Co-working Space Increasingly Attracts, What is the Fate of Office?

News, 17/01/2020

Co-working Space Increasingly Attracts, What is the Fate of Office?

Jakarta - Co-working space is predicted to continue to grow rapidly throughout 2020, given the flexibility it offers.

"Because there is a need for co-working space, one of which is the problem of flexibility offered, with that condition, many business people are interested in going there, especially new start-ups," said Colliers Senior Associate Director Ferry Salanto at the World Trade Center Building I, South Jakarta, Wednesday (01/08/2020).

Not only attractive to new business actors, according to Ferry, co-working space is even quite attractive to even mature business actors.

"An established company is also quite interested, especially when they still need one space that can be developed, but they don't want to invest too heavily on it or maybe they need to be short-term, rather than for leasing offices, it can be annual, 3 years "You have to pay, you are bound there, and you have to feed out, and that's also expensive," he explained.

So, what will happen to offices with the development of these needs?

Based on the Jakarta Property Market Report Quarter IV-2019 from Colliers International, the occupancy rate or office occupancy in Jakarta in 2020 is expected to drop to 82.5% from the filling up to the end of 2019 of 83.4%.

"Estimates of occupancy will decline, although the number is not too high, especially in the CBD (central business district) area at around 82.5% from 83.5%. While outside the CBD area the decline will be higher," he said.

This is what according to Ferry makes the construction of this property segment throughout 2019 also not experience a significant increase.

"If we look here indeed, the annual supply both in the CBD and outside, indeed in general, the developer has begun to be careful because during 2019 we have not heard of any new office buildings to be launched (in 2020) so they have begun to reduce, "he added.

Thus, it is natural that office rental prices in Jakarta have started to be lowered since the middle of last year.

"The rent offered has also been reduced, has begun to be realistic, no longer has high prices, and can be negotiated," he concluded.

As Colliers International noted, the average office rental rates offered in 2019 dropped 2.7% (year on year / yoy) to Rp 276,456 per square meter. The downward trend in rental prices is predicted to continue until 2020 to Rp 270,000 per square meter.

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