OFFICE MARKET UPDATE 1H 2016

SAVILLS PCIPANIN TOWER – SENAYAN CITY , 16TH FLOORJALAN ASIA AFRIKA LOT 19JAKARTA 10270

29 March 2016

AB O U T S AV I L L S

G L O B A L L E A D I N G P R O V I D E R

Established in the UK in 1855, Savills is one of the world’s leading providers of property services

with 600 offices and associates across more than 45 countries

Savills are listed on the London Stock Exchange and ranked number one by turnover, by the

highly regarded UK business magazine Estates Gazette, for each of the last ten years. Our

network of expertise throughout Asia Pacific provides our clients with a collaborative platform

like no other throughout over 45 offices and 27,000 staff.

• A FTSE – 250 Listed Company

• Established in 1855

• Market Capitalisation circa £860 million (2013)

• 600 offices and associates worldwide

• 27,000 staff throughout US, Europe, Asia Pacific, Africa and Middle East

• Largest UK real estate provider by income and profit

• No longer a purely residential agency, 70% of the firm’s revenues

now derive from commercial property

3

A WELL-ESTABLISHED GLOBAL

PRESENCE

Savills is one of the leading firms of

international property consultants

and real estate agents in the

world, with offices throughout Asia,

Australia, Europe, North America

and Africa,

A unique combination of sector

knowledge and entrepreneurial

flair gives clients global access to

real estate expertise of the highest

calibre.

We are regarded as an

innovative-thinking organisation

supported by excellent

negotiating skills. Savills chooses to

focus on a defined set of clients,

offering a premium service to

organisations and individuals with

whom we share a common goal.

S A V I L L S G L O B A L N E T W O R K

4

A S I A P R E S E N C E

Established in Asia since 1985, Savills provides its Asian client base with a full service operation

across all key segments

Headquartered in Hong Kong, with offices in 44 cities, and 22,500 staff in agency and

management services, we provide a wide range of high-quality, comprehensive property-

related services to developers, owners, tenants and investors across all the key segments of

retail, commercial, industrial, residential, and investment property.

5

A W A R D W I N N I N G , I N T E R N A T I O N A L R E C O G N I T I O N

Asia Pacific Property Awards Winner

2014-15

Best Real Estate Agency,

Best Real Estate Agency

Mktg,

Best Property Consultancy

Website, Best Property

Consultancy Mktg

Highly Commended Lettings

Agency, Highly Commended

Property Consultancy

UK Business Superbrand 2014

The leading UK real

estate Superbrand for 6th

consecutive year

Estates Gazette Property Advisor of the Year 2013

Savills won the accolade

for Residential Property

Advisor of the year.

Residential Sales Agency of the

Year 2013

Awarded UK sales

agency of the year at

Property Week’s annual

Resi Awards

TIMES Graduate Recruitment Award 2013

Graduate Employer of

Choice for Property.

Winner for 7 consecutive

years

Best Overall Marketing Campaign

The best overall

marketing campaign for

residential brand building

Leisure Agency of the Year 2013

Leisure agency of the

year at Property Week’s

annual Property Awards

Investors in People Gold

2013

Savills Property

Management won the

2013 gold award from

Investors in People

Retail Agency Team

of the Year 2013

Retail agency team of the

year at the annual Property

Managers Association

Awards

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S E R V I C E W E P R O V I D E

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Having operated in Asia for over 25 years, Savills offers a complete range of advisory services to developers, landlords, tenants as well

as property funds and private individuals:

C B D O F F IC E M AR KE T U PD AT E 1H 2016

I N T R O D U C T I O N – J A K A R T A C B D M A P

9

CBD (Golden Triangle)

Commercial area bounded by:

Jl. Sudirman - Thamrin

Jl. Gatot Subroto

Jl. Rasuna Said (Kuningan)

Additionally,

Jl. Satrio (Casablanca)

Jl. Mas Mansyur

Jl. Asia Afrika

Incl. SCBD & Mega Kuningan complex

are included within the CBD

classification.

The Non-CBD

Covers the commercial areas outside

of the CBD, which classified by

municipality:

Central Jakarta

South Jakarta

East Jakarta

West Jakarta

North Jakarta

J A K A R T A C B D O F F I C E M A R K E T R E V I E W – S U P P L Y & D E M A N D

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Office building supply in CBD

increased significantly in 2015. More

than 510,000 sqm office space

entered the market last year.

Total existing stock in the Jakarta CBD

by end of 2015 stood at around 5.18

million sqm.

The majority of existing stock in the

CBD are Grade B buildings (34%)

followed by Grade A buildings (33%).

Premium office buildings account for

around 20% of total stock.

New enquiries were limited in 2015 due

the slowing down economy. The

period of 2014 and 2015 only saw net

space take-up below 100,000 sqm.

As a result, some of the newly-

completed projects experienced low

occupation upon opening. This led to

an increase in vacancy from 4.9% at

end-2014 to 11.8% by end-2015.

0%

5%

10%

15%

20%

25%

30%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2010 2011 2012 2013 2014 2015

New Supply Net Take-up Vacancy

Supply, Demand & Vacancy – CBD Overall

4Q2015 4Q2014

Existing Stock (sqm) 5,187,114 4,729,523

Premium 1,047,360 982,060

Grade A 1,714,667 1,300,892

Grade B 1,771,344 1,768,388

Grade C 653,743 678,183

Market Indicators – Office | CBD

© Copyright Savills 2016

J A K A R T A C B D O F F I C E M A R K E T R E V I E W – S U P P L Y & D E M A N D

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There were limited enquiries during

the period of 2014 and 2015 – Net

office take-up idling below 100,00

sqm, respectively.

Vacancies in most segments

remained stable, except in Grade

A and Premium segment due to

significant supply increase in 2015

and slowing economic condition.

Premium Grade buildings vacancy

dropped to around 8.7%.

Meanwhile, available space in

Grade A buildings surged from

6.4% at end 2014 to 21.9.% by mid-

2015.

Currently, there is around 613,000

sqm of vacant space in Jakarta

CBD, 61% of which are Grade A

buildings.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015

Premium Grade A Grade B Grade C Annual Take-up

Net Take-up & Proportion by Grade

0%

5%

10%

15%

20%

25%

30%

35%

40%

2010 2011 2012 2013 2014 2015

Premium Grade Grade A Grade B Grade C

Vacancy (By Grade)

© Copyright Savills 2016

J A K A R T A C B D O F F I C E M A R K E T R E V I E W – R E N T A L

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Rents by Grade Average achievable rental price has

increased nearly 2.5 times in 2014 from

2010. However, rental dropped in

2015 following market slowdown

starting in 2014.

The market slowdown had also

impacted rental growth over the past

2 years particularly for Premium

buildings. Further in 2015, a market

correction applies to all grades.

While all other segments have

suffered from declining rental, rents in

Premium Grade buildings declined by

around 12% in USD terms compared

to last year.

By end-2015, both Premium and

Grade A rental stood at US$32.28 and

Rp 266,042/sqm/month, respectively.2H2015 2H2014

AVG Rent (/sqm /mth) Rp 220,231 Rp 227,908

Premium Grade US$ 32.28 US$ 36.60

Grade A Rp 266,042 Rp 286,918

Grade B Rp 206,160 Rp 215,050

Grade C Rp 144,072 Rp 147,984

Market Indicators – Office | CBD

© Copyright Savills 2016

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015

Premium Grade A Grade B Grade C

IDR

/sqm

/month

J A K A R T A C B D O F F I C E M A R K E T R E V I E W – M A R K E T O U T L O O K

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Significant amount of new supply

is anticipated to enter the market

in Jakarta CBD in the next four

years.

Approx. 2.3 million sqm of new

supply is scheduled for

completion between now and

2019 - This number does not

include projects that are currently

in the planning and approval

stages.

On average, the market will

receive 500,000 sqm of annual

supply over the next two years

and with this likely grow to

600,000 sqm p.a. in the 2018-2019

period.

By grade, majority of future

supply contribution will be from

Grade A office (55%), followed by

Premium Grade (41%).

By area, around half of the future

supply will be realized from

projects along Sudirman corridor.

2015 2016 (F) 2017 (F) 2018 (F) 2019 (F)

Future Stock (sqm) 510,531 536,096 418,178 880,234 513,642

Premium Grade 65,300 140,740 - 526,999 283,920

Grade A 413,775 356,800 347,074 353,235 229,722

Grade B 31,456 38,556 71,104 - -

Grade C - - - - -

Sudirman 263,775 50,229 189,138 594,778 214,000

Thamrin - - 22,500 94,000 70,000

Kuningan 81,456 275,356 152,604 191,456 229,642

Gatot Subroto 165,300 210,511 53,936 - -

Future Supply – Office | CBD

Annual Supply – Office | CBD

© Copyright Savills 2016

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F

completed

proposed supply based on developer’s schedule

proposed supply based on probability weighting

J A K A R T A C B D O F F I C E M A R K E T R E V I E W – M A R K E T O U T L O O K

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Within the short term (1-2 years)

demand is expected to remain

limited with the expectation of a

gradual economic recovery.

With demand only projected to

grow in stages, the significant

amount of new supply will increase

vacancy to a higher level, peaking

at around 20% by 2019.

The surge in available space is likely

to drag down office rents,

particularly for Premium and Grade

A buildings.

Based on moderate scenario, it is

anticipated that rents in Premium

and Grade A will shrink by around

40% and 34%, respectively, by 2019.

Over the same period, rents for

Grade B are projected to fall by

28%.

Supply, Take-up, Vacancy Projection – Office | CBD (Probability Weighting)

Rent Forecast – Office | CBD

© Copyright Savills 2016

0%

3%

5%

8%

10%

13%

15%

18%

20%

23%

25%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F

New Supply Net Take-up Vacancy

75

100

125

150

175

200

225

250

275

300

325

2006 2008 2010 2012 2014 2016F 2018F

Premium* Grade A Grade B Grade C

ADDRESS

SAVILLS PCI

PANIN TOWER – SENAYAN CITY , 16TH FLOOR

JALAN ASIA AFRIKA LOT 19

JAKARTA 10270