TEMPO.CO, Jakarta - Property consultant Colliers International Indonesia said that office supply in Surabaya, East Java, continues to grow, provided that it does not exceed demand.
Colliers International Indonesia senior associate director Ferry Salanto said that four newly operated office buildings have added 78,081 square meters more office space in 2016. “Considered as the largest annual supply in the city since 1990,” he said in a property expose in the city of Surabaya held in Jakarta on Thursday, January 5, 2017.
The four buildings are Pakuwon Center and MNC Tower, which started operations in the first half of 2016, and AMG Tower and Skyline Office Tower, which started operations in the second half of the same year. The four office buildings have increased aggregate supply of office space by 29 percent year-on-year. However, the same supply for 2017 is expected to decline y-o-y.
Meanwhile, East and West Surabaya are projected to become the largest contributors to commercial property supply in the future.
On the other hand, abundant supply has caused a decline in occupancy by 12 percent y-o-y. Office space occupancy in Surabaya currently stands at 75 percent.
The global economic slowdown has resulted in a sluggish expansion of financial industry, such as banks and insurance companies. Therefore, rental rates are expected to remain flat in 2017 due to occupancy issue.
In apartment sector, despite stiff competition in apartment construction, Colliers expressed that developers still have a positive expectation. Lower interest rates and youths’ preference to live in downtown Surabaya may play some part in such optimism.
As for retail sector, Colliers foresees continued development in Surabaya considering the on-going development of six new shopping centers.
ANTARA
