.34%
Chemicals
7.95%
Suryacipta
MM2100 Industrial Town
Building
Material
10.95%
Medical
1.25%
Others
1.28%
Plastics
1.22%
Jababeka
Millenium
Consumer
Goods
27.99%
CCIE
KIIC
0
5
10
15
20
25
30
Food &
Beverage
13.60%
Automotive
5.48%
35
hectares
Source: Colliers International Indonesia - Research
For the last year, automotive and related industries have not
been the main driver for industrial land absorption. Last year,
the automotive industry only ranked number three after the F&B
and logistics / warehouse industries. This quarter, the automotive
industry plunged to seventh position after consumer goods,
warehouse, F&B, building materials, chemicals, and heavy
equipment industries. However, this condition cannot be used
to predict the overall picture of new tenant composition for the
full year of 2015, as the market will be very dynamic. One thing
that we can opine is that the warehouse and logistics companies
together with consumer goods will be the most active tenants for
this year.
Source: Colliers International Indonesia - Research
Land Price
One industrial estate in Bekasi introduced a new land price of
USD230/sq m, following the last quarter’s adjustment made by
the industrial estate adjacent to it. One industrial estate in this
location with the biggest land bank kept adjusting the land price
and monitored the price dynamics, particularly in Bekasi and
Karawang. To date, they adjusted the price from USD185 to 195/
sq m this quarter. Other than these two industrial estates, prices
have been stable. The average land price for available industrial
plots in Bekasi was registered at USD222.47, about the same as
the price last year.
Another industrial estate in Serang was also quite confident
with the new price of IDR1.9 million/sq m, representing a 8.5%
increase over last quarter. This brought the average industrial
land price in Serang to USD132.77/sq m (after converting from
local currency to US dollars).
Other than these two regions, industrial land prices are stable in
Bogor, Tangerang and Karawang. There might be a slight price
adjustment during 2015, depending on the economy and sales
performance for the full year of 2015.
3
Research & Forecast Report | 1Q 2015 | Industrial Estate | Colliers International
Greater Jakarta Industrial Maintenance Cost
$0.10
USD 200
$0.08
Bekasi
Tangerang
Karawang
Serang
Land price (per sq m)
lowest
highest
Bogor
Bekasi
Tangerang
2015YTD
2014
2013
2011
2012
Karawang
Serang
Source: Colliers International Indonesia - Research
Industrial Land Prices and Maintenance Costs*
region
2006
2015YTD
2014
2013
2012
2011
2007
Bogor
2010
$0.00
2009
USD 0
2008
$0.02
2006
USD 50
Source: Colliers International Indonesia - Research
maintenance costs
(per sq m per month)
average
lowest
highest
average
USD 0.06
Bogor
USD 120.0
USD 218.7
USD 169.3
USD 0.06
USD 0.06
Bekasi
USD 195.0
USD 250.0
USD 222.5
USD 0.06
USD 0.08
USD 0.07
Tangerang
USD 148.4
USD 156.2
USD 152.3
USD 0.03
USD 0.08
USD 0.06
Karawang
USD 170.0
USD 200.0
USD 185.0
USD 0.05
USD 0.10
USD 0.06
Serang
USD 117.2
USD 148.4
USD 132.8
USD 0.03
USD 0.05
USD 0.04
*1USD = Rp 12,804
Source: Colliers International Indonesia - Research
Maintenance Cost
In general, maintenance costs stood at the same level as last
quarter. Only in Serang did two operating industrial estates
announce adjustments in service charges during the quarter
under review. The average service charge in Serang was IDR449/
sq m/month last quarter and in 1Q 2015 it rose to IDR592/sq m/
month.
4
$0.04
2010
USD 100
$0.06
2009
USD 150
2008
US $/ sq m/ month
USD 250
2007
Greater Jakarta Industrial Land Price
Concluding Thought
The industrial market initiated the year with relatively good
performance with total sales for 1Q 2015 about a quarter of sales
in the full year of 2014. Albeit lower than last quarter, at least the
industrial market has signalled for further recovery as buyers
have been actively looking for industrial land during the quarter.
Land availability should not become a crucial issue, although
some prominent estates have find it difficulties in providing
big parcel land in prime location. Nevertheless several underconstruction industrial estates largely located in Karawang and
some other estates in Serang, Tangerang and Bekasi are working
on construction of industrial which would become significant
land bank in the future.
The cancellation of mega project Cilamaya port would broaden
the opportunity for industrial location to move further east to
Subang and Purwakarta. The government has indicated that
Cilamaya project would be shifted to other areas that would
not interfere with the very important Pertamina facilities for
distributing gas when the Cilamaya project is executed.
Research & Forecast Report | 1Q 2015 | Industrial Estate | Colliers International
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Primary Authors:
Ferry Salanto
Associate Director | Jakarta
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Ferry.Salanto@colliers.com
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