How has the Jakarta MRT transformed office dynamics in the capital?


The introduction of the Jakarta MRT has fundamentally changed the office dynamics in the capital. With a significant percentage of the city’s workforce now able to move at speed across the city, occupiers and investors alike have to understand how this will impact both the areas served by the MRT lines, and those that are not. In this article we’re going to take a look at the supply-demand dynamics in Jakarta, and how these critical infrastructure projects are making their presence felt.

Closing the Gap on Office Supply

Office conditions in Jakarta are currently in a state of supply, with a CBD occupancy rate of 74.3%. However, over the past 2 years both the coworking and e-commerce sectors have started to eat away at that available stock, quickening the pace at which that supply will be absorbed.

For the past three years we’ve seen a significant volume of new supply hit the market in Jakarta. In 2020 and 2021 there is no big supply in the office sector, which means that occupancy rates are going to tighten as compared with our last report in the last quarter of 2018.

From an investors perspective this is very positive news, with rental rates expected to lift from the low levels where they currently sit. The current tenants’ market is making life difficult for landlords, and so a return to the balanced conditions of 2013/2014 is much anticipated.

The Jakarta MRT Factor

But this improvement in investor fortune is not going to be evenly spread across the city. The introduction of the much anticipated MRT, phase one of which opened on 24th March, 2019, is going to have a profound effect on the demand for office space along the line. This in turn will mean increased demand and rising rental income for landlords of buildings close to stations.

Traffic in Indonesia’s capital is famously poor, with the average Jakartan spending 63 hours a year stuck in a traffic jam. Even the introduction of policies such as the odd-even rule for certain main roads has done little to stem the tide of traffic. The MRT line, which currently stretches from Lebak Bulus in South Jakarta to the Hotel Indonesia traffic circle in Central Jakarta, is expected to carry up to 430,000 passengers per day once fully completed in 2024. For office workers in Jakarta the MRT line has already proven incredibly valuable, with local journeys that used to take 25-30 minutes now completed in as little as 5 minutes.


Occupiers are seeing significant value in moving their offices to available buildings along the line, even into older, grade B stock. Indeed, we’re seeing up to 90% occupancy in some grade B stock, remarkable given the CBD average. With only a very small amount of vacant land available anywhere along the route, we expect to see rents continue to climb as occupiers vie for space.

Taking Advantage of Affordable Supply

It has been interesting to observe occupiers from Kuningan, a previously premium office location, make the move to locations along the MRT route. In their place we are seeing an increasing number of e-commerce and coworking players, mentioned earlier, move in to fill the vacant spaces. With startups much in need of affordable office space, this change in dynamics presents an exciting opportunity for them to enjoy prime stock, albeit without an MRT connection.

An example of this is a recent client who moved in to a notable office tower in Kuningan. With rental rates in the area low, as compared to somewhere like Sudirman, they have been able to take a space that gives them room to grow and at an attractive rate. With rental rates down from 250,000 IDR in 2013 to below 175,000 IDR today for occupiers taking more than 10,000 sqm, it will be interesting to see how areas like Kuningan can be reborn as startup hubs.

Future Projects

As the MRT moves towards completion in 2024, we are keeping a close eye on additional infrastructure projects and how they might impact property dynamics throughout the city. Expansion of the in-construction LRT system, for example, could deliver essential links from areas like Kuningan out to the suburbs and into the CBD area.

For landlords outside of the MRT network it is not enough to just wait out for these government-led infrastructure projects however. With occupancy sitting at such low levels, making an attractive proposition right now for the likes of startups and coworking spaces is a good way to ensure they stay firmly in the black.

Navigating the Office Environment

The MRT project is just one of the key trends influencing real estate trends in the capital. In this supply-driven environment there are significant opportunities, as well as risks, for both occupiers and investors. In order to fully understand the Jakarta landscape it is essential to have a partner who can act as a guide as you plan your next move.

Get in touch and let’s discuss how my team can help you make a success out of your office decision-making here in Jakarta.

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