Jakarta Office Market Outlook Q1 2026

Indonesia’s economy continues to strengthen, with GDP growth reaching 5.61%, the highest since 2021, supported by manufacturing, trade, and agriculture. Domestic consumption remains the main driver, while government spending has accelerated due to the Free Nutritious Meal (MBG) program and Eid‑related holiday allowances. Despite this resilience, the rupiah faces ongoing pressure amid global geopolitical tensions and volatile capital flows. Encouragingly, foreign direct investment has begun to recover in early 2026, slightly surpassing domestic investment and signaling improved investor confidence. The property sector has also shown strong momentum, ranking among the top FDI recipients with robust quarterly and annual growth, supported by urban development and sustained demand across industrial, logistics, and commercial real estate.

The CBD office market is expected to continue its gradual path toward stabilization over the coming quarters, supported by a combination of limited new supply and steady, albeit selective, tenant demand. With a constrained development pipeline—below 200,000 sqm over the next 2-3 years—supply-side pressures are likely to stay manageable. On the demand side, occupancy levels are expected to improve gradually, with overall CBD occupancy projected to reach approximately 78% in the near to medium term. Relocations and portfolio optimization will remain the primary drivers of leasing activity, while expansion demand is expected to recover more gradually in line with broader economic confidence. Rental performance is also expected to trend upward, albeit at a measured pace. Average rents across the CBD are forecast to grow by around 2%–3% per annum, supported by improving occupancy and limited new competition.

The market is expected to see limited new supply in the near term, supporting a more balanced outlook. In 2026, only one additional project—Arumaya in TB Simatupang,—is scheduled for completion. Beyond this, no definitive projects are currently observed through to 2028, highlighting a notably thin development pipeline. On the demand side, leasing activity is projected to maintain a positive trajectory, supported by new business formations and ongoing decentralization trends. Occupancy levels are expected to improve steadily to around 76% by 2028, and rental performance is also anticipated to strengthen in tandem. While South Jakarta will remain the dominant Non-CBD office location, increasing competition is expected from West and North Jakarta, which are gaining traction due to improving infrastructure and access, potentially reshaping tenant preferences over time.