Why Keppel Land is so bullish on Jakarta eco-tower

It pointed to market data showing close to full occupancy for similar Grade A buildings and how rent prices have been rising 10% qoq.

"According to Jones Lang LaSalle, the robust demand, low vacancy and limited new supply saw the Jakarta office market enjoy solid growth as at the end of the first quarter in 2012," noted Keppel Land in a release announcing it has broken ground for International Financial Centre Jakarta (IFC) Tower 2.

"Occupancy rates for Grade A office buildings improved to an average of 96.2%, with some even close to full occupancy. Average net rent for Grade A office spaces also strengthened 10% quarter-on-quarter to reach US$17.25 psm per month as at the end of the first quarter in 2012," it added.

"Indonesia recently regained its investment-grade status after an upgrading by two rating agencies - Fitch and Moody's. The upgrade is expected to drive further economic growth and improve investor confidence. The increase in foreign direct investment is also expected to boost demand for quality office space as more companies set up or expand their presence in Jakarta," it said further.

"Indonesia's growth towards being one of Asia's major economic centres will continue to see more companies looking to set up or expand their presence into Jakarta. This is where IFC Tower 2 will meet the increased demand for investment-grade offices that bear the Keppel quality hallmark," said Mr Choo Chiau Beng, CEO of Keppel Corporation and Chairman of Keppel Land.

The Keppel Land chairman also pointed to the The IFC Tower 2's vaunted eco-friendly and energy-efficient features as a major selling point for companies. "We are confident that Tower 2 will attract multinational and local corporations seeking a green business address in the heart of Jakarta's central business district," he said.

According to Keppel Land data, IFC Tower 2 will offer a total net leasable area (NLA) over 50,000 sm of prime Grade A column-free office space. IFC Tower 2 will complement the fully-occupied Tower 1, which offers approximately 28,000 sm of office space.

IFC Tower 2 is located in Jakarta's financial district and is estimated to be finished by 2015.