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 gradually moving toward stabilization, underpinned by limited new supply and steady, selective tenant demand. With a constrained pipeline of below 200,000 sqm over the next two to three years, supply pressures are expected to remain manageable. Occupancy is projected to improve progressively to around 78% in the near to medium term, supported primarily by relocations and portfolio optimization, while expansion demand is expected to recover more gradually. Rental performance is also anticipated to strengthen modestly, with average rents forecast to grow by approximately 2%–3% annually, reflecting improving occupancy levels and limited competitive supply.

The non-CBD office market is also expected to maintain a balanced outlook, supported by a notably thin development pipeline and limited incoming supply, with only one confirmed project scheduled for completion in 2026. Beyond this, no significant new developments are anticipated through 2028. Leasing demand is projected to remain positive, driven by new business formation and ongoing decentralization trends. Occupancy is expected to improve steadily to around 76% by 2028, accompanied by gradual rental growth. While South Jakarta will continue to dominate, West and North Jakarta are gaining traction due to improving infrastructure and accessibility, potentially reshaping tenant preferences over time.