Moving Capital & The Prospects of Jakarta

Uncategorized – After no longer being a capital city, the prospect of property investment in Jakarta will remain bright. In fact, Jakarta is projected to remain a favorite destination for investors to invest their capital.

JJL Indonesia Head of Research James Taylor said that in the near future, the impact of the relocation of the capital and the commencement of construction at the new location will not have a major impact on the property business.

According to him, the influence of the effort to move the new capital to East Kalimantan will only be seen and will be felt in the next three to four years.

“We will begin to move in 2024. It means that there will be many empty government buildings in Jakarta. That could open up opportunities to monetize and regenerate these buildings,” James said, Wednesday (1/29).

In terms of monetization, he continued, empty government buildings can be rented out to companies to become offices. In addition, it can also be leased directly or sold and managed by an office management company.

Then, when the age of the building is old, he said there are big opportunities for the developers or the government to rebuild and regenerate those old buildings. Not only the building but the whole area can also be renewed.

“When asked about fears of an excess of office supply in the future, putting pressure on occupancy levels, and rivaling existing buildings, in my opinion, it is too early to think of that now.”

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James stated that in the future, Jakarta will remain a business center and there will be many investors, both local and foreign. New companies that will enter and fill the empty spaces after being left by the government to the new capital.

“Jakarta is like a powerhouse for the Indonesian economy. It remains a center of commercial activity so it will remain a major investment destination,” he said.

JJL Indonesia Head James Allan added that East Kalimantan was not built to rival Jakarta. In terms of funding and the concept of development is quite different from the development of Jakarta.

“The development will take a long time. For example, there is already an office, meaning it needs housing, after that there needs to be built a school, followed by mixed-use facilities, hospitals. So for the next few years, I am optimistic that there is still a big opportunity for Jakarta,” Allan said.

Especially in the commercial center area (CBD), he added, will still be a location that is developing rapidly. Seeing that there is still a lot of lands available, plus a lot of infrastructures that have been and will be built. Investor interest is still very high.

“Especially seeing that demographically, many young people are technology literate. We hope that by 2020, the realization of foreign and local investment will also be able to rise again in Jakarta and other cities.”

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