Bisnis.com are reporting that Colliers, one of the country’s leading property consultants, has seized a number of property investment opportunities in Indonesia, despite the negative sentiments globally, both with regard to the economy and geopolitics.
Steve Atherton, Head of Capital Markets and Investment Services for Colliers Indonesia, said that Indonesia is also facing the challenge of rising interest rates, inflation in construction costs, and fears of a recession threat.
However, the condition is still more stable when compared to other countries.
“Indonesia has lower inflation, lower interest rate increases, and less currency devaluation compared to markets such as the United States and Europe,” said Atherton in a statement, quoted Friday (9/12/2022) by Bisnis.Com
Colliers Indonesia sees that many developers and investors are refocusing their development efforts on housing or expanding into new assets, such as logistics, data centers or other horizontal projects.
On the other hand, most large-scale vertical building developments delay new launches until there is evidence of real demand and some reduction in the environment of rising interest rates and construction costs.
“The office market and apartment market have struggled for the last two to three years, and the pandemic created dislocation in the local property market, especially in hotels and retail,” he explained.
Binis.Com report that Atherton saw the same conditions applying to US and European markets with most of them making adjustments to asset prices as a result of reduced demand by applying lower rental rates. “Instead of changing prices, most vertical building owners in Indonesia are trying to hold on to their assets and wait out the stormy weather,” he said.
Apart from that, Atherton sees a glimmer of hope, because Asia Pacific is the region most optimistic about economic growth. As many as 53-percent of real estate investors in Asia Pacific expect a positive impact from this sentiment.
Even though offices in Indonesia have stagnant growth, Colliers sees that there are three top sector preferences for Asia Pacific investors for 2023, namely offices (68-percent), industry and logistics (65-percent), and multifamily/ build-to-rent (42-percent.)