Indonesia Property Sector

Property

Property in Indonesia: Overview

An overview of Indonesia’s real estate sector, looking at how the industry has fared during the downturns of both the Asian crisis and the global financial crisis of 2008. This section covers trends in real estate prices, rental yields as well as office and retail space demand.

An Update on Indonesia’s Land Acquisition Law

This section provides an update on the recent changes to the regulations surrounding land acquisition for state infrastructure projects and examines the implications of the legislation for investors.

Opportunities in Real Estate

Demand for housing at both ends of the spectrum continues to grow in line with urbanisation and rising incomes presenting ripe investment and joint venture opportunities. This section covers how foreign investors can access the sector.

Industrial Land and Property

A recent trend in increasing demand for industrial land is testament to Indonesia’s attractiveness as a manufacturing and export base. This section looks at the industrial estates and facilities that the country has to offer to investors looking to tap into Indonesia as a regional production hub.

Law on Foreign Ownership

Changes to the law on foreign ownership of property have been long awaited by investors as Indonesia’s property prices remain some of the lowest in the region. This section features information on what shape the upcoming changes will have and the opportunities to be found within it.

Land Acquisition Law

Accelerating much needed infrastructure projects has been held back by unclear regulations surrounding land acquisition procedures and compensation. This section looks at the upcoming changes currently being debated by law makers and the impact that they are likely to have.

Public Private Partnerships

With an estimated $140 billion USD needed in infrastructure investment over the next 5 years, the government is keen to attract foreign investors for ambitious projects in roads, ports and power plants. This section looks at the main projects and the incentives for investors.

Challenges in the Construction Sector

Indonesia’s construction sector faces limitations in terms of human resources, technology and capacity. This section looks at how the sector is faring and what is being done to develop the private sector of the industry to allow them to compete with state behemoths.

Indonesia Property Snapshot - Real Estate

Contribution to GDP: 3% (2011)
GDP/Mortgage Ratio: < 5% (2011)
Housing backlog: 8 million (estimated)
Average Condiminium Price: 22,251,581 RP/sqm Q2 2012 (Prime Area)
Average Retail Space Rental Price: 614,400 RP/sqm/ month Q2 2012 (Prime Area)
Average Office Space Rental Price: 185,000 RP/sqm/month Q2 2012 (Jakarta)
Average Industrial Land Price : 1,572,000 RP/sqm Q2 2012
Relevant Law: Government Regulation Number 41 Year 1996 on Housing or Residential Ownership for Foreign Citizens Based in Indonesia allows foreigners to own leaseholds of up to 70 years subject to renewals at 25, 20 and 25 year intervals.